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608 IEEE TRANSACTIONS ON SMART GRID, VOL. 6, NO.

2, MARCH 2015

Electric Vehicle Charging Stations With Renewable


Power Generators: A Game Theoretical Analysis
Woongsup Lee, Member, IEEE, Lin Xiang, Student Member, IEEE, Robert Schober, Fellow, IEEE,
and Vincent W. S. Wong, Senior Member, IEEE

Abstract—In this paper, we study the price competition among influence of a large number of EVs on the smart grid can be
electric vehicle charging stations (EVCSs) with renewable power substantial. Therefore, EVs are considered to be one of the
generators (RPGs). As electric vehicles (EVs) become more pop- major consumers of electricity in smart grid [3]. As a conse-
ular, a competition among EVCSs to attract EVs is inevitable.
Thereby, each EVCS sets its electricity price to maximize its quence, analyzing the effect of EV charging on smart grid and
revenue by taking into account the competition with neighboring designing an optimal charging strategy for EVs are crucial.
EVCSs. We analyze the competitive interactions between EVCSs One strategy for charging EVs is to charge them when the
using game theory, where relevant physical constraints such as the price of electricity is low, e.g., at night time [4]. In [3], the
transmission line capacity, the distance between EV and EVCS, fluctuation of the power level of the grid is controlled by
and the number of charging outlets at the EVCSs are taken into
account. We show that the game played by EVCSs is a supermodu- adjusting the charging of EVs. The effect of power losses in
lar game and there exists a unique pure Nash equilibrium for best the transmission line is taken into account in [5]. Moreover,
response algorithms with arbitrary initial policy. The electricity state-of-the-art mathematical techniques such as mean-field
price and the revenue of EVCSs are evaluated via simulations, game and particle swarm optimization have been used to ana-
which reveal the benefits of having RPGs at the EVCSs. lyze and optimize EV charging. A mean-field game model is
Index Terms—Electric vehicle (EV), electric vehicle charg- considered in [6] to analyze the behavior of EVs that want to
ing station (EVCS), game theory, pricing, renewable power be charged at minimum cost. In [7], the EV charging schedule
generation. is optimized by using particle swarm optimization. Moreover,
in [8], a distributed congestion control algorithm for inter-
I. I NTRODUCTION net traffic is modified to control EV charging in a distributed
MART GRID is the next generation power grid. It is manner. In addition, the users’ preferences are investigated for
S foreseen that the generation of electricity from renewable
sources will constitute a large portion of the total electricity
different EV charging strategies in [9].
Most of the existing works on EV charging assume that
generation in smart grid [2]. Thus, renewable generation will the charging takes place at home. However, given that vehi-
play a significant role in smart grid and analyzing its effects cles employing internal combustion engines are refueled at gas
is important. stations, EVs can also be charged at electric vehicle charging
An interesting aspect of the future smart grid is the impact stations (EVCSs) [10]. The use of EVCSs is attractive for the
of the expected large number of electric vehicles (EVs). following reasons.
Although the effect of a single EV is small, the aggregate 1) An EVCS can buy electricity from the power grid at a
lower rate compared to the rate that an EV owner has
Manuscript received January 28, 2014; revised June 7, 2014, to pay to charge at home,1 such that EV charging at the
August 16, 2014, and October 15, 2014; accepted November 16,
2014. Date of publication December 18, 2014; date of current version EVCS can be cheaper than charging at home.
February 16, 2015. This work was supported in part by the Information 2) An EV may run out of electricity while traveling and
and Communication Technology (ICT) Research and Development Program immediate charging becomes inevitable. There are some
of Ministry of Science, ICT, and Future Planning/Institute for Information
& Communications Technology Promotion (1491104001, Development of previous works that consider the operation of EVCS.
Public Safety-Long-Term Evolution System and Terminal for National Public In [12], the optimal deployment of EVCSs is investi-
Safety Service); and in part by the Ministry of Science, ICT, and Future gated, and in [13], the effect of local energy storage at
Planning, Korea, in the ICT Research and Development Program 2013 under
Grant 2014-044-003-002. This paper was presented in part at the IEEE EVCSs is studied.
SmartGridComm 2013 [1]. Paper no. TSG-00064-2014. When multiple EVCSs coexist under different ownerships, a
W. Lee is with the Department of Information and Communication price competition among the EVCSs to attract EVs is unavoid-
Engineering, Gyeongsang National University, Tongyeong 650-160, Korea
(e-mail: wslee@gnu.ac.kr). able, e.g., an EVCS can attract more EVs by offering a lower
L. Xiang and R. Schober are with the Institute for Digital Communication, electricity price compared to its neighboring EVCSs. Then, the
Friedrich-Alexander-University Erlangen-Nürnberg, Erlangen D-91058, electricity price can be different for different EVCSs which is
Germany.
V. W. S. Wong is with the Department of Electrical and Computer analogous to the heterogeneity of the gas price at different gas
Engineering, University of British Columbia, Vancouver, BC V6T 1Z4, stations.
Canada.
Color versions of one or more of the figures in this paper are available
online at http://ieeexplore.ieee.org. 1 For example, in the U.S., the rate of electricity for the residential sector
Digital Object Identifier 10.1109/TSG.2014.2374592 is 30% higher than that for the commercial sector [11].
1949-3053 c 2014 IEEE. Personal use is permitted, but republication/redistribution requires IEEE permission.
See http://www.ieee.org/publications_standards/publications/rights/index.html for more information.

