Modeling Supply and Demand Curves in Day-Ahead Electricity Market

Wenzhen Huang, University of Duisburg-Essen

Co-authors: Florian Ziel , University of Duisburg-Essen

Abstract: Day-ahead electricity markets rely on supply and demand curves,which fundamentally determine the market-clearing price. Recent advances in structural curve modeling and time-series methods have improved price forecasting, yet few models explicitly incorporate explanatory variables to interpret bidding behaviors. In this work, we propose a linear basis function modeling framework that captures the impact of renewable energy sources—particularly in the negative price domain. By examining how wind and solar feed-ins affect the shape of these curves, our approach aims to enhance both the accuracy and interpretability in curve modelling.