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Coordination and payment mechanisms for electric vehicle aggregators

Coordination and payment mechanisms for electric vehicle aggregators
Coordination and payment mechanisms for electric vehicle aggregators
Motivated by the high electric vehicle (EV) penetration percentages foreseen for the near future, this paper studies the participation of large fleets of EVs in electricity day-ahead markets. Specifically, we consider a scenario where a number of independent and self-interested EV aggregators participate in the day-ahead market to purchase energy to satisfy their clients’ driving needs. In this scenario, independent bidding can drive prices up unnecessarily, resulting in increased electricity costs for all participants. Inter-aggregator cooperation can mitigate this by producing coordinated bids. However, this is challenging due to the self-interested nature of the aggregators, who may try to manipulate the system in order to obtain personal benefit. In order to overcome this issue, we employ techniques from mechanism design to develop a coordination mechanism which incentivises self-interested EV aggregators to report their energy requirements truthfully to a third-party coordinator. This coordinator is then able to employ a day-ahead bidding algorithm to optimise the global bids on their behalf, extending the benefits of smart bidding to groups of competing EV aggregators. Importantly, the proposed coordination mechanism is straightforward to implement and does not require any additional infrastructure. To ensure scalability and computational tractability, a novel price-maker day-ahead bidding algorithm is proposed, which is formulated in terms of simple energy requirement constraints. The coordination mechanism substantially reduces bidding costs, as shown in a case study which uses real market and driver data from the Iberian Peninsula.
Electric vehicle charging, Electric vehicle aggregation, Inter-aggregator coordination, Mechanism Design, Vickrey-Clarke-Groves, Day-ahead, Electricity markets
0306-2619
185-195
Perez-Diaz, Alvaro
dc83bca5-5108-4448-878f-23e73dec4c88
Gerding, Enrico
d9e92ee5-1a8c-4467-a689-8363e7743362
McGroarty, Frank
693a5396-8e01-4d68-8973-d74184c03072
Perez-Diaz, Alvaro
dc83bca5-5108-4448-878f-23e73dec4c88
Gerding, Enrico
d9e92ee5-1a8c-4467-a689-8363e7743362
McGroarty, Frank
693a5396-8e01-4d68-8973-d74184c03072

Perez-Diaz, Alvaro, Gerding, Enrico and McGroarty, Frank (2018) Coordination and payment mechanisms for electric vehicle aggregators. Applied Energy, 212, 185-195. (doi:10.1016/j.apenergy.2017.12.036).

Record type: Article

Abstract

Motivated by the high electric vehicle (EV) penetration percentages foreseen for the near future, this paper studies the participation of large fleets of EVs in electricity day-ahead markets. Specifically, we consider a scenario where a number of independent and self-interested EV aggregators participate in the day-ahead market to purchase energy to satisfy their clients’ driving needs. In this scenario, independent bidding can drive prices up unnecessarily, resulting in increased electricity costs for all participants. Inter-aggregator cooperation can mitigate this by producing coordinated bids. However, this is challenging due to the self-interested nature of the aggregators, who may try to manipulate the system in order to obtain personal benefit. In order to overcome this issue, we employ techniques from mechanism design to develop a coordination mechanism which incentivises self-interested EV aggregators to report their energy requirements truthfully to a third-party coordinator. This coordinator is then able to employ a day-ahead bidding algorithm to optimise the global bids on their behalf, extending the benefits of smart bidding to groups of competing EV aggregators. Importantly, the proposed coordination mechanism is straightforward to implement and does not require any additional infrastructure. To ensure scalability and computational tractability, a novel price-maker day-ahead bidding algorithm is proposed, which is formulated in terms of simple energy requirement constraints. The coordination mechanism substantially reduces bidding costs, as shown in a case study which uses real market and driver data from the Iberian Peninsula.

Text Coordination and payment mechanisms for electric vehicle aggregators - Accepted Manuscript
Restricted to Repository staff only until 5 December 2018.
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More information

Accepted/In Press date: 5 December 2017
e-pub ahead of print date: 22 December 2017
Published date: 15 February 2018
Keywords: Electric vehicle charging, Electric vehicle aggregation, Inter-aggregator coordination, Mechanism Design, Vickrey-Clarke-Groves, Day-ahead, Electricity markets

Identifiers

Local EPrints ID: 416940
URI: https://eprints.soton.ac.uk/id/eprint/416940
ISSN: 0306-2619
PURE UUID: a8f5ef95-da4a-4ffd-9ba0-dbac4db8233f
ORCID for Alvaro Perez-Diaz: ORCID iD orcid.org/0000-0001-8081-0772
ORCID for Frank McGroarty: ORCID iD orcid.org/0000-0003-2962-0927

Catalogue record

Date deposited: 15 Jan 2018 17:30
Last modified: 15 Feb 2018 17:31

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