Commercial electric vehicle fleets in U.S. ancillary services markets: A stochastic analysis to inform utility rate design
Abstract
For commercial fleets in the United States, traditional electricity tariffs can disincentivize vehicle-to-grid (V2G) participation and render electrification less attractive. First, we show that absent a rate redesign, opportunities for both fleets and the grid are missed. We propose a rate design modification: demand charge relaxation during off-peak (overnight) hours. This approach would enable fleets to shift additional load share to overnight hours and increase ancillary service revenues without the expectation of impacting local grid cost drivers (i.e., coincident peak load). Applied to a California case study, operational savings spanning 7.5% and 20.6% are realized via increased capacity revenues and deferred demand charges.
Declaration of competing interest The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper. Acknowledgments The authors would like to thank Vladimir Dvorkin, Paul Joskow, Dharik Mallapragada, Nicolas Morell Dameto, Morgan Santoni-Colvin, and Richard Schmalensee for their support and input over the course of this work. The authors also acknowledge the MIT SuperCloud and Lincoln Laboratory Supercomputing Center for providing computing resources that have contributed to the research results reported within this paper. MIT Energy Initiative Future Energy Systems Center supported this research.