Electric vehicles and demand response: an economic perspective
This paper presents a preliminary economic study on the feasibility of using electric vehicles (EVs) to provide demand response, carried out as part of the GREEN Grid project. A mathematical model is developed to track the charge cycle of an EV battery, and this in turn provides estimates of the cost associated with battery life degradation under different scenarios. Three case studies are presented in this paper: the first investigates the potential cost saving for the EV owner by confining the charging of an EV battery to the night tariff period; the second investigates the financial gain associated with regulating the charging of an EV battery based on spot prices; and the third investigates the possible economic benefit for the EV owner of participating in the electricity market by buying energy at low prices and selling at high prices. The first case also includes the situation of just a battery being used to store energy during the night to run a household during the day. Results show that it is most economical to charge an EV during the night (Case 1), but that it varies considerably depending on the region in New Zealand. Regulating the charging rate depending on the spot price (Case 2) provides a small benefit. Using the EV to trade energy (Case 3) is, in most cases, uneconomic given the degradation of battery life. The variation of Case 1 also shows that at current battery costs, it is not economic to store energy during the night for use during the day. Given that there will be other costs associated with these activities, such as the charger equipment capable of both importing and exporting energy from the grid, the economics do not appear to favour use of EVs for demand response provision, except for the case of simply adjusting the time of charging to suit the tariff.