Pricing of Vehicle-to-Grid Services in a Microgrid by Nash Bargaining Theory

Abstract

Owners of electric vehicles (EVs) can offer the storage capacity of their batteries to the operator of a microgrid as a service called vehicle-to-grid (V2G) to hold the balance between supply and demand of electricity, particularly when the microgrid has intermittent renewable energy sources. Literature review implies that V2G has economic benefits for both microgrid operator and EV owners, but it is unclear how these benefits are divided between them. The challenge grows when the policy makers rely on the V2G revenue as an incentive for expanding the penetration of EVs in the automotive market. This paper models the interaction between microgrid operator and EV owners as a bargaining game to determine how the benefits of V2G should be divided. The method has been implemented on a hybrid power system with high wind penetration in addition to diesel generators in Manjil, Iran. The results indicate that, in addition to V2G benefits, government subsidies are necessary to promote the use of EVs.