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arxiv: 2606.24183 · v1 · pith:56UHVC52new · submitted 2026-06-23 · 💰 econ.TH

Generating EUPHEMIA-compatible bids for flexible demand under imperfect information

Christian Doh Dinga , Mukunda Badarinath , Seyed Hossein Jamali , Laurens de Vries , Milos Cvetkovic This is my paper

Pith reviewed 2026-06-25 22:14 UTC · model grok-4.3

classification 💰 econ.TH
keywords flexible demandelectricity marketsbidding strategiesEUPHEMIAday-ahead marketimperfect informationelectrolyzersteel plant
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The pith

A method for creating two EUPHEMIA-compatible bid formats shows that flexible demand performs differently depending on its operational constraints and market price volatility.

A machine-rendered reading of the paper's core claim, the machinery that carries it, and where it could break.

The paper develops a way to produce bids that let large flexible electricity users participate in the European day-ahead market while managing exposure to uncertain prices. It defines hourly bids as price-quantity pairs that reflect marginal responsiveness and exclusive-group bids as sets of mutually exclusive schedules priced at opportunity cost. When tested on a modeled electrolyzer and an actual steel plant, the results indicate that highly flexible loads save more with exclusive-group bids under volatile prices, whereas loads with tight timing limits save more with hourly bids. This distinction matters because electricity procurement is a major cost for industrial consumers and poor bidding can amplify losses from price spikes.

Core claim

The method generates EUPHEMIA-compatible hourly bids and exclusive-group bids for flexible demand. Economic outcomes vary with operational characteristics: in volatile conditions, highly flexible systems benefit more from exclusive-group bids, while less flexible systems with stronger intertemporal constraints benefit from hourly bids.

What carries the argument

The two bid formats: hourly bids via price-quantity pairs for marginal price responsiveness and exclusive-group bids via mutually exclusive operational schedules submitted at opportunity cost.

If this is right

  • Under volatile market conditions, highly flexible systems achieve better economic outcomes with exclusive-group bids.
  • Less flexible systems with stronger intertemporal constraints perform better with hourly bids.
  • The relative advantage of each format depends on the specific operational characteristics of the load.
  • Both formats allow flexible demand to participate in the day-ahead market while addressing risk from imperfect price information.

Where Pith is reading between the lines

These are editorial extensions of the paper, not claims the author makes directly.

  • The pattern could be checked on other loads such as data centers or cold storage to test whether flexibility level remains the dominant factor.
  • Market rules that make exclusive-group bids easier to submit might increase participation by highly adaptable industrial users.
  • If risk is quantified through explicit probability distributions rather than the current approach, the performance gap between the formats might narrow or reverse.
  • Wider use of the better-matching format could reduce the need for real-time balancing actions caused by inflexible day-ahead positions.

Load-bearing premise

The two bid formats are assumed to adequately represent flexibility under imperfect information, and the electrolyzer and steel plant cases allow general conclusions about economic performance.

What would settle it

Running the steel plant's actual historical load data through both bid formats over a multi-week period of recorded high price volatility and comparing the resulting procurement costs would show whether one format consistently outperforms the other.

Figures

Figures reproduced from arXiv: 2606.24183 by Christian Doh Dinga, Laurens de Vries, Milos Cvetkovic, Mukunda Badarinath, Seyed Hossein Jamali.

Figure 1
Figure 1. Figure 1: Overview of the methodological framework. [PITH_FULL_IMAGE:figures/full_fig_p003_1.png] view at source ↗
Figure 2
Figure 2. Figure 2: Hourly bids for the two case studies under different market conditions [PITH_FULL_IMAGE:figures/full_fig_p006_2.png] view at source ↗
Figure 3
Figure 3. Figure 3: Exclusive-group bid for the two case studies under different market conditions (MCP: Market-Clearing Price) [PITH_FULL_IMAGE:figures/full_fig_p006_3.png] view at source ↗
Figure 4
Figure 4. Figure 4: Average electricity costs for different bidding strategies under different market conditions [PITH_FULL_IMAGE:figures/full_fig_p007_4.png] view at source ↗
read the original 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 EUPHEMIA-compatible 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 exclusive-group bids (EBs), representing flexibility via mutually exclusive operational schedules submitted at opportunity cost. Our method is evaluated on a hypothetical electrolyzer system and a real-world 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.

Editorial analysis

A structured set of objections, weighed in public.

Desk editor's note, referee report, simulated authors' rebuttal, and a circularity audit. Tearing a paper down is the easy half of reading it; the pith above is the substance, this is the friction.

