Control of Charging of Electric Vehicles through Menu-Based Pricing

TL;DR

This paper introduces an online menu-based pricing mechanism for EV charging stations that optimizes social welfare and profit, considering user preferences, renewable energy use, and demand management.

Contribution

It presents a novel pricing strategy that maximizes social welfare and profit, including a fixed profit approach that guarantees revenue and improves demand management.

Findings

The proposed mechanism reduces peak demand effectively.

It utilizes limited charging spots efficiently.

The fixed profit strategy guarantees a minimum profit.

Abstract

We propose an online pricing mechanism for electric vehicle (EV) charging. A charging station decides prices for each arriving EV depending on the energy and the time within which the EV will be served (i.e. deadline). The user selects either one of the contracts by paying the prescribed price or rejects all depending on their surpluses. The charging station can serve users using renewable energy and conventional energy. Users may select longer deadlines as they may have to pay less because of the less amount of conventional energy, however, they have to wait a longer period. We consider a {\em myopic} charging station and show that there exists a pricing mechanism which jointly maximizes the social welfare and the profit of the charging station when the charging station knows the utilities of the users. However, when the charging station does not know the utilities of the users, the social welfare pricing strategy may not maximize the expected profit of the charging station and even the profit may be $0$. We propose a fixed profit pricing strategy which provides a guaranteed fixed profit to the charging station and can maximize the profit in practice. We empirically show that our proposed mechanism reduces the peak-demand and utilizes the limited charging spots in a charging station efficiently.