Utilization of electric vehicle fleets in industrial demand response considering vehicle-to-grid benefits and battery degradation

A major challenge will be integrating fleets of EVs into industrial smart grids to increase flexibility. The focus of this paper is a multi-objective optimization problem that minimizes the following two objectives: (i) The electricity cost of a company using its employees' EV batteries as temporary distributed energy storage; (ii) The degradation costs of the EV batteries due to the additional usage by the company. A balance is established between the different objectives based on real-time prices and the effective demand response of the company’s electrical load. The benefit for the company is the utilization of the EVs’ battery storage, which provides temporary storage capacity that is used to take advantage of fluctuating electricity prices. The EV owners are compensated by the company for battery degradation in the form of free electricity for charging. The results showed that an optimal trade-off exists between company profit and battery degradation, such that both the company and EV owners could benefit financially. The relationship was shown to be non-linear, as the weighting on maximizing profits increased, the level of degradation disproportionately increased.