A Cost Benefit Analysis of Vehicle-to-Grid (V2G) Considering Battery Degradation Under the ACOPF-Based DLMP Framework

Highlights: What are the main findings? Vehicle-to-grid (V2G) implementation does provide additional revenue and/or savings relative to smart charging. The costs of V2G implementation more than offset the marginal financial benefits EV owners can generally receive at this current time. What is the implication of the main finding? V2G adoption by individual EV owners, given current costs and benefits, is likely to be challenged despite the overall system benefits prior works find it provides. If V2G adoption is going to significantly increase, financial benefits to EV owners must increase—which may ultimately reduce or even eliminate the system benefits prior work estimates V2G provides. This paper seeks to provide a cost benefit analysis of the implementation of a vehicle-to-grid (V2G) charging strategy relative to a smart charging (V1G) strategy from the perspective of an individual electric vehicle (EV) owner with and without solar photovoltaics (PV) located on their roof. This work utilizes a novel AC optimized power flow model (ACOPF) to produce distributed location marginal prices (DLMP) on a modified IEEE-33 node network and uses a complete set of real-world costs and benefits to perform this analysis. Costs, in the form of the addition of a bi-directional charger and the increased vehicle depreciation incurred by a V2G strategy, are calculated using modern reference sources. This produces a more true-to-life comparison of the V1G and V2G strategies from the frame of reference of EV owners, rather than system operators, with parameterization of EV penetration levels performed to look at how the choice of strategy may change over time. Counter to much of the existing literature, when the analysis is performed in this manner it is found that the benefits of implementing a V2G strategy in the U.S.—given current compensation schemes—do not outweigh the incurred costs to the vehicle owner. This result helps explain the gap in findings between the existing literature—which typically finds that a V2G strategy should be favored—and the real world, where V2G is rarely employed by EV owners.