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An Energy Efficient Solution: Integrating Plug-In Hybrid Electric Vehicle in Smart Grid with Renewable Energy

Yifan Li† , Rakpong Kaewpuang† , Ping Wang† , Dusit Niyato† and Zhu Han∗

School of Computer Engineering, Nanyang Technological University, Singapore ∗ ECE Department, University of Houston, Houston, TX

Abstract—Nowadays, there is a conflict between the rapidly increasing demand for electricity and the requirement for reducing dependence on fossil fuel to decrease the greenhouse gas emissions. Proper utilization of renewable energy such as wind energy is proposed as an efficient solution to address this problem. However, due to the high inter-temporal variation and limited predictability, it is difficult to made full use of renewable energy as supplement to the conventional thermal power plants in smart grid. In this paper, we provide an energy efficient solution to solve this problem: the integration of PugIn-Hybrid Electric Vehicle (PHEV). Through proper charging and discharging processes, the PHEV fleet can act as energy storage when there is excess renewable energy, while in case of energy shortage, the energy can be properly returned to the gird. Optimization models based on stochastic programming are developed for both the cases without PHEV fleet and with PHEV fleet, while various uncertainties such as power price, renewable power and user demand are taken into account. By solving the two stochastic programming problems, the optimal power management solutions are obtained, and the numerical results show that the integration of PHEV can effectively reduce the energy to be generated by conventional thermal power plants, and as a result, the overall energy generation cost can be significantly reduced.

grid [3]. Instead of charging from the conventional power grid, renewable energy such as wind energy is a potential alternative. By properly charging and discharging the PHEV batteries, PHEVs can act as a dispatchable energy storage system, balancing the demand and supply as well as improving the system flexibility and reliability. The emergence of PHEVs offers a solution to the problem of integrating renewable energy into the conventional power grid. Moreover, PHEVs’ batteries can help reduce the power variation of renewable energy. Nonetheless, few research works can be found in recent literature, which connect wind energy utilization and PHEVs [4], [5], [6]. However, none of them considered the optimization problem to maximize the utilization of PHEV in the smart grid environment. In this paper, we study the impact of PHEV integration in smart grid with renewable energy besides the conventional thermal power plants and diesel generators. The main challenge of the power management problem is that various uncertainties need to be addressed. Besides the uncertainty of the renewable energy (which depends on weather condition), the user demand may vary from peak hour to off-peak hour. The power generating cost of thermal generators may vary with time. Thus, to address the aforementioned challenge, we propose a stochastic programming framework to minimize the total power cost under the uncertainties, while meeting the power demand of the consumers in smart grid. First, we consider the power management problem without integration of the PHEV fleet, i.e., there is no battery storage to store the excess renewable energy. Next, we investigate the power management problem with the PHEV integration, i.e., the excess renewable energy may be properly stored and returned to the grid when necessary. Optimal solutions are obtained by solving the two stochastic programming models, and they are compared in the numerical results. The rest of this paper is organized as follows: In Section II, the model of the energy supply system is presented. Section III introduces the stochastic programming framework to solve the power management problem. Performance evaluation of the proposed optimization framework is presented in Section IV. Finally, conclusion is drawn in Section V.