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LEE et al.: EVCSs WITH RPGs: A GAME THEORETICAL ANALYSIS 609

Most of the previous work in smart grid do not consider the


price competition between EVCSs. Although some previous
works have studied the price competition between gas stations,
(see [14]), the analysis for conventional gas stations cannot be
applied to EVCSs. This is because unlike gas stations, EVCSs
are able to produce electricity without introducing additional
generation cost by installing their own renewable power gener-
ators (RPGs), e.g., photovoltaic (PV) generators. Specifically,
unlike gas stations, EVCSs can obtain revenue by produc-
ing electricity and also earn commission by selling electricity
to EVs.
Herein, we consider the price competition between EVCSs
with RPGs. The main contributions of this paper are as follows.
1) We model the price competition between EVCSs with
Fig. 1. Illustration of the interaction between EVCSs and EVs.
RPGs using a game theoretical framework. Moreover,
the supermodularity and the convergence of the consid- l is the preference group index of EV j. Let J denote the set
ered game are proved. These properties justify the use of of EVs. Then, if EV j ∈ J selects EVCS i, the utility can be
the adopted game model for predicting the competitive written
interactions between EVCSs.  
2) We study the price of electricity and the revenue of the −g di,j − pi + μl,i . (1)
EVCSs based on computer simulations. In the simu-
The EV chooses the EVCS which maximizes its utility.
lations, realistic system parameters, e.g., the expected
Therefore, EVCS i∗ , which is chosen by EV j, can be found as
renewable generation profile of the EVCS generated
 
from measurement data, have been used. Results show i∗ = argmin g di,j + pi − μl,i (2)
that the generation of renewable energy at the EVCSs i∈I
decreases the electricity price and increases the revenue where I is the set of all EVCSs and pi is the electricity price
of the EVCS. Thus, it is beneficial to adopt RPGs at charged by EVCS i.
EVCSs for both the EVs and EVCSs as long as the cost Note that in this paper, we assume that EVs select an EVCS
incurred by RPG is not too high. independent of the behavior of other EVs. On the other hand,
The rest of this paper is organized as follows. We in practice, EVs may take into account the behavior of other
present the system model in Section II. In Section III, the EVs when making their selection because they may suffer from
game theoretic model for competing EVCSs is developed. long waiting times if they choose an EVCS which has a large
Simulation results based on empirical data are provided in number of customers. However, in this paper, we consider a
Section IV and Section V concludes this paper. myopic EVCS selection scheme to make the analysis tractable.

II. S YSTEM M ODEL B. EVCSs


In this section, we present an analytical model for EVs and We assume that there are multiple EVCSs under different
EVCSs. The considered system model is depicted in Fig. 1. ownerships and the EVCSs are capable of producing electric-
ity with RPGs without incurring additional generation cost.
We also assume that an EVCS has to keep its electricity price
A. EVs
fixed for at least a time period of t and the amount of elec-
In order to focus on the competitive behavior of the EVCS, tricity that EVCS i can generate within t from its own RPGs
we only consider EVs which want to charge their batteries at is Wi . Although we assume the RPGs generation cost is negli-
EVCSs. Other charging options, e.g., charging at home, are not gible, the cost of initial installation and maintenance is taken
considered in this paper. We assume that the EVs which want into account. In particular, we assume that the cost incurred
to charge their batteries at an EVCS are uniformly distributed by RPG in time interval t is zi , which is assumed to be
in a given area. An EV selects an EVCS based on the electric- proportional to the generation capacity of RPG. Furthermore,
ity price offered by the EVCS, its distance from the EVCS, and we assume that the EVCSs do not have local energy storage
its own preference for a certain EVCS. Let the negative effects, facilities,2 because of the high cost of storage and the fact
e.g., the increased driving time and energy consumption, that that frequent charging and discharging may severely shorten
distance has on the selection of an EVCS be modeled by a the lifetime of storage units [15]–[17]. In addition, we assume
function g(di,j ), where di,j is the distance between EVCS i and that EVCS i has Oi charging outlets, i.e., at most Oi EVs can
EV j. In this paper, we assume that g(di,j ) is a monotonically be charged at the same time.
increasing function of di,j ≥ 0. Moreover, we assume that EVs
can be categorized into L preference groups, i.e., EVs which 2 The deployment of energy storage would change the EVCSs’ strategies

belong to the same preference group have the same preference significantly, because EVCSs can store electricity generated from RPGs for
later usage. As a result, the different EVCSs’ pricing strategies are coupled
profile regarding the EVCSs. Furthermore, let μl,i denote the in a time-dependent manner and the competition between the EVCSs turns
preference of the EVs in preference group l for EVCS i, where into a stochastic game, which is difficult to analyze.

