A Spot Market Balancing Strategy for Vehicle-to-Grid Reserve Power Provision

Abstract

In a vehicle-to-grid (V2G) business model, an aggregator combines individual electric vehicles (EVs) into a large storage device. Researchers agree that the provision of control reserve is the most lucrative option to monetize V2G. However, recent studies show that reflecting current reserve market regulation and incorporating all cost elements can lead to low or even negative profits. This study develops a spot market trading strategy that makes V2G reserve power provision economically feasible. The strategy uses offsetting transactions on the spot market that compensate for imbalances in the pool's energy level caused by reserve market call-offs. I apply the strategy to the German primary and secondary reserve market. My findings indicate that, compared with a reserve market-only strategy, spot market balancing reduces the required pool size by a factor of twelve and increases annual per vehicle profit by up to €450, resulting in a profit range between €65 and €300. Furthermore, I show that annual per vehicle profits can be increased up to €1,000 in the near future. Aggregators can use these results to further develop business models and corresponding go-to-market strategies.