Reliable Frequency Regulation Through Vehicle-to-Grid: Encoding Legislation with Robust Constraints

Dirk Lauinger (), François Vuille () and Daniel Kuhn ()
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Dirk Lauinger: MIT Energy Initiative and Sloan School of Management, Cambridge, Massachusetts 02139
François Vuille: Direction de l’énergie, Lausanne 1014, Switzerland
Daniel Kuhn: Ecole polytechnique fédérale de Lausanne, Risk Analytics and Optimization Chair, Lausanne 1015, Switzerland

Manufacturing & Service Operations Management, 2024, vol. 26, issue 2, 722-738

Abstract: Problem definition : Vehicle-to-grid increases the low utilization rate of privately owned electric vehicles by making their batteries available to electricity grids. We formulate a robust optimization problem that maximizes a vehicle owner’s expected profit from selling primary frequency regulation to the grid and guarantees that market commitments are met at all times for all frequency deviation trajectories in a functional uncertainty set that encodes applicable legislation. Faithfully modeling the energy conversion losses during battery charging and discharging renders this optimization problem nonconvex. Methodology/results : By exploiting a total unimodularity property of the uncertainty set and an exact linear decision rule reformulation, we prove that this nonconvex robust optimization problem with functional uncertainties is equivalent to a tractable linear program. Through extensive numerical experiments using real-world data, we quantify the economic value of vehicle-to-grid and elucidate the financial incentives of vehicle owners, aggregators, equipment manufacturers, and regulators. Managerial implications : We find that the prevailing penalties for nondelivery of promised regulation power are too low to incentivize vehicle owners to honor the delivery guarantees given to grid operators.

Keywords: energy-related operations; math programming (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormsom:v:26:y:2024:i:2:p:722-738

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