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610 IEEE TRANSACTIONS ON SMART GRID, VOL. 6, NO. 2, MARCH 2015

The total expected amount of electricity demand at EVCS The shape of the coverage area of the EVCSs for prefer-
i within t is denoted by γi , and Ni is the expected num- ence group l depends on the selection criterion in (2). For
ber of EVs which choose EVCS i. Ni can be calculated general functions g(·), the boundaries of the coverage areas
based on (2). Moreover, let Cavg be the expected amount will have curvature. Therefore, in general, the coverage areas
of electricity required for charging one EV. Furthermore, let of the EVCSs are not polygons which complicates the analysis.
Bavg be the mean battery capacity of each EV and Savg SoC be However, it is shown in the following lemma that if and only if
the mean state-of-charge (SoC) of an EV visiting an EVCS, g(·) in (2) has a unary quadratic form such that g(di,j ) = ζ1 di,j
2 ,
SoC represents the ratio of the electricity remaining in
i.e., Savg where ζ1 is a nonnegative constant which characterizes the
the battery and the capacity of the battery. In addition, we severity of the penalty of distance, the coverage area of each
assume that each EV is fully charged at the EVCS. Thus, EVCS is a polygon.
Cavg = Bavg (1−Savg SoC ) and γ = C
i avg ·min(Ni , Oi ). The EVCSs Lemma 1: The coverage area is a polygon and each bound-
have two options for selling the electricity generated by their ary of the coverage area is orthogonal to the line adjoining
RPGs. First, EVCS i can sell its electricity to the power grid the two EVCSs which share the boundary if and only if
wp
at price pup . Second, it can sell the electricity at price pi to g(di,j ) = ζ1 di,j
2 .
wp
EVs by charging them, see Fig. 1. The value of pup is deter- Proof: Please refer to the Appendix.
mined by the power grid and is likely to be identical to the
wholesale electricity price. However, EVCS i can freely set
wp III. P RICE A DJUSTMENT G AME
pi to maximize its revenue and pi will be larger than pup ,
because otherwise there is no incentive for EVCSs to sell their In this section, we formulate the price competition between
electricity to EVs. EVCSs as a supermodular game and investigate the character-
If γi > Wi , the amount of electricity generated by the RPG is istics of the considered game.
insufficient to satisfy the electricity demand within t. Then,
EVCS i buys additional electricity from the power grid at retail A. Game Model
wp wp
price pdn , and correspondingly, the EVCS pays pdn (γi −Wi ) to Under our system model, the EVCSs will not cooperate
the power grid. Otherwise, if γi ≤ Wi , the amount of electricity because they belong to different owners. As a consequence,
generated by the RPG of EVCS i is sufficient to satisfy the each EVCS will set its electricity price independently and
electricity demand of the EVs visiting EVCS i within t. In selfishly by taking into account the effect of the electricity
this case, its excess electricity, i.e., Wi −γi , is sold to the power price of neighboring EVCSs such that its own revenue is
wp
grid at price pup . The revenue that EVCS i can obtain from the maximized. Thus, we formulate the competitive interactions
wp
power grid by selling the excess electricity is pup (Wi − γi ). In between EVCSs as a noncooperative game where each EVCS
wp wp
this paper, we assume that pup ≤ pdn , i.e., the wholesale price makes decisions independently as follows.
wp wp
pup is equal to or lower than the retail price pdn . It should be 1) Price Adjustment Game Between EVCSs.
wp wp
noted that our formulation also includes the case pup = pdn . a) Players: EVCSs.
In this case, EVCSs will be less eager to sell their electricity b) Strategy: The strategy of the players is the adjust-
to EVs since they can obtain a sufficiently high revenue by ment of the electricity price for charging EVs. In
selling their electricity to power grid, and as a consequence, other words, the strategy of EVCS i is setting pi ,
the price competition between EVCSs will be weaker. where pi ∈ R+ . We will use p−i to denote the vec-
Finally, due to physical constraints, the amount of electricity tor of the electricity prices of all EVCSs except
that can be transferred over a power line is limited [18]. We EVCS i.
let κi be the capacity of the power line connecting EVCS i to c) Payoff: The payoff of EVCS i, πi ( pi , p−i ), is the
the power grid, i.e., the amount of electricity traded between monetary revenue that EVCS i obtains.
the EVCS and the power grid cannot exceed κi . In our system model, EVCS i can generate revenue by
charging EVs and selling the excess electricity to the power
grid. The amount of revenue is pi γi +pup [Wi −γi ]+ . Moreover,
wp
C. Coverage of EVCSs
EVCS i has to purchase additional electricity from the power
We define the coverage of EVCS i as the region in which grid if the amount of electricity from its own RPG is not
the EVs will visit EVCS i for charging. The coverage of sufficient to satisfy the electricity demand of the EV request-
EVCS i can be found by solving (2) for the considered area. ing charging service. In this case, the amount of payment is
pdn [γi − Wi ]+ . Furthermore, the cost incurred by RPG, i.e.,
Apparently from (2), the coverage of EVCS depends on the wp
type of EV, i.e., which preference group an EV belongs to. zi , has to be taken into account. Finally, due to the limited
Let νl be the proportion of EVs in preference group l and capacity of the transmission line [18], the amount of electric-
assume that the distribution of EVs which want to charge their ity being traded between EVCS i and the power grid has to be
batteries is uniform with density λ. Moreover, let Dli be the less than the line capacity, κi , i.e., |Wi −γi | < κi . To ensure that
coverage area of EVCS i for preference group l. Then, γi can the line capacity is not violated, we let the payoff of EVCS i
be calculated as be −∞ when |Wi − γi | ≥ κi . Therefore, the total revenue of
  EVCS i, πi ( pi , p−i ), can be expressed as

L 
γi = Cavg · min Oi , νl Dl λdxdy . (3)        
l=1 i πi pi , p−i = pi γi pi , p−i + f γi pi , p−i − Wi − zi (4)

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LEE et al.: EVCSs WITH RPGs: A GAME THEORETICAL ANALYSIS 611

