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Timing Is Everything: Optimal EV Charging To Maximize Welfare

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  • Castro Abril, Miguel

Abstract

The new surge in electric vehicle (EV) charging in Texas can be served efficiently during the early morning hours with large wind generation, low electricity demand, low prices, and low environmental damage. This paper simulates the ERCOT wholesale electricity market and its environmental damages (CO2, SO2, NOx, and PM2.5) to find out how charging should be spread among hours to maximize welfare and the performance of different tariff schemes (hourly vs. day-night and private vs. social costs). The efficient charging schedule, incurring low costs and damages, is the opposite of current patterns: while users charge mostly in the evening (18-23 H), EVs should be charged during the first hours of the day (0-4 H). Constraining power withdrawals to the current Level 1 and 2 chargers reduces welfare gains since it limits using energy from those hours with lower prices and marginal damages. A day-night tariff reflecting social costs can achieve most of the gains of the first best, reducing carbon and air pollution damages below those of the current patterns.

Suggested Citation

  • Castro Abril, Miguel, 2020. "Timing Is Everything: Optimal EV Charging To Maximize Welfare," IDB Publications (Working Papers) 10101, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:10101
    DOI: http://dx.doi.org/10.18235/0002147
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    More about this item

    Keywords

    EV charging; Wholesale electricity markets; Emissions taxes; Time-variant electricity pricing;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment

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