Referee Report

2 major / 1 minor

Summary. The paper proposes a method to generate EUPHEMIA-compatible bids for flexible electricity demand under imperfect information, comparing two formats: hourly bids (HBs) that use price-quantity pairs to represent marginal price responsiveness, and exclusive-group bids (EBs) that submit mutually exclusive operational schedules at opportunity cost. The method is evaluated on a hypothetical electrolyzer and a real steel plant across different market conditions, with the central claim that economic performance depends on load flexibility and volatility—EBs outperform for highly flexible systems under volatile prices, while HBs perform better for loads with stronger intertemporal constraints.

Significance. If the underlying stochastic optimization, imperfect-information model, and risk functional are correctly specified and the numerical results hold under standard validation, the work would offer a practical contribution to demand-response participation in European day-ahead markets by showing how bid format choice interacts with operational constraints and price uncertainty.

major comments (2)
  1. [Abstract, §3] Abstract and §3 (method description): No equations, scenario-generation procedure, or risk measure (e.g., expected cost, CVaR) are supplied for mapping the imperfect-information distribution into bid parameters; without this, the reported ranking of EBs versus HBs cannot be reproduced or assessed for robustness.
  2. [§4] §4 (case studies): The electrolyzer and steel-plant evaluations report comparative economic outcomes but supply neither the data sources for price scenarios, the precise intertemporal constraints, nor any statistical validation (confidence intervals, sensitivity checks); this leaves the claim that “performance depends on operational characteristics” unsupported by verifiable evidence.
minor comments (1)
  1. [§2] Notation for opportunity cost in EBs and the definition of “volatility” in market conditions should be introduced explicitly before the numerical results.

Simulated Author's Rebuttal

2 responses · 0 unresolved

We thank the referee for the constructive comments, which identify key gaps in reproducibility. We agree that additional methodological and empirical details are required and will revise the manuscript accordingly to address both major comments.

read point-by-point responses

  1. Referee: [Abstract, §3] Abstract and §3 (method description): No equations, scenario-generation procedure, or risk measure (e.g., expected cost, CVaR) are supplied for mapping the imperfect-information distribution into bid parameters; without this, the reported ranking of EBs versus HBs cannot be reproduced or assessed for robustness.

    Authors: We agree that the current description of the method in §3 lacks the explicit equations, scenario-generation procedure, and risk measure needed for full reproducibility. In the revised manuscript we will insert the stochastic optimization formulation, the procedure used to generate price scenarios from the imperfect-information distribution, and the specific risk functional (expected cost or CVaR) that maps scenarios into the bid parameters for both hourly bids and exclusive-group bids. These additions will allow independent verification of the ranking between the two formats. revision: yes

  2. Referee: [§4] §4 (case studies): The electrolyzer and steel-plant evaluations report comparative economic outcomes but supply neither the data sources for price scenarios, the precise intertemporal constraints, nor any statistical validation (confidence intervals, sensitivity checks); this leaves the claim that “performance depends on operational characteristics” unsupported by verifiable evidence.

    Authors: We acknowledge that §4 currently omits the data sources for the price scenarios, the exact intertemporal constraints applied to each load, and statistical validation. In the revision we will add the sources of the price data, list the precise operational constraints for the electrolyzer and steel plant, and include sensitivity checks or confidence intervals supporting the dependence of performance on flexibility and volatility. Some real-plant data may be summarized for confidentiality reasons, but the key parameters and validation steps will be provided. revision: partial

Circularity Check

0 steps flagged

No circularity; derivation is self-contained via explicit bid construction and case evaluation

full rationale

The paper proposes two explicit bid formats (hourly bids via price-quantity pairs and exclusive-group bids via mutually exclusive schedules) and evaluates their economic outcomes on defined load cases under stated market conditions. No step reduces a claimed prediction to a fitted input by construction, no self-citation chain bears the central result, and no ansatz or uniqueness theorem is imported to force the outcome. The reported performance rankings follow directly from applying the defined strategies to the electrolyzer and steel-plant instances, making the chain independent of its own outputs.

Axiom & Free-Parameter Ledger

0 free parameters · 2 axioms · 0 invented entities

Abstract provides no explicit free parameters, invented entities, or detailed axioms beyond standard domain assumptions about market bid acceptance and load modeling.

axioms (2)
  • domain assumption EUPHEMIA accepts hourly bids via price-quantity pairs and exclusive-group bids with opportunity costs.
    Invoked to ensure compatibility of proposed bid formats.
  • domain assumption Operational characteristics of the electrolyzer and steel plant represent relevant classes of flexible demand.
    Used as basis for the evaluation cases described.

pith-pipeline@v0.9.1-grok · 5701 in / 1337 out tokens · 34620 ms · 2026-06-25T22:14:52.189029+00:00 · methodology

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