Retail and Wholesale Electricity Pricing Considering Electric Vehicle Mobility

Abstract

We consider the operation of multiple charging network operators (CNOs), each serving a population of electric vehicle (EV) drivers who subscribe to them for charging services. The CNOs set retail prices for the charging stations they operate, which effectively control the electricity demand and queues formed at their charging stations. The stations’ electricity demand also ties the CNOs’ retail optimization problem to their position in the wholesale market of electricity, creating a coupling between the electric transportation systems and the bulk power grid, which is managed by an independent system operator (ISO). In this paper, we provide retail pricing mechanisms and iterative wholesale market-clearing algorithms that together maximize social welfare in this coupled system. Specifically, our algorithm would enable the CNO to reduce its electricity costs and the customers’ travel delays (including charging station queueing times) and the ISO to reduce societal electricity costs by tapping into the EVs’ flexibility as mobile electric loads. Our theoretical analysis relies on the application of congestion pricing techniques to a capacitated user equilibrium problem on an energy-and-time expanded transportation network model. This expanded network allows us to track the travel costs of individual EVs, including their limited battery charge, the cost of waiting in queues at public charging stations, as well as the temporally variant nature of travel times.