Optimizing Electric Vehicle Fleet Integration in Industrial Demand Response: Maximizing Vehicle-to-Grid Benefits While Compensating Vehicle Owners for Battery Degradation

Authors

Andre Leippi, Department of Process, Energy and Transport Engineering, Munster Technological University, Bishopstown, Cork, Ireland; Institute of Human Factors and Technology Management IAT, University of Stuttgart, Stuttgart, GermanyFollow
Markus Fleschutz, Department of Process, Energy and Transport Engineering, Munster Technological University, Bishopstown, Cork, Ireland; Entelios AG, Munich, Germany
Kevin Davis, Department of Process, Energy and Transport Engineering, Munster Technological University, Bishopstown, Cork, IrelandFollow
Anna-Lena Klingler, Fraunhofer IAO - Institute for Industrial Engineering, Stuttgart, Germany
Michael D. Murphy, Department of Process, Energy and Transport Engineering, Munster Technological University, Bishopstown, Cork, IrelandFollow

ORCID

https://orcid.org/0000-0003-1133-9686

Document Type

Article

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.

Disciplines

Energy Systems | Engineering | Mechanical Engineering

Publication Details

Applied Energy, vol 374. © 2024 The Authors.

Abstract

This paper addresses the integration of electric vehicle (EV) fleets into industrial smart grids to increase operational flexibility. It focuses on an extended multi-objective optimization problem that minimizes two primary objectives: (i) the electricity expenditure of a company using its employees’ EV batteries as temporary distributed energy storage, and (ii) the costs associated with the degradation of EV batteries, given the additional usage from the company’s perspective. In this paper, the utilization of an EV fleet is simulated at the individual car level over a one-year period. These optimization problems were balanced by using real-time electricity prices and the effective demand response (DR) of the company’s electrical load. The company utilized the EVs as battery storage to offset fluctuating electricity prices, while compensating EV owners with free electricity for the costs incurred through degradation of their batteries. The extent to which the company could compensate EV owners while maintaining the viability of vehicle-to-grid (V2G) services in a non-residential scenario was explored. The results established an equilibrium point at which the financial benefits for the company resulting from V2G services was maximized against the negative financial impact of increased battery degradation for EV owners. The results showed that there is a potential mutual benefit between the company and EV owners, even if the company provided EV owners with free charging (based on a percentage of their battery capacity) for each day of their attendance. This mutually beneficial zone ranged from 3%–10% of the battery capacity for AC charging and 6%–17% for DC charging. Optimal Pareto values indicated an economic trade-off that benefited both stakeholders, with DC charging proving significantly more profitable for the company than AC charging (between 257.5% to 38.1% depending on the amount of free charging provided). The findings emphasize the need for an equitable pricing mechanism considering the different characteristics of EVs based on the operational and financial benefits for both parties to create a balanced pricing framework for V2G.

Recommended Citation

Andre Leippi, Markus Fleschutz, Kevin Davis, Anna-Lena Klingler, Michael D. Murphy, Optimizing electric vehicle fleet integration in industrial demand response: Maximizing vehicle-to-grid benefits while compensating vehicle owners for battery degradation, Applied Energy, Volume 374, 2024, https://doi.org/10.1016/j.apenergy.2024.123995.