where f (x) is given by Remark 1: In Theorem 1, we show that g(·) has to be


 wp a unary quadratic function for the considered game to be
pup [−x]+ − pdn [x]+ ,
wp
for |x| < κi a supermodular game. Considering Huff’s work [20] on the
f (x) = (5)
−∞, otherwise. attractiveness of competing facilities which have different dis-
tances to customers, this assumption seems valid. Huff has
Here, γi is a function of pi and p−i , because the demand at
shown that if two facilities are competing with each other to
EVCS i depends not only on the electricity price at EVCS i
attract customers, the probability that a customer goes to one
but also on the prices at the other EVCSs, i.e., p−i .
facility is inversely proportional to the square of its distance
In this paper, we assume each EVCS uses a best response
to the facility. From this, we conjecture that the preference
algorithm to set its electricity price to maximize its own
of customers for one facility is inversely proportional to the
payoff. Therefore, EVCS i has to solve the following max-
square of the distance and the penalty of distance in EVCS
imization problem to determine its electricity price pi :
  selection is proportional to the square of the distance.
maximize πi pi , p−i . (6) Based on Theorem 1, a pure Nash equilibrium can be
p ∈R+
i
achieved with best response algorithms in the price adjustment
The solution of problem (6), p∗i , can be written as game. However, it is not guaranteed that the Nash equilibrium
  is unique and that the equilibrium can be achieved when the
p∗i = argmax πi pi , p−i . (7)
pi ∈R+
initial strategies are arbitrarily chosen and the strategy of each
player is updated at an arbitrary time instant. Therefore, in the
Note that p∗i can only be found numerically, since following theorem, we show that a unique pure Nash equi-
πi ( pi , p−i ) involves function γi ( pi , p−i ), [see (3)], which librium can be achieved by any best response algorithm and
cannot be expressed in closed form. with any initial policy if each EVCS has a sufficient number
of charging outlets such that Ni ≤ Oi .
B. Supermodularity and Convergence of the Game Theorem 2: The electricity price adjustment game for
In the following, we show that the price adjustment game EVCSs has a unique pure Nash equilibrium and the equilib-
between EVCSs is a supermodular game, and based on this rium can be achieved by any best response algorithm with any
supermodularity, we show the convergence of the game. First, initial policy, if g(di,j ) = ζ1 di,j
2 , ∀i ∈ I, j ∈ J , and ζ ≥ 0,
1
let S be the set of strategies that players can choose. Then, and Ni ≤ Oi .
the supermodularity of payoff function πi (x) is defined as Proof: Please refer to the Appendix.
follows [19]. Theorem 2 reveals that even if each EVCS sets its electricity
Definition 1: Payoff function πi (x) is supermodular if and price selfishly and in a distributed manner, the electricity prices
only if the following inequality holds: of all EVCSs converge to unique values such that the result
of price competition can be accurately predicted by using our
πi (x ∧ y) + πi (x ∨ y) ≥ πi (x) + πi (y), ∀x, y ∈ S (8)
game model. This justifies the usefulness of our game model.
where x ∧ y and x ∨ y are the component-wise maximum and
minimum of vectors x and y, respectively. IV. P ERFORMANCE E VALUATION
If function πi (x) is twice differentiable, then πi (x) is In this section, the electricity price and revenue of the
supermodular if the following inequality holds [19]: EVCSs are investigated and the effect of renewable electricity
∂ 2 πi (x)
∂xi ∂xj ≥ 0, ∀x ∈ S, j = i. (9) generation is illustrated.
Let Si be the set of strategies of player i. Also, let si and
A. Simulation Environment
s−i be the strategy of player i and the strategies of all players
except player i, respectively. Then, a supermodular game is Our performance evaluation is conducted based on a real-
defined as follows [19]. istic simulation environment. In particular, we assume that
Definition 2: A game is a supermodular game, if 1) the set the electricity price of EVCSs can change every 30 min, i.e.,
of strategies of player i, Si , is a compact subset of R and 2) πi t = 30 min, because it takes about 30 min to fully charge
is continuous in si and s−i , and 3) πi is supermodular. the battery of an EV if fast charging is used [13]. We also
Supermodular games have some nice properties. assume that eight EVCSs, i.e., |I| = 8, are located randomly
Specifically, pure Nash equilibria exist in supermodular in a 5 km-by-5 km square area in Elizabeth City, NC, USA,
games and the convergence of best response algorithms to a based on the actual density of gas stations in this region and
Nash equilibrium is guaranteed [19]. Now, we will show that an EV market penetration of 17%.3 Moreover, we assume that
the price adjustment game of the EVCSs is a supermodular the density of EVs that visit the eight EVCSs in 30 min is
game if and only if the monotonically increasing function λ = 1.34 EVs/km2 . Therefore, the average number of EVs
g(·) is a unary quadratic function. The supermodularity of the that visit EVCSs every 30 min is 33.5. We also assume that
game is formally stated in Theorem 1. g(di,j ) = 1/2 di,j
2 , ∀i ∈ I, j ∈ J , where the unit of d
i,j is
Theorem 1: The electricity price adjustment game of the meters and the maximum amount of power that can be sent
EVCSs is a supermodular game, if and only if a monotonically 3 There are 46 gas stations in Elizabeth City and the density of gas stations
increasing function g(·) is a unary quadratic function. is 1.85/km2 . Therefore, eight EVCSs will be located in a 5 km-by-5 km square
Proof: Please refer to the Appendix. area, if the EV market penetration is 17%.

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612 IEEE TRANSACTIONS ON SMART GRID, VOL. 6, NO. 2, MARCH 2015

TABLE I
S IMULATION PARAMETERS

(a) (b)

Fig. 2. Coverage areas of EVCSs. (a) Eco-friendly EVs.


(b) Noneco-friendly EVs.

over the power line is 4 MW, i.e., κi = 4 MW. Moreover, we


assume that the number of charging outlets in each EVCS is
15, i.e., Oi = 15.
We let the battery capacity of each EV be 41.8 kWh
which corresponds to the battery capacity of a Toyota RAV 4.
Moreover, we assume that the remaining SoC of EVs arriving
at an EVCS is uniformly distributed4 between 0 and 0.2 such
that Cavg = 37.62 kWh. Furthermore, we assume two different
preference groups for EVs: 1) EVs which prefer EVCSs with
RPGs (referred to as eco-friendly EVs); and 2) EVs which
do not have a preference for specific EVCSs (referred to as Fig. 3. Hourly electricity price for EVCSs.
noneco-friendly EVs). For noneco-friendly EVs, μl,i = 0 and
for eco-friendly EVs, μl,i = 1 if EVCS i has RPG and μl,i = 0
otherwise. In addition, we assume that the proportion of EVs has an RPG whose PV panel size is 900 m2 , and the other
in each preference group is 50%. EVCSs do not have RPGs.
We assume that the RPG employs PV generation. In Fig. 2, the coverage areas of the EVCSs at 11 A . M .
Accordingly, we use the hourly electricity generation data (renewable energy is available) and 11 P. M . (zero renewable
which was measured at Elizabeth City State University in energy) are shown for the different preference groups of EVs.
North Carolina during June 2012 [21]. We scale the gener- First, we can see that the coverage areas are indeed poly-
ation profile according to the size of the PV panel. From the gon, as we have proved in Lemma 1. Second, EVCS 1 has a
generation profile in [21] it is obvious that PV generators pro- larger coverage area at day time (11 A . M .) than at night time
duce electricity only during day time as expected. For the (11 P. M .), because the energy from the RPG (i.e., PV genera-
electricity prices, we adopt the average wholesale and retail tor) leads to a lower electricity price of EVCS 1, which helps
electricity prices in North Carolina in June 2012, i.e., the aver- to attract more EVs for higher revenue. Finally, we observe
wp
age wholesale electricity price is set to pup = 4.018 cents/kWh that the coverage area of EVCS 1 is larger for eco-friendly EVs
wp
and the average retail electricity price is set to pdn = 8.66 (left hand side) than for noneco-friendly EVs (right hand side),
cents/kWh [11]. The simulation parameters are summarized because the eco-friendly EVs prefer an EVCS with RPGs and
in Table I. they might visit EVCS 1 even if it is far from them.
To determine the revenue of the EVCSs, we assume that The hourly electricity prices for EVCSs over one
the cost incurred by RPG for the time interval t, i.e., zi , is day are depicted in Fig. 3. During day time (between
proportional to the size of the PV panel. Based on the product 9 A . M . and 4 P. M .) when EVCS 1 has nonzero renewable
price for PV generators listed in [22], the expected lifetime energy, the electricity prices keep changing due to the varia-
of a PV panel (20 years), and the average cost of operation tion of the amount of renewable energy generated. Specifically,
and maintenance of PV generators, we set zi = 9.81 cents for because of its renewable energy, EVCS 1 can reduce its
RPGs with a PV panel size of 100 m2 , and the cost of RPGs electricity price to attract more EVs. As a consequence, neigh-
with different PV panel sizes can be calculated accordingly. boring EVCSs also have to reduce their electricity prices in
order to avoid losing their customers and eventually the over-
all electricity price drops due to this competitive behavior of
B. Hourly Electricity Price the EVCSs.
First, we evaluate the hourly electricity price in the price
adjustment game between EVCSs when a best response algo- C. Effect of Renewable Electricity Generation at EVCS
rithm is used. In this section, we assume that only EVCS 1
In Figs. 4 and 5, we show the average electricity price per
4 The SoC does not correspond to the battery level of the EV when it decides day and the average monthly revenue of EVCSs as a function
which EVCS to visit but to the battery level of the EV when it actually arrives of the size of the PV panel which corresponds to the renewable
at the EVCS. electricity generation capacity. In the simulations, the positions

