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A comprehensive game-theoretic model for electric vehicle charging station competition

A comprehensive game-theoretic model for electric vehicle charging station competition
A comprehensive game-theoretic model for electric vehicle charging station competition

En-route charging stations are essential to ensure the adoption of electric vehicles. However, careful planning is necessary due to high cost in infrastructure and potentially long waiting queues. Existing literature on the placement of charging stations largely disregards competition, sets prices to cover costs and/or disregards queues. In contrast, this work models competing station investors who aim to maximise expected profit, while electric vehicle drivers aim to minimise expected travel costs including queues. Following a game-theoretic approach, investors strategically decide station capacities, locations and charging unit power outputs as well as fees, taking into consideration building and operational costs. Given the complexity of the problem, the solution involves a combination of theoretical and algorithmic techniques to obtain subgame-perfect equilibria of investor and driver choices. Subgame-perfect equilibria are found to be at least 92.85% efficient, for reasonable fluctuations of problem parameters. Furthermore, it is found that charging prices can be up to approximately 5 times higher than marginal cost due to long charging times, and also that better charging technology may not necessarily benefit drivers in the near future. Finally, subsidies towards the purchase of charging units are shown to be beneficial for both drivers and investors, being able to generate up to 14.3% additional value than the cost of the subsidy. In contrast, subsidies on the energy price for stations are found to have small effect and can be abused by investors.

charging stations, competition, electric vehicle, game theory, subsidies
1524-9050
Zavvos, Efstathios
6d8f7292-47db-464b-8787-7ee854e66682
Gerding, Enrico H.
d9e92ee5-1a8c-4467-a689-8363e7743362
Brede, Markus
bbd03865-8e0b-4372-b9d7-cd549631f3f7
Zavvos, Efstathios
6d8f7292-47db-464b-8787-7ee854e66682
Gerding, Enrico H.
d9e92ee5-1a8c-4467-a689-8363e7743362
Brede, Markus
bbd03865-8e0b-4372-b9d7-cd549631f3f7

Zavvos, Efstathios, Gerding, Enrico H. and Brede, Markus (2021) A comprehensive game-theoretic model for electric vehicle charging station competition. IEEE Transactions on Intelligent Transportation Systems. (doi:10.1109/TITS.2021.3111765).

Record type: Article

Abstract

En-route charging stations are essential to ensure the adoption of electric vehicles. However, careful planning is necessary due to high cost in infrastructure and potentially long waiting queues. Existing literature on the placement of charging stations largely disregards competition, sets prices to cover costs and/or disregards queues. In contrast, this work models competing station investors who aim to maximise expected profit, while electric vehicle drivers aim to minimise expected travel costs including queues. Following a game-theoretic approach, investors strategically decide station capacities, locations and charging unit power outputs as well as fees, taking into consideration building and operational costs. Given the complexity of the problem, the solution involves a combination of theoretical and algorithmic techniques to obtain subgame-perfect equilibria of investor and driver choices. Subgame-perfect equilibria are found to be at least 92.85% efficient, for reasonable fluctuations of problem parameters. Furthermore, it is found that charging prices can be up to approximately 5 times higher than marginal cost due to long charging times, and also that better charging technology may not necessarily benefit drivers in the near future. Finally, subsidies towards the purchase of charging units are shown to be beneficial for both drivers and investors, being able to generate up to 14.3% additional value than the cost of the subsidy. In contrast, subsidies on the energy price for stations are found to have small effect and can be abused by investors.

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Accepted/In Press date: 13 August 2021
e-pub ahead of print date: 20 September 2021
Additional Information: Publisher Copyright: IEEE Copyright: Copyright 2021 Elsevier B.V., All rights reserved.
Keywords: charging stations, competition, electric vehicle, game theory, subsidies

Identifiers

Local EPrints ID: 453333
URI: http://eprints.soton.ac.uk/id/eprint/453333
ISSN: 1524-9050
PURE UUID: 784f7dfd-e806-4d8d-8259-9c09af23e047
ORCID for Enrico H. Gerding: ORCID iD orcid.org/0000-0001-7200-552X

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Date deposited: 13 Jan 2022 17:33
Last modified: 28 Apr 2022 01:55

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Contributors

Author: Efstathios Zavvos
Author: Enrico H. Gerding ORCID iD
Author: Markus Brede

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