Generating EUPHEMIA-compatible bids for flexible demand under imperfect information

Abstract

Electricity procurement constitutes a significant share of operational costs for large electricity consumers, and thus exposure to extreme prices poses a substantial financial risk. This paper proposes a method to generate EUPHEMIAcompatible bids for flexible demand to enable their participation in the European day-ahead electricity market while minimizing risks. Two strategies are considered, resulting in two bid formats: hourly bids (HBs), representing flexibility via marginal price responsiveness through price-quantity pairs, and exclusivegroup bids (EBs), representing flexibility via mutually exclusive operational schedules submitted at opportunity cost. Our method is evaluated on a hypothetical electrolyzer system and a realworld steel plant under different market conditions. Results show that the economic performance of each strategy depends on the operational characteristics of the load and market conditions. Under volatile market conditions, highly flexible systems achieve better economic outcomes with EBs, while less flexible systems with stronger intertemporal constraints perform better with HBs.