I. I NTRODUCTION One of the main challenges of the smart grid operation is how to effectively incorporate the emerging distributed renewable energy generation with the conventional fuel based power generation [1]. With the rapidly increasing demand for electricity as well as the growing concern in reducing reliance on fossil fuel to decrease the greenhouse gas emissions, the utilization of renewable energy becomes more and more important in the smart grid. While renewable power generation has been widely deployed, it has high inter-temporal variation and limited predictability. To overcome this problem, power storage is a key component that needs to be included in the smart grid to improve the network performance. Due to the high price of the fossil fuel and the aggravating environmental issues, Plug-in Hybrid Electric Vehicles (PHEVs) have gained high popularity recently. Compared with the conventional vehicles, PHEVs are more energywise, environment friendly, and considered as one of the cheapest transportation solutions for urban traffic environments [2]. One of the most attractions of PHEVs is that their batteries can serve as energy storage resources in the power

generating power introduces cost. in which the expected cost measured at time stage t is the summation of the current cost at stage t and the expectation of the cost in the future from stage t + 1. Note that c is a penalty factor to penalize the waste of wind energy. . First. In [7] and this paper. At . x t t . c ˜t ∈ Ct . Fig. where the excess wind energy can . we do not have energy storage such as battery. Fig. which consists of conventional thermal power plant and diesel generators. ˜ bt and c ˜t are the corresponding coefficients. ˜ bt . |T | hours). thus for each stage t of the T-stage stochastic w ˜ ˜t = (˜ form. Also. Rt is the set of possible power produced by the renewable power source. while constraint (8) indicates that the renewable energy we utilize cannot exceed the production. d t ∈ Pt . which is further utilized to produce electricity. especially useful for emergency. at stage t. Energy supply in smart grid. to minimize d w the cost at stage t. and Dt is the set of the users’ possible demand. . r ˜t t w d denote the decision variables. Our objective is to minimize the expected cumulative cost over all stages. Case I: Problem Formulation Without PHEV Integration Our power management problem is formulated using the multistage stochastic programming framework [8]. E NERGY S UPPLY S YSTEM We consider multiple power plants coexisting in the smart grid as energy resources to satisfy the energy requirement from consumers. The cost of buying energy d from diesel generators is expressed as p ˜d t xt .. more power has to be generated from thermal or diesel generators to guarantee that the demand can be satisfied. we consider the energy supply system without the integration of the PHEV fleet. Constraints (2)(4) represent the specific case for the first time stage. where T = {1. fuel consumption is the major portion of the operation cost. . linear term and the constant term) of the quadratic thermal cost function.. quadratic cost function is applied to model the thermal energy generation cost. 1 is an example of the smart grid. xw . p ˜d ˜t . Then the thermal energy generation cost at stage 2 t can be expressed as a ˜t xth + ˜ bt xth + c ˜t . we consider the case with PHEV integration. The corresponding random w ˜l ) take values from these sets. In (6).. if the generated wind power is wasted due to inefficient use. diesel generators and renewable power sources. The cost due to possible waste of wind energy can be obtained from p w − xw cp (˜ rt t ). while when the wind power is not enough.e. Bt At . where a ˜t . However. x Let xth t t t the amount of power obtained from the generation of thermal power plants. We have QT +1 (xth . II. ·) = 0. We consider an observation period that consists of |T | stages (e. r t and Ct denote the sets of possible coefficients of different terms (namely the quadratic term.r t) is used to denote the stochastic input data. and the coefficients of the different terms may vary with time. For instance. Note that the formulation is in a nested form. xt . as expressed in (10). E[·] is an exvariables θ T T T pectation over all random variables. . respectively. As the wind energy fluctuates according to weather condition. xt ) is defined with d w the stage-dependent decision variables xth . Constraint (7) guarantees the balance between the energy generation and demand of consumers. composite random variable θ at . the excess wind power will be wasted.2 be properly stored and returned to the power grid when the demand cannot be satisfied due to the lack of wind energy. Note that for both thermal power plants and diesel generating sets. which depends on the random price of generating a unit amount of power by diesel generators and the amount of energy bought. Since in this case. The specific cost definition when t = 1 is expressed in (5). The stochastic programming formulation for the power management problem in Case I is expressed in (1)-(10). dl t. T } denotes the set of time stages. Constraint (9) ensures non-negative power. and d variables (i. diesel generators are widely used since they can provide energy anytime. Different from such conventional power plants. A. which are and x . ˜ bt . wind generators aim at converting kinetic energy from the wind into mechanical energy. p ˜d ˜t ∈ Rt . Pt is the set of possible spot prices of a unit amount of power generated by diesel generators. the function Qt (xth t . where a ˜t ∈ w ˜l ∈ Dt . there may be little wind power. 1. Usually T = 24 for a day-ahead decision making process. at stage t. ˜ bt ∈ B t . i. c ˜t . sometimes there is excess wind power while at other time.g. Different uncertainties are taken into account in our problem formulation. c ˜t . as well as renewable energy resources (wind turbines in the example). it can also be modeled as a cost term according to its potential to supply the load. As an alternative. III. thermal power plant is the main energy resource to satisfy the demand. a ˜t . The diesel energy generation cost can be obtained from the product of the timevarying price of a unit amount of diesel power generation and the actual amount of generation. xt and random ˜t . In the conventional power supply infrastructure. P ROBLEM F ORMULATION The power management problems for the energy supply system with and without the integration of the PHEV fleet are formulated in Section III-A and Section III-B. xd .e. respectively. thus the power generating cost can be ignored when compared to the conventional power plants.

which is expressed in constraint (13). x1 ) d w ˜l xth 1 + x1 + x1 = d1 w xw ˜1 1 ≤r d w xth 1 ≥ 0. x1 ) + Eθ t = 2. d . Constraint (26) indicates the balance of power in the battery storage of the PHEV fleet in two consecutive stages. pd t . Constraint (25) guarantees the balance between the energy generation and demand of consumers.t. The stochastic programming formulation for the power management problem in Case II is expressed in (15)-(32). xθt ≥ 0. For each stage t of the T-stage stochastic form. x1 . xt ≥ 0 d w ˜ th d w th d w ˜ Ct (xth ˜t+1 |θ ˜t Qt+1 (xt . the multistage stochastic programming model defined in (1)-(10) is transformed into the deterministic equivalent formulation (DEF). θ2 ) 1 . The objective function defined in (11) is to minimize the expected total cost. . xt−1 . x1 . xt . bt . xd t ≥ 0. composite random variable ω ˜t = l w ˜ .e. xt . xt ) + Eθ when t = 1. xt . where a t t . xt−1 . Moreover. namely xc t and xt . xt . respectively. ˜t in the multistage stochasThe value of random variable θ tic programming model is given by the realization of an underlying random event (i. The objective is still to minimize the expected cumulative cost over all stages. t w rt and dl are the corresponding scenarios of random variables t w ˜l . B. xt with the same meanings as for Case I. Constraint (27) indicates that the xth . The expected cost that we attempt to minimize consists of three parts. The constraint in (14) is the same as that in (9). xt . rt . th d w dl θt = xθt + xθt + xθt w xw θt ≤ R θt d w xth θt ≥ 0. x1 ≥ 0 d w th d w th d w ˜ C1 (xth ˜2 Q2 (x1 .xd . Here Yt denotes the set of possible energy consumption of the PHEV fleet at stage t. p ˜d t t t t data. in the DEF.x1 min d w C1 (xth 1 . where d w ˜l xth t + xt + xt = dt w xw ˜t t ≤r th w xt ≥ 0. Constraint (7) indicates that under scenario θt observed at stage t. x1 . ˜ bt . where y ˜t ∈ Yt . diesel generation xθt and wind generation xθt should satisfy the demand of the consumers. besides the thermal power plants. the cost of buying power from diesel generators. ct ∈ Ct .. θt+1 ) t . and the cost due to waste of the renewable power. xθt and xθt are based on scenario . dl ∈ D } . xt . xt ) 2 = (˜ at xth +˜ bt xth ˜t ) t t +c d d p w w + p ˜t xt + c (˜ rt − xt ). c ˜t . . p ˜d ˜t and d t. d w Besides decision variables xth t . denoting the amount of power charged and discharged to the PHEV fleet. T. scenario) θt defined over the event space (i. two more decision variables are introduced r in the formulation for Case II. c ˜t . θt ) ≡ Ct (xt . diesel generators and renewable power sources. To obtain the optimal power management solution without the integration of the PHEV fleet.t.xt (1) (2) (3) (4) (5) s.3 d w xth 1 .xw θt θt θt (11) (12) (13) (14) s. pt . r ˜ (˜ at . For instance. ˜ bt . xt ) is defined as follows: d w Ct (xth t . θ d w xth t . namely the thermal energy generation cost. The cost function w d Ct (xth t . min th πθt (aθt xth θt + bθt xθt + cθt ) t∈T θt ∈Θt d p w w +pd θt xθt + c (rθt − xθt ) 2 θt ∈ Θt . x1 . the problem formulation is different from Case I mainly due to the effect of the PHEV battery storage. xd . xth θt is the amount of power to be generated from the thermal power plants under scenario θt at w stage t. y ˜ ) is used to denote the stochastic input . . where and for t t t (6) (7) (8) (9) (10) s. xt . xw .t. rt ∈ Rt .x1 .. w l More specifically. . Note that the PHEV battery storage can act as an additional power source to provide energy to the demand of the consumers. ct . And the wind energy utilization under scenario θt at stage t should not exceed the wind power generation. the thermal generation d w xth θt . x1 ≥ 0. d w The decision variables xth θt . Case II: Problem Formulation With PHEV Integration With an integration of the PHEV fleet. Θt = {θt |θt = (at . respectively.xt . the a ˜t . The corresponding DEF is expressed in (11)-(14). θt ) is expressed as ˜t ) min Ct (xth . d w ˜ Qt (xth t−1 . at ∈ w d At .r t expectation operation is replaced by the weighted summation of probabilities of the scenarios denoted by πθt . x1 . which can be solved by traditional optimization solver software. xt . x1 ) ≡ C1 (x1 .e. xθt ≥ 0. bt . dt ). ct . The explanations of the other random variables remain the same as described for Case I in Section III-A. and y ˜t take values from this set. the set of all possible scenarios) Θt [9]. and Rθ represents the amount of generated renewable t power under scenario θt at stage t. bt ∈ Bt .

while the price at non-peak hours is 12 cents per hour. xt ) = (˜ t t +c d d p w w c q c 2 +˜ pt xt + c (˜ rt − xt − xt ) + c (xt + xr t) 2 event space Ωt . (33) Similar as Case I. at stage t. xt ≥ 0.4 and 0. xt . which is represented by constraint (28). we consider two scenarios. IV. x1 . xt . xt . and at = 0. where and for min d w c r Ct (xth ˜t) t . x1 . xt . where thermal power plants. x1 ≥ 0 d w c r th d w c r th d w c r ˜ C1 (xth ˜ 2 Q2 (x1 . ω t .e. P ERFORMANCE E VALUATION We consider the energy supply system as shown in Fig.e. xt . xt−1 . The d w c r cost function Ct (xth t . with probability 0. For the diesel power price. Again. The wind power generation.xωt . xt . x1 .xt . . d w c r Qt (xth ˜ t ) is expressed as t−1 .xt .37 kW h. x1 ≥ 0. θ2 ) 1 . Constraints (16)-(22) represent the specific case for the first time stage.x1 . . The value of random variable ω ˜ t in the multistage stochastic programming model is given by the realization of an underlying random event ωt defined over the . xt . while constraint (31) ensures non-negative power.13 kW h. . only excess wind energy is used to charge the PHEV fleet. 73. 133. x1 . from 8:00 in the morning to 12:00 at night).e. xt .x1 . xt . x1 . thermal power generation price. 1. x1 . ω t . xt . xωt . x1 . For the randomness of the wind turbines. xt . namely the peak hour and non-peak hour. 104. Constraint (29) indicates that the energy returned back to the power grid cannot exceed the amount of power stored in the battery storage of the PHEV fleet. diesel power generation price and the demand are considered to be random.77 kW h. xt . x1 . The decision variables xth ωt . xt . x1 ) d w r ˜l xth 1 + x1 + x1 + x1 = d1 c r xb ˜1 = xb 1 + x1 − x1 − y 2 w xw ≤ r ˜ 1 1 w xc ˜1 − xw 1 ≤r 1 r b x1 ≤ x1 xb 1 =B d w c r xth 1 ≥ 0. xt . namely the thermal energy generation cost. xt ≥ 0. at = 0. The DEF is expressed in (34)-(42). respectively. diesel generators and renewable power sources are the energy sources to supply the demand of the load. x1 . T. Here we consider wind turbines as the renewable power sources. xt .t. xt . xt−1 . xt . x1 ≥ 0. xt−1 . Here the expected cost we attempt to minimize consists of four parts. the cost due to waste of the renewable power and the cost due to the negative effect of the charging/discharging processes (charging/discharging too much may reduce the life time of the battery). we transform the multistage stochastic programming model defined in (15)-(32) into the DEF to obtain the optimal power management solution. the uniform distribution is used to describe the probability distribution. xt ) is defined as follows: d w c r Ct (xth at xth +˜ bt xth ˜t ) t .02 kW h. The demand varies from 10 kW h to 290 kW h. from 12:00 at night to 8:00 in the next morning). xt−1 . Probabilities of the scenarios are denoted by w w d πωt in this case. x1 ) + Eω t = 2. we consider six levels of wind power. Yωt represents the amount of PHEV power consumption under scenario ωt at stage t. 42.. xt ≥ 0 th d w c r d w c r d w c r ˜ t+1 ) Ct (xth ˜ t ) ≡ Ct (xth ˜ t+1 |ω ˜ t Qt+1 (xt . x1 . also. x1 .. the wind power is 13.t. For the thermal power price. where d w r ˜l xth t + xt + xt + xt = dt b c r b xt + xt − xt − y ˜t = xt w w xt ≤ r ˜t c w xt ≤ r ˜t − xw t r b xt ≤ xt xb 1 =B d w c r xth t ≥ 0. . xt . xt . where cq is the corresponding penalty factor.x1 .3 cents at daytime hours (i. x1 . i. when t = 1. x1 . In our model. x1 ) ≡ C1 (x1 . we assume that bt = ct = 0 for all t ∈ T . xt . x1 ≥ 0. xt ) + Eω renewable energy we utilize cannot exceed the production. xωt and w xωt are based on scenario ωt ∈ Ωt .2 cents during the night (i.. ω (24) (25) (26) (27) (28) (29) (30) (31) (32) s. ω d w c r xth t .6. xt ≥ 0. xt . uniform probability distribution is assumed.xt . from level 1 to level 6. the cost of buying power from diesel generators. The power price at peak hours is 15 cents per hour.xt (15) (16) (17) (18) (19) (20) (21) (22) (23) s.88 kW h.x1 min d w c r C1 (xth 1 .9102 kW h and 165.4 d w c r xth 1 . Constraint (30) specifies the initial power storage in the batteries.

generally for more time periods. as shown in Figs. but less than 50 kWh is charged to the PHEV battery. The reason is that. 3(b). 2(e). we charge more wind energy.. it can be observed that as the penalty factor for charging/discharging battery increases from 0. xωt ≥ 0. thus it is not possible that all energy stored in the battery can be fully returned to the power grid when needed. there is always excess wind energy. it can be observed that the energy generated by thermal or diesel generators is much less. the cost difference between Case II and Case I is higher when the demand size is small. xωt ≥ 0 c r xωt ≥ 0.e.. It can be concluded that with the integration of the PHEV fleet. 3(f). This can also explain why the utilization of the wind energy always follow the variation of the demand. This is mainly due to the effect of the penalty term for charging/discharging in the cost function definition. it can be simply anticipated that all excess wind energy will be stored into the PHEV battery within the limit of the capacity. i. and excess wind stored in the battery of PHEV can be returned back to grid when the wind is not enough in other hours. thus the cost is high due to the introduction of the penalty term for wasting wind energy in the objective function of the stochastic programming model. the wind energy will be totally wasted. with the PHEV battery. the wind energy is the main power source to satisfy the demand as expected. The proposed stochastic programming model attempts to achieve a balance here. It is clearly shown that when there is excess wind energy. Moreover. However.t.e.0001 to 0. 2(a).5 The penalty for wasting wind cp is 50 cents per kWh. since when the demand size is small. the excess wind power is 100 kWh. Optimal Charging and Discharging Processes The key difference between Case II and Case I is the integration of the PHEV fleet. On the other hand. less thermal or diesel energy is required. 3(a). less thermal energy is required with the integration of the PHEV fleet. 2(d). This result accords with our expectation.xωt r xc . the charging power is dramatically reduced. Similarly. 2(b) with Fig. wind energy can be properly stored in some hours when there is excess wind. because of the penalty factor for the charging process due to the consideration of prolonging the battery life. On the contrary. The initial power stored in the battery of the PHEV fleet is 50 kWh.01. 3(a)-(b). Similar reason can be used to explain the discharging power variation with the penalty factor. the excess wind energy can be properly stored to reduce the waste of wind energy. through intelligent charging and discharging processes. excess wind power in some hours can be properly stored and returned back to the power grid when there is lack of wind. A. 2(c). As shown in Fig. the PHEV battery acts as an additional energy source to satisfy the demand. Note that the part below the x-axis represents the case that there is lack of wind energy.xωt . The comparison results are shown in Figs. To minimize the expected cumulative cost. i. Without the integration of the PHEV fleet. it can be observed that with the integration of the PHEV fleet.x ωt ωt (34) (35) (36) (37) (38) (39) (40) (41) (42) In Figs. Comparing Fig.0001. the wind energy can satisfy the demand. d w r l xth ωt + xωt + xωt + xωt = dωt c r b xb ωt + xωt − xωt − Yωt = xωt+1 w w xωt ≤ Rωt w w xc ωt ≤ Rωt − xωt b xr ωt ≤ xωt xb 1 =B d w xth ωt ≥ 0. In this case. which increases with the amount of power generation much faster than that of the diesel energy generation cost. The comparison results are more clearly illustrated in Figs. the discharging process occurs. we describe the excess wind using the red dashed curve. However. 2(a) and Fig. less energy will be charged to the battery. the advantage of the PHEV fleet is more obvious with smaller demand size. and compare the expected cumulative cost under different demand size. we vary the size of the consumers’ demand. therefore. Since the thermal energy generation cost is in quadratic form. Note that at hour 1. storing too much power to the battery at one time may not the optimal choice. 2(a)-(e). As shown in Fig. when the penalty on the charging process is high. power can be generated from thermal power plants and diesel generators. the expected cumulative cost is always lower than the case without PHEV. xωt ≥ 0 B. since utilizing wind introduces no cost. In Fig. As shown in Fig. while when the wind energy is not enough. Optimal Power Management Solution Comparison for Case I and Case II The stochastic programming model for Case I and Case II are implemented using GAMS and the optimal power management solutions are obtained for both cases. The effect of penalty factor cq is illustrated more clearly by Figs. more power is generated from diesel generators than that of the thermal power plants for most of the time. as shown in Fig. and meanwhile. min th πωt (aωt xth ωt + bωt xωt + cωt ) t∈T ωt ∈Ωt d p w w c +pd ωt xωt + c (rωt − xωt − xωt ) r 2 +cq (xc ωt + xωt ) 2 d w xth ωt . s. . through the help of the battery storage. 2(c)(d). and the penalty for charging/discharging the PHEV battery is set to be 0. Note that the PHEV fleet itself also consumes energy to meet the requirement of the regular use. when the penalty factor is small. 2(b). As an extreme case in which no penalty is considered for the charging process. the zero-cost wind energy will be used to the maximum extent. when the wind energy is not enough. we charge the battery of the PHEV fleet. much less diesel power is needed to satisfy the demand.

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