Abstract:

In recent years, the use of electric vehicles (EVs) has been studied as an alternative for storage, leading to a much more complex market structure. Small participants are now willing to provide energy, helping to keep the desired balance of supply and demand. In this paper, the authors analyze the electricity spot market, providing a model where EVs decide to participate depending on the underlying conditions. The authors study pricing rules adapted from versions currently in use in electricity markets and focus on two of them for the experimental settings: integer programming (IP) and extended locational marginal (ELM) pricing. The authors particularly pay attention to the properties those prices might satisfy and numerically test them under some scenarios representing different levels of participation of EVs and an active demand side. The results suggest that IP pricing generally derives larger individual uplift payments and further produces public prices that are not well aligned with the final payments of market participants, leading to distortions in the market.