Menu-Based Pricing for Charging of Electric Vehicles with Vehicle-to-Grid Service

TL;DR

This paper introduces a menu-based pricing scheme for EV charging stations that incorporates vehicle-to-grid services, balancing profit, user utility, and battery degradation considerations.

Contribution

It proposes a novel pricing strategy that guarantees profit and maximizes expected profit under uncertain user utilities, considering renewable energy and V2G impacts.

Findings

V2G service increases user incentives when renewable energy is limited.

The proposed pricing scheme guarantees fixed profit and maximizes expected profit.

Efficient V2G utilization boosts both station profit and user surplus.

Abstract

The paper considers a bidirectional power flow model of the electric vehicles (EVs) in a charging station. The EVs can inject energies by discharging via a Vehicle-to-Grid (V2G) service which can enhance the profits of the charging station. However, frequent charging and discharging degrade battery life. A proper compensation needs to be paid to the users to participate in the V2G service. We propose a menu-based pricing scheme, where the charging station selects a price for each arriving user for the amount of battery utilization, the total energy, and the time (deadline) that the EV will stay. The user can accept one of the contracts or rejects all depending on their utilities. The charging station can serve users using a combination of the renewable energy and the conventional energy bought from the grid. We show that though there exists a profit maximizing price which maximizes the social welfare, it provides no surplus to the users if the charging station is aware of the utilities of the users. If the charging station is not aware of the exact utilities, the social welfare maximizing price may not maximize the expected profit. In fact, it can give a zero profit. We propose a pricing strategy which provides a guaranteed fixed profit to the charging station and it also maximizes the expected profit for a wide range of utility functions. Our analysis shows that when the harvested renewable energy is small the users have higher incentives for the V2G service. We, numerically, show that the charging station's profit and the user's surplus both increase as V2G service is efficiently utilized by the pricing mechanism.