Design of Optimal Incentives for Smart Charging Considering Utility-Customer Interactions and Distribution Systems Impact

Abstract

With increasing environmental concerns, the penetration of plug-in electric vehicles (PEVs) is expected to increase in the future. Such electrification of the transportation sector will impact the distribution grid adversely; however, PEV smart charging strategies can help mitigate the impacts. In this paper, a PEV smart charging approach is proposed where the charging loads are controlled and incentivized by the local distribution company (LDC) for every unit of energy controlled. A novel framework is proposed to determine the optimal participation of PEVs in the smart charging program and optimal incentives paid by the LDC to PEV customers, such that both parties are economically benefited. The proposed framework models the relationship between customers’ participation and incentives offered by the LDC. The relationship between the expected investment deferral and hence the economic benefits from smart charging participation are considered as well. Monte Carlo simulation is used to simulate the uncertainty of demand, electricity market price, drivers’ behavior, PEV market share, and charging level share. The proposed framework is tested on the 33-bus distribution system and the results show that the proposed approach is effective and can economically benefit both LDC and smart charging PEV participants, while also improving distribution system operation.