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LEE et al.: EVCSs WITH RPGs: A GAME THEORETICAL ANALYSIS 613

Fig. 4. Average electricity price versus the size of PV panel. Fig. 5. Monthly revenue of EVCSs versus the size of PV panel.

of the eight EVCSs are randomly selected. To evaluate the


effect of the penetration level of renewable generation at the high (e.g., Scenarios 2 and 3), the revenue of EVCSs with-
EVCSs, we consider three scenarios. out RPGs drops severely due to the price competition with
1) Only EVCS 1 has an RPG (referred to as Scenario 1). the EVCSs having RPGs, which will motivate all EVCSs to
2) EVCSs 1–4 have RPGs (referred to as Scenario 2). install RPGs.
3) Only EVCS 8 does not have an RPG (referred to as
Scenario 3). V. C ONCLUSION
Then, the electricity price and the revenue of the EVCSs In this paper, the price competition between EVCSs with
with RPG (e.g., EVCS 1 in Scenario 1) and the EVCSs with- renewable electricity generation in smart grid was explored.
out RPG (e.g., EVCS 8 in Scenario 3) at each realization are We modeled the competitive price adjustment of EVCSs as
averaged separately. a game and proved the convergence of the game based on
We observe from Fig. 4 that the average electricity price supermodularity. Through simulations, we investigated the
of EVCSs with RPGs can be slightly higher than that of electricity price and the revenue of EVCSs as a function
EVCSs without RPGs when the size of the PV panel is small, of the generation capacity of RPGs and found that adopting
because eco-friendly EVs prefer EVCSs with RPGs even if RPGs at the EVCSs is beneficial for both the EVs and the
these EVCSs charge a higher price. However, as the size of the EVCSs providing that the cost incurred by adopting RPG is
PV panel increases, EVCSs with RPGs decrease their prices not extremely high.
to attract more EVs. Eventually, the price charged by EVCSs An interesting extension of this paper is the consideration
with RPGs becomes much lower than that of EVCSs without of the use of local storage units at the EVCSs such that the
RPGs. Therefore, having renewable electricity generation with EVCSs can store their surplus renewable energy for future use.
high generation capacity is beneficial to the EVs because the Furthermore, it would be interesting to consider other charging
price of electricity decreases. options for EVs, e.g., charging at home, in the EV charging
It is important to note that the price competition between market.
EVCSs becomes more severe as the penetration level of renew-
able generation increases, i.e., the price competition is the most A PPENDIX
severe in Scenario 3, which has the lowest electricity price, as
Proof of Lemma 1
can be seen in Fig. 4. Moreover, the price competition between
EVCSs also becomes more severe as the size of the PV panel Without loss of generality, assume that EVCS i is located
increases, because the EVCSs with RPGs are eager to sell at (0, 0) and EVCS k which adjoins EVCS i, is located at
their excess electricity to EVs such that the amount of power (dm , 0). Also, let Bl be the set of coordinates of the boundary
sent over the power line does not exceed the limit, κi . As between EVCS i and EVCS k for preference group l. Then,
a result, the electricity price of EVCSs with RPGs can be (x̄, ȳ) ∈ Bl has to satisfy the following equality:
   
even lower than the retail price for the commercial sector, i.e.,
8.66 cents/kWh, which is the price that EVCSs have to pay g x̄2 + ȳ2 − g (dm − x̄)2 + ȳ2
for buying electricity from the power grid. = pk − pi − μl,k + μl,i . (10)
In Fig. 5, we can observe that the revenue of an EVCS with
RPG is higher than that of an EVCS without RPG even when If the coverage area of the EVCS is a polygon and the
the cost incurred by RPG is taken into account. The main rea- boundary of the coverage area is orthogonal to the line adjoin-
son for the higher revenue of EVCSs with RPG is that they can ing the EVCS and its neighboring EVCS, (10) is satisfied for
sell their excess electricity to obtain additional revenue which any ȳ and accordingly the derivative of (10) with respect to ȳ
surpasses the cost incurred by RPG. Although not shown here, has to be zero. In this case, we have


the revenue of EVCS with RPG can be very low if the cost ġ x̄2 +ȳ2

x̄2 +ȳ2
incurred by RPG is very high. However, such high RPG cost
√ = √ (11)
ġ (dm −x̄) +ȳ
2 2 (dm −x̄) +ȳ
2 2
may not be realistic. We also observe from Fig. 5 that if
the penetration level of renewable generation is sufficiently where ġ(·) is the first derivative of g(·).

