Online Dynamic Pricing for Electric Vehicle Charging Stations with Reservations

TL;DR

This paper proposes an online dynamic pricing model for electric vehicle charging stations that integrates reservations, parking, and charging, using a Poisson process and MDP to optimize prices in real-time.

Contribution

It introduces a novel integrated pricing model and analyzes discretization errors in applying Poisson processes within an MDP framework for EV charging stations.

Findings

Developed a Markov Decision Process-based pricing strategy.

Analyzed discretization errors in the pricing model.

Validated the approach with a Monte-Carlo tree search heuristic.

Abstract

This paper introduces a novel model for online dynamic pricing of electric vehicle charging services that integrates reservation, parking, and charging into a comprehensive bundle priced as a whole. Our approach focuses on the individual high-demand, fast-charging location, employing a Poisson process as a model of charging reservation arrivals, and develops an online dynamic pricing strategy optimized through a Markov Decision Process (MDP). A key contribution is the novel analysis of discretization error introduced when incorporating the continuous-time Poisson process into the discrete MDP framework. The MDP model's feasibility is demonstrated with a heuristic dynamic pricing method based on Monte-Carlo tree search, offering a viable path for real-world applications.