Integrating Plug-In Hybrid Electric Vehicles And Vehicle-To-Grid Technology Into The New York Electricity Market

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The introduction of plug-in hybrid electric vehicles (PHEVs) into the transportation system will provide both opportunities and challenges for those who own the vehicles and power systems operators. The opportunities come in the form of the ability to provide vehicle-to-grid (V2G) services including peak load reduction and frequency regulation. Utilizing these services can provide profits for the vehicle owners, cost savings for the grid operators, and reduced air pollution. The primary goal of this study is to analyze these benefits from the viewpoint of the individual vehicle owner. It is found that there is little financial incentive when V2G services are used for peak reduction. There is much greater potential for financial return when V2G services are used to provide frequency regulation, likely enough to incentivize many people to participate in such a program. Proposed in this paper is a system that combines these V2G services into a single program, which could have the effect of ensuring profits for the individual, while still providing cost-saving opportunities for grid operators, and emission reductions during the times when it is needed most. In addition to the opportunities brought about by increased penetration of PHEVs, there are challenges as well. This comes mainly in the form of increased demand for electricity. The possible effects on electricity load of increased PHEV penetration and V2G participation are analyzed in this paper. Furthermore, an econometric model is used to predict the effect of increased electricity load on electricity price at each hour of the day. It is found that increased PHEV penetration can (in a regulated charging scheme) increase electricity loads and prices during the hours when electricity loads and prices are currently lowest. Furthermore, if V2G technology is used for peak reduction, electricity loads and prices can be reduced during peak electricity demand hours. The overall effect of this is a flattening of the daily electricity load and price profiles, which is likely to be beneficial for power system operators. The flattening of the daily electricity price profile has the effect of reducing profits when V2G technology is used for peak reduction because it raises the price during charging (buying electricity) and lowers the price during discharging (selling electricity). While the analysis presented here works within the framework of the current electricity markets, it is possible that the best use for V2G technology could come in a program that allows grid operators to dispatch the stored energy for the optimal purpose (e.g.: peak reduction, regulation, reserves, ramping) at any period of time. This would require a different type of market structure, possibly even a separate market for storage, in which V2G services could participate.

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Plug-In Hybrid Electric Vehicle (PHEV); Vehicle to Grid (V2G); Energy


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Union Local


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Mount, Timothy Douglas

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Zhang, Ke

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Agricultural Economics

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M.S., Agricultural Economics

Degree Level

Master of Science

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Government Document




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dissertation or thesis

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