Integrated pricing framework for optimal power and semi‐dynamic traffic flow problem

Abstract

Large-scale fast charging of electric vehicles inextricably entwines the operation of power and transportation systems. This study examines the integrated pricing of electricity and roads to maximise the social welfare associated with the coupled systems, i.e. minimising the total travel time and energy generation costs. While electric demand and transportation network conditions vary significantly over the day, most of the work, however, considers only static network flows for a single time period. This study proposes a multi-period integrated pricing model that can describe the variations of electricity and travel demands. Specifically, the distribution of traffic flows is characterised by a semi-dynamic traffic assignment model to consider flow propagation between adjacent time periods. To determine the optimal prices of electricity and road tolls, a marginal-cost pricing scheme based on the first-best tolls and locational marginal prices is developed. Mathematically, the multi-period pricing model is formulated as a convex optimisation problem. Moreover, a decentralised collaborative pricing framework is developed for independent power and transportation system operators to attain the optimal pricing strategies. Numerical experiments are conducted to demonstrate the effectiveness of the pricing method.