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614 IEEE TRANSACTIONS ON SMART GRID, VOL. 6, NO. 2, MARCH 2015

Given that dm , x̄, and ȳ can be arbitrarily chosen by which we refer to as f̄ (x), is given by
adjusting pk and pi , (11) should be satisfied for any dm , x̄, ⎧ wp wp
⎪ pup −pdn wp
and ȳ. Then, from (11), we can express ġ( x̄2 + ȳ2 ) and ⎪
⎪ (x + δa )2 − pup x, for |x| ≤ δa


4δa


ġ( (dm − x̄) + ȳ ) as
2 2 ⎪
⎪ −
wp
− 1
+ κi −x
− κi −δa
,

⎪ p δa x log δa δa
  ⎪

dn

ġ x̄ + ȳ = x̄2 + ȳ2 · α1 (x̄, ȳ)


2 2 (12a) f̄ (x) =

for
κi − δ a ≤ x ≤ κi

⎪ wp
− pup + δa x + log δa − δa ,
1 κ +x κ −δ

i i a
  ⎪



ġ (dm − x̄)2 + ȳ2 = (dm − x̄)2 + ȳ2 · α1 (x̄, ȳ). (12b) ⎪
⎪ for − κi ≤ x ≤ −κi + δa

⎩f (x), otherwise.
It should be noted that α1 (·, ·) can be a function of both (15)
x̄ and ȳ.
We note that for δa → 0, we have f̄ (x) → f (x). Therefore,
In the following, we show that α1 (·, ·) has to be a constant.
f (x) can be approximated by f̄ (x) by using a sufficiently small
First, by exchanging we obtain α1 (x̄, ȳ) =
x̄ and ȳ in (12a), δa . Moreover, f̄ (x) is concave because (∂ 2 f̄ (x)/∂x2 ) ≤ 0. In
α1 (ȳ, x̄) because ġ( x̄2 + ȳ2 ) and x̄2 + ȳ2 are unchanged if
Appendix, f̄ (x) will be used instead of f (x).
x̄ and ȳ are exchanged. Moreover, by replacing x̄ in (12a) by
Now, we are ready to prove Theorem 1. In the game
dm − x̄, we obtain
model, the set of strategies for players is a compact subset
  of R and πi is continuous in pi and p−i . Thus, according
ġ (dm − x̄) + ȳ = (dm − x̄)2 + ȳ2 · α1 (dm − x̄, ȳ).
2 2
to Definition 2, we need to verify whether πi is super-
modular, i.e., (∂ 2 πi ( pi , p−i ))/∂pi ∂pk ≥ 0, to determine
(13)
whether the considered game is a supermodular game. First,
(∂πi ( pi , p−i ))/∂pi can be expressed as
Then, from (12b) and (13), we know
α1 (x̄, ȳ) = α1 (dm − x̄, ȳ) for arbitrary dm and accord- ∂πi ( pi ,p−i ) ∂γ ( p ,p )
∂pi = γi ( pi , p−i ) + pi i ∂pi i −i
ingly, α1 (·, ·) has to be a function of ȳ only. Moreover, given
∂γ ( p ,p )    
that α1 (x̄, ȳ) = α1 (ȳ, x̄), we can conclude that α1 (·, ·) has to + i ∂pi i −i f̄˙ γi pi , p−i − Wi . (16)
be a constant.
As a consequence, we find that g(·) has to be a unary Thus, (∂ 2 πi ( pi , p−i ))/∂pi ∂pk can be written as
quadratic function for (12a) and (12b) to be satisfied, because
 
= i ∂pi k −i + pi + f̄˙ γi ( pi , p−i − Wi )
∂ 2 πi ( pi ,p−i ) ∂γ ( p ,p )
α1 (·, ·) is a constant. In other words, unless g(·) is a unary ∂pi ∂pk
quadratic function, (12a) and (12b) cannot be satisfied for any ∂ 2 γi ( pi ,p−i ) ∂γi ( pi ,p−i ) ∂γi ( pi ,p−i )
dm , x̄, and ȳ, and accordingly, the coverage area of the EVCSs × ∂pi ∂pk + ∂pi ∂pk
   
cannot be a polygon whose boundary is orthogonal to the line × f̄¨ γi pi , p−i − Wi . (17)
adjoining two EVCSs which share the boundary.
When g(·) is a unary quadratic function, i.e., g(di,j ) = ζ1 di,j
2 ,
For any monotonically increasing function g(·), it is obvi-
from (10), we obtain ous that if pk increases, γi ( pi , p−i ) will increase when the

coverage areas of EVCS i and EVCS k share a com-
ζ1 x̄2 − (dm − x̄)2 = pk − pi − μl,k + μl,i . (14) mon boundary, i.e., when the two EVCSs are adjacent
to each other, and γi ( pi , p−i ) will be unchanged other-
From (14), we find that the boundary of the coverage area wise. Therefore, we can check that (∂γi ( pi , p−i ))/∂pk ≥ 0.
of two EVCSs is a straight line which is orthogonal to the We can also verify that for any monotonically increas-
x-axis and accordingly, we know that the coverage area of an ing function g(·), (∂γi ( pi , p−i ))/∂pi is negative because the
EVCS is a polygon and the boundary of the coverage area is coverage of EVCS i decreases when it increases its elec-
orthogonal to the line adjoining the EVCS and its neighboring tricity price. Therefore, we find that (∂γi ( pi , p−i ))/∂pk +
EVCS. (∂γi ( pi , p−i ))/∂pi (∂γi ( pi , p−i ))/∂pk f̄¨ (γi ( pi , p−i ) − Wi ) ≥ 0,
as (∂γi ( pi , p−i ))/∂pk ≥ 0, (∂γi ( pi , p−i ))/∂pi ≤ 0, and
Proof of Theorem 1 f̄¨ (x) ≤ 0 due to the concavity of function f̄ (x).
When (∂ 2 γi ( pi , p−i ))/∂pi ∂pk > 0, we can make
Before proving Theorem 1, we note that f (x) is a piecewise
wp wp (∂ πi ( pi , p−i ))/∂pi ∂pk < 0 by choosing sufficiently large
2
linear and concave function because pup ≤ pdn . However,
values for pup and pdn , such that pi + f̄˙ (γi ( pi , p−i ) −
wp wp
f (x) is not continuous in two points, i.e., κi and −κi , and is
not differentiable at 0, κi , and −κi . Given that we have to Wi ) < 0 and |pi + f̄˙ (γi ( pi , p−i ) − Wi )| can be very large.
differentiate πi ( pi , p−i ) with respect to pi to prove the super- Otherwise, if (∂ 2 γi ( pi , p−i ))/∂pi ∂pk < 0, we can make
modularity of the considered game, these nondifferentiable and (∂ 2 πi ( pi , p−i ))/∂pi ∂pk < 0 by increasing pi and p−i by the
noncontinuous points are problematic. To overcome this prob- same amount, such that pi + f̄˙ (γi ( pi , p−i ) − Wi ) becomes
lem, we approximate f (x) by smoothing the function around very large, because as we can see from (10), the coverage
x = 0, κi , −κi , such that the function is continuous and differ- area of the EVCSs does not change when the electricity
entiable in the entire range of x. The approximation of f (x), prices of all EVCSs are increased by the same amount.

