Strategic Competition of Electric Vehicle Charging Stations in a Regulated Retail Electricity Market

TL;DR

This paper investigates the strategic bidding behavior of electric vehicle charging stations in a regulated retail electricity market, analyzing profitability and benefits for EV owners through a bi-level optimization model.

Contribution

It introduces a bi-level optimization framework for EVCSs' strategic bidding in regulated markets, highlighting potential profitability and cost savings for EV owners.

Findings

EVCSs can profitably operate within regulated markets using strategic bidding.

Presence of EVCSs offers EV owners cost savings compared to home charging.

Strategic bidding improves EVCS profitability while benefiting EV owners.

Abstract

The increasing trend of transportation electrification presents investors the opportunity to provide charging services to Electric Vehicle (EV) owners via the energy purchased from the wholesale electricity market. This will benefit EV owners with the availability of competitive rates compared to the regulated utility time-of-use (TOU) rates. The fundamental questions addressed in this paper are 1) will EV owners benefit from the additional choice of Electric Vehicle Charging Stations (EVCSs) compared to home charging? 2) is there any profitable market opportunity for charging stations while the retail electricity market is regulated? To this end, the strategic bidding problem for EVCSs which purchase electricity from the Day-Ahead Electricity Market (DAM) and sell it to EV owners is presented. The strategic bidding problem is constrained by the market-clearing problem within the DAM as well as EVs' charging cost minimization problem. A bi-level optimization problem formulation and a solution method are presented to address this work's research questions. The effectiveness of the proposed structure in gaining profit for EVCSs is illustrated, and it is shown that EV owners also save on their charging cost with the presence of EVCSs as a choice.