Regime-switching based vehicle-to-building operation against electricity price spikes

Lei Zhang and Yaoyu Li

Energy Economics, 2017, vol. 66, issue C, 1-8

Abstract: Electricity price may present very large spikes due to imbalance between generation and demand, especially during heavily loaded periods. Such peak price may incur significant cost to building operation. With the vehicle-to-building (V2B) technology, electric vehicle battery can be used as temporal energy source for the building load for a short period, which leads to a possible solution for reducing the energy cost during peak-price periods. In this paper, the problem of reducing the energy cost due to the peak price is approached from the prospective of risk management. A regime-switching based risk management scheme is proposed for the V2B operation based on the availability of electric vehicles (EV) plugged in the parking lots attached to the building. In the low risk regime, the objective is to minimize the EV charging cost. While in the high risk regime, the objective is to reduce the potentially high energy cost due the peak price via the power stored in EV batteries. Based on Markov regime-switching model, the operation minimizes the conditional value at risk involved. Simulation results show that the proposed framework can greatly reduce the energy cost against the electricity peak prices.

Keywords: Vehicle-to-building; Electricity price modeling; Spikes; Regime switching models; Risk management; Smart grid; Demand response; Electric vehicles (search for similar items in EconPapers)
JEL-codes: C44 C53 C61 D81 Q41 Q47 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:66:y:2017:i:c:p:1-8

DOI: 10.1016/j.eneco.2017.05.019

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