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LEE et al.: EVCSs WITH RPGs: A GAME THEORETICAL ANALYSIS 615

Therefore, (∂ 2 γi ( pi , p−i ))/∂pi ∂pk has to be zero to ensure the and ȳ specify the boundary. Furthermore, (19) should be satis-
super-modularity of πi ( pi , p−i ). fied for any dm and accordingly we can choose dm = 2x̄. Then,
In the following, we will show that given that (∂ 2 x̄)/∂pi ∂pk = (∂ 2 ȳ)/∂pi ∂pk = 0, the following
(∂ 2 γi ( pi , p−i ))/∂pi ∂pk = 0 if and only if g(di,j ) = ζ1 di,j 2 . equality holds:
Given that γi is the summation of the demand of the EVs in

g̈ x̄2 +ȳ2
different preference groups, we can consider the case for each
√ = √ 1 . (20)
ġ x̄2 +ȳ2 x̄2 +ȳ2
preference group independently. Therefore, we only consider
the demand from preference group l, which we denote as
Let z̄ = x̄2 + ȳ2 . Then, (20) becomes
γ̄il in the following. For this preference group, we prove our
theorem by dividing the problem into two cases. g̈ (z̄) 1
= . (21)
1) The coverage areas of EVCS i and EVCS k do not share ġ (z̄) z̄
a common boundary. Equation (21) is satisfied only when ġ (z̄) is a linear function
2) The coverage areas of the two EVCSs share a common and accordingly, g(·) is a unary quadratic function, i.e., (20)
boundary. can be satisfied only when g(di,j ) = ζ1 di,j 2 . Hence, for other
First, when the coverage areas of EVCS i and EVCS k do types of g(·) except a unary quadratic function, πi ( pi , p−i )
not share a common boundary, γ̄il ( pi , p−i ) is independent of cannot be supermodular since (21) cannot be satisfied.
pk for any g(·). Therefore, (∂ γ̄il ( pi , p−i ))/∂pk = 0, and as a If g(·) is a unary quadratic function, from Lemma 1,
consequence (∂ 2 γ̄il ( pi , p−i ))/∂pi ∂pk = 0 for any g(·). we know that the change of the boundary of the coverage
Next, consider the case when the coverage areas of the area by varying pi and pk is orthogonal to the y-axis when
two EVCSs share a common boundary. To characterize EVCSs i and j are located at (0, 0) and (dm , 0), respec-
(∂ 2 γ̄il ( pi , p−i ))/∂pi ∂pk , let EVCS i be located at (0, 0) and tively. As a result, (∂ ȳ)/∂pi = (∂ ȳ)/∂pk = 0, and from (19),
its neighboring EVCS k, which shares an edge of the cover- we can easily see that (∂ 2 x̄)/∂pi ∂pk = (∂ 2 ȳ)/∂pi ∂pk = 0, i.e.,
age area with EVCS i, is located at (dm , 0). Then, the edge (∂ 2 γ̄il ( pi , p−i ))/∂pi ∂pk = 0. Therefore, the price adjustment
between EVCS i and EVCS k, which we denote as (x̄, ȳ), is game is a supermodular game if and only if g(di,j ) = ζ1 di,j 2 .
characterized by the following equality:
    Proof of Theorem 2
g x̄2 + ȳ2 − g (dm − x̄)2 + ȳ2
To prove Theorem 2, we need the following two lemmas.
= pk − pi − μl,k + μl,i . (18) Lemma 2: If g(di,j ) = ζ1 di,j
2 , then π ( p , p ) is a strictly
i i −i
concave function of pi , i.e., (∂ 2 πi ( pi , p−i ))/(∂pi )2 < 0.
By differentiating (18) with respect to pk and pi , sequen- Proof: First, we calculate (∂ 2 πi ( pi , p−i ))/(∂pi )2 as
tially, we obtain

∂ 2 πi ( pi ,p−i )    
= 2 i ( ∂pi i −i ) + pi + f̄˙ γi pi , p−i − Wi
   ∂γ p ,p
  ∂ x̄ ∂ ȳ
x̄ ∂p +ȳ ∂p
∂ x̄
x̄ ∂p +ȳ ∂p
∂ ȳ (∂pi ) 2
i i k k

g̈ x̄2 + ȳ2 ∂ 2 γi ( pi ,p−i ) ∂γi ( pi ,p−i ) 2
x̄2 +ȳ2 × + ∂p
   (∂pi ) 2 i
  x̄ ∂ x̄ +ȳ ∂ ȳ x̄ ∂ x̄ +ȳ ∂ ȳ    
∂pi ∂pi ∂pk ∂pk × f̄¨ γi pi , p−i − Wi . (22)
− ġ x̄2 + ȳ2 3
(x̄2 +ȳ2 ) 2 We note that (∂γi ( pi , p−i ))/∂pi < 0. We also know that the
  ∂ x̄ ∂ x̄ ∂ 2 x̄ ∂ ȳ ∂ ȳ ∂ 2 ȳ coverage area of each EVCS for each EV preference group
∂pi ∂pk +x̄ ∂pi ∂pk + ∂pi ∂pk +ȳ ∂pi ∂pk
+ ġ x̄ + ȳ
2 2 √ is a polygon and the boundary changes in the orthogonal
x̄2 +ȳ2 direction of the boundary if pi changes. Moreover, by dif-
  
  (x̄−dm ) ∂ x̄ +ȳ ∂ ȳ (x̄−dm ) ∂ x̄ +ȳ ∂ ȳ ferentiating (18) with respect to pi for g(di,j ) = ζ1 di,j
2 , we
∂p i ∂p i ∂p k ∂p k
= g̈ (dm − x̄)2 + ȳ2 obtain
(dm −x̄)2 +ȳ2
  ∂ x̄
∂pi = − 2ζ11dm . (23)
− ġ (dm − x̄) + ȳ
2 2

   It should be noted that (∂ ȳ)/∂pi = 0 in this case.


