Co-Optimizing Bidding and Power Allocation of an EV Aggregator Providing Real-Time Frequency Regulation Service

Abstract

The rapidly expanding scale of electric vehicle (EV) fleets and continuously decreasing battery costs are making vehicle-to-grid services a reality. In this paper, we study the interaction between the problems of an EV aggregator’s bidding in the regulation market and power allocation (i.e., determining the (dis)charging powers of the EVs in regulation deployment). Although the two problems are coupled, they are often regarded as decoupled and optimized separately for complexity issues. However, failing to consider the coupling of bidding and power allocation can lead to a decline in the profit of the EV aggregator (EVA). In this paper, we propose a framework for co-optimizing EVA bidding and power allocation in the regulation market. The bidding model is formulated as a stochastic programming problem with embedded power allocation in discretized regulation signal scenarios. To meet the solution time requirement for regulation deployment, we further propose a power allocation model that can be solved online. It utilizes the Lagrange multipliers from the bidding problem to ensure that the allocation results correspond to the optimal solution of the bidding problem. The effect of the proposed framework on improving EVA profits and reducing degradation costs is verified in the case study.