Abstract Net-zero energy transition is projected to accelerate the replacement of fossil fuels with renewables, leaving system flexibility resources increasingly scarce. Here, we present a sub-annual energy-environment-economy model with endogenous hourly energy demand profiles and power balance dynamics including power dispatch, storage operations and demand-side response that co-optimizes supply- and demand-side flexibility, to map feasible transition pathways for China. The results show that compared with coarser timeslice representative of common modelling practice, sub-annual representation tightening flexibility needs with a high variable renewable energy and high electrification energy system. Results reveal steeper load ramps and frequent evening price strikes, identify increased activities in thermal power, nuclear power, hydrogen production, and energy storage. Accounting for temporal variability in supply and demand, the cost-optimal solution exhibits marginal abatement costs that are over 9% higher, but incorporating demand-side flexibility measures can mitigate cost growth and delineates least-regret portfolios for reliable, affordable decarbonization. Incentives for demand-side response such as load time-shifting and vehicle-to-grid can reduce investment in pumped hydro by 23% and yield more than a threefold cost-benefit ratio. The study highlights enhanced modelling of temporal dynamics within future energy model development and incentive-compatible market mechanism design for dispatchable resource development.
Zhang et al. (2026) studied this question.