A Bi-level optimization strategy for electric vehicle retailers based on robust pricing and hybrid demand response

Abstract

The high penetration of electric vehicles (EVs) poses both opportunities and challenges for power systems. EV retailers, playing a critical role in the demand response mechanism, face market risks caused by uncertainties in electricity consumption and prices. To address the operational issues of large-scale EVs and tap the potential of EV retailers, a temporal and spatial domain-based optimization strategy is proposed, which is implemented on bi-level (referring to transmission and distribution grid networks). First, a physical scheduling model of the grid is established, consisting of a novel hybrid demand response mechanism considering the incentives of EV retailers and the retail electricity price of EV users, and a new robust retail electricity pricing strategy handling the uncertainties of EV behavior and the electric market. Then, a bi-level optimization strategy is presented: at the upper level, in the transmission network, based on the robust pricing strategy, a unit commitment model that coordinates the hybrid demand response with other distributed energy resources is designed to optimize load periods of EVs in the time domain; at the lower level, in the distribution network, an optimal power flow model is proposed to spatially dispatch the location of EV loads. The impacts of retail price profile, EV penetration, hybrid demand response mechanism, and EV load location are analyzed in ten tests using the IEEE 33 distribution network. Simulation results indicate that the robust pricing strategy can effectively handle uncertainties, the integration of the hybrid demand response mechanism into scheduling can ensure the benefits of all participants, and the bi-level optimization strategy can accommodate distributed energy resources temporally and spatially.