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Unlocking Flexible Electric Vehicle Charging via New Rate Design

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  • Icaro Silvestre Freitas Gomes
  • Adam F. Abdin
  • Jakob Puchinger
  • Yannick Perez

Abstract

A high penetration of electric vehicles (EVs) will deeply impact the management of electric power systems. The risk of not providing adapted EV pricing signals can lead to inefficient investments in grid infrastructure. To avoid costly grid reinforcements and to ensure proper guidance for EV charging, a solution allowing customers to access EV-only rates without installing a separate meter, which we refer to as submetering, is an attractive option for EV owners and grid operators. We develop a game-theoretical model expressed and treated as a mathematical program with equilibrium constraints (MPEC) to capture the interaction between a national regulatory authority (NRA) designing these tariffs and heterogeneous agents. This framework represents a stylized regulatory setup applicable to several European countries. First, we analyse the conditions in which EV-only tariffs can be applied for domestic charging by comparing different energy profiles. Second, we study the impact of EV charging on different tariff structures to identify the most efficient way of recovering network costs. We found that the adoption of submetering under a pure volumetric tariff can bring yearly gains varying from $ 64 to $ 125 to consumers with EV. Finally, we derive policy implications from the results.

Suggested Citation

  • Icaro Silvestre Freitas Gomes & Adam F. Abdin & Jakob Puchinger & Yannick Perez, 2024. "Unlocking Flexible Electric Vehicle Charging via New Rate Design," The Energy Journal, , vol. 45(3), pages 231-272, May.
    • Handle: RePEc:sae:enejou:v:45:y:2024:i:3:p:231-272
    DOI: 10.5547/01956574.45.3.igom
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    References listed on IDEAS

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    1. Alexandre Mayol & Carine Staropoli, 2021. "Giving consumers too many choices: a false good idea? A lab experiment on water and electricity tariffs," European Journal of Law and Economics, Springer, vol. 51(2), pages 383-410, April.
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    4. Severin Borenstein, 2017. "Private Net Benefits of Residential Solar PV: The Role of Electricity Tariffs, Tax Incentives, and Rebates," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(S1), pages 85-122.
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    Cited by:

    1. Yang, Mengqi & Lin, Boqiang, 2024. "The development of consumer preferences for electric vehicle charging infrastructure in China: Evidence from a questionnaire survey with a four-year interval," Energy, Elsevier, vol. 307(C).

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