Commercial electric vehicle fleets in U.S. ancillary services markets: A stochastic analysis to inform utility rate design

Abstract

For commercial fleets in the United States, traditional electricity tariffs can disincentivize vehicle-to-grid (V2G) participation and render electrification less attractive. First, we show that absent a rate redesign, opportunities for both fleets and the grid are missed. We propose a rate design modification: demand charge relaxation during off-peak (overnight) hours. This approach would enable fleets to shift additional load share to overnight hours and increase ancillary service revenues without the expectation of impacting local grid cost drivers (i.e., coincident peak load). Applied to a California case study, operational savings spanning 7.5% and 20.6% are realized via increased capacity revenues and deferred demand charges.