A Decentralized Dynamic Pricing Model for Demand Management of Electric Vehicles

Transportation electrification is considered a green alternative to internal combustion vehicles. However, higher penetration of electric vehicles (EVs) can cause several technical challenges to the power systems, including local equipment overloading. This is especially challenging for distribution systems due to the direct connection of EVs with them. To mitigate equipment overloading, by managing EV loads locally, a dynamic pricing model is proposed in this study. First, a satisfaction function is devised for EVs considering the sensitivity of different EV owners to the battery state of charge and urgency of recharge. Then, a welfare function is developed for the EV fleet operator (EFO) considering the net load of EVs and the electricity price of the upstream grid. To this end, a welfare maximization problem is formulated considering the welfare of EVs and EFO. The problem is then decomposed into the EFO sub-problem and EV sub-problem to preserve privacy. Finally, a distributed mechanism is developed to solve the sub-problems iteratively without revealing private information. The performance of the proposed method is analyzed for a residential apartment complex in terms of load management and convergence for different day types (working days and holidays). Simulation results have shown the efficacy of the proposed method in mitigating the overloading of transformers during peak load hours.