A three-level framework for strategic participation of aggregated electric vehicle-owning households in local electricity and thermal energy markets

Abstract

The impact of electric vehicles (EV) charging strategy will not be limited to power systems as integrated electricity, natural gas and thermal energy systems have become increasingly interconnected. We introduce a three-level framework for the aggregated electric vehicle-owning households (AEVH) to strategically participate in local electricity and thermal energy markets as a price-maker, while considering the strategic behavior of the integrated energy service provider (IESP) in the wholesale electricity market (WEM) also as a price-maker. The AEVH operator forms the first level, while IESP and WEM operators are integrated at the second and third levels, respectively. To solve the three-level problem, the second and third levels are modified as a single-level problem through the Karush–Kuhn–Tucker (KKT) conditions, then the equilibrium point of the resulting single-level problem and the first level is achieved through two-step iterative method. At the first level, the arrival/departure time and daily traveled miles of EV fleets are modeled via stochastic scenarios, while renewable energy production at the second level is dealt with by information gap decision theory (IGDT). Ultimately, different case studies verify that AEVHs can deploy their thermal flexibility together with the smart charging strategy of the EVs to influence the local electricity, thermal energy and even WEM prices. Using the proposed three-level optimization framework reaches the best point of equilibrium between different market players. The outcomes prove the effectiveness of the proposed model. Based on the results, the AEVH can deploy the proposed model to diminish the WEM price by 2.1%, while the local electricity price was dropped by 18.85%. Furthermore, the thermal energy price was reduced by 5.82%, which illustrates that EVs can influence the thermal energy market through the combined heat and power units.