∂ x̄ ∂ ȳ ∂ x̄ ∂ ȳ
(x̄−dm ) ∂p +ȳ ∂p (x̄−dm ) ∂p +ȳ ∂p From (23), we find that the rate of change of the coverage
i i k k
× 3 area is a constant regardless of pi and p−i , and accordingly,
((dm −x̄)2 +ȳ2 ) 2
  (∂ 2 γi ( pi , p−i ))/(∂pi )2 = 0. Furthermore, f̄¨ (γi ( pi , p−i ) −
+ ġ (dm − x̄)2 + ȳ2 Wi ) ≤ 0. Therefore, (∂ 2 πi ( pi , p−i ))/(∂pi )2 < 0.
Lemma 3: Let Bri (p−i ) be the best response of EVCS i
∂ x̄ ∂ x̄ ∂ 2 x̄ ∂ ȳ ∂ ȳ ∂ 2 ȳ when the electricity price of the other EVCSs is p−i . Add η
∂pi ∂pk +(x̄−dm ) ∂pi ∂pk + ∂pi ∂pk +ȳ ∂pi ∂pk
√ . (19) to all components of p−i and let this modified electricity price
(dm −x̄)2 +ȳ2 η η
be p−i , i.e., pk = pk + η for k = i. Then, if g(di,j ) = ζ1 di,j 2
η
Moreover, (∂ 2 γ̄il ( pi , p−i ))/∂pi ∂pk = 0 means that the and η > 0, Bri (p−i ) + η > Bri (p−i ). In other words, even if
change of the boundary of the coverage area with respect to pi all other EVCSs increase their prices by η, the best response
and pk is zero, i.e., (∂ 2 x̄/∂pi ∂pk ) = (∂ 2 ȳ/∂pi ∂pk ) = 0, since x̄ of EVCS i is to increase its price by less than η.

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616 IEEE TRANSACTIONS ON SMART GRID, VOL. 6, NO. 2, MARCH 2015

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Woongsup Lee (S’07–M’13) received the B.S.
where the first inequality in (26) comes from the mono- and Ph.D. degrees in electrical engineering from
tonicity of supermodular functions5 [19] and the second the Korea Advanced Institute of Science and
Technology, Daejeon, Korea, in 2006 and 2012,
inequality is due to Lemma 3. Therefore, there is a contra- respectively.
diction in (26) and the game has a unique Nash equilibrium. Since 2014, he has been a Professor with the
The convergence of any best response algorithm with any Department of Information and Communication
Engineering, Gyeongsang National University, Jinju,
initial policy to this equilibrium can be proved based on Korea. His current research interests include cogni-
Theorems 1 and 2 in [19]. tive radio network, future wireless communication
systems, machine-to-machine networks, and smart
5 If a function is supermodular and x  y, then Br (x) ≤ Br (y) [19]. grid system.
i i

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LEE et al.: EVCSs WITH RPGs: A GAME THEORETICAL ANALYSIS 617

Lin Xiang (S’14) received the Bachelor’s and Vincent W. S. Wong (SM’07) received the
Master’s degrees in communications and information B.Sc. degree from the University of Manitoba,
systems from the Huazhong University of Science Winnipeg, MB, Canada; the M.A.Sc. degree from
and Technology, Wuhan, China, in 2009 and 2012, the University of Waterloo, Waterloo, ON, Canada;
respectively. He is currently pursuing the Ph.D. and the Ph.D. degree from the University of British
degree from the Friedrich-Alexander-University of Columbia (UBC), Vancouver, BC, Canada, in 1994,
Erlangen-Nuremberg, Erlangen, Germany. 1996, and 2000, respectively, all in electrical
From 2010 to 2011, he was an Exchange Student engineering.
at the University of Bologna, Bologna, Italy, under From 2000 to 2001, he was a Systems Engineer
the support from the Erasmus Mundus Programme. at PMC-Sierra Inc., Sunnyvale, CA, USA. He
joined the Department of Electrical and Computer
Engineering at UBC in 2002, and is currently a Professor. His current research
interests include protocol design, optimization, and resource management of
communication networks, with applications to the internet, wireless networks,
Robert Schober (S’98–M’01–SM’08–F’10) was and smart grid.
born in Neuendettelsau, Germany, in 1971. He Dr. Wong is an Associate Editor of the IEEE T RANSACTIONS ON
received the Dipl. (Univ.) and the Ph.D. degrees C OMMUNICATIONS. He has served on the editorial boards of the
in electrical engineering from the University IEEE T RANSACTIONS ON V EHICULAR T ECHNOLOGY and the Journal of
of Erlangen-Nuermberg, Erlangen, Germany, Communications and Networks. He is the Technical Program Co-Chair of
in 1997 and 2000, respectively. the IEEE SmartGridComm’14. He has served as the Symposium Co-Chair
From 2001 to 2002, he was a Post-Doctoral of the IEEE SmartGridComm’13—Communications Networks for Smart Grid
Fellow at the University of Toronto, Toronto, and Smart Metering Symposium, and EEE Globecom’13—Communication
ON, Canada, sponsored by the German Academic Software, Services, and Multimedia Application Symposium. He is the Chair
Exchange Service. Since 2002, he has been of the IEEE ComSoc Emerging Technical Sub-Committee on Smart Grid
with the University of British Columbia (UBC), Communications.
Vancouver, BC, Canada, where he is currently a Full Professor. Since
2012, he has been an Alexander von Humboldt Professor and the Chair for
Digital Communication at the Friedrich-Alexander-University of Erlangen-
Nuremberg, Erlangen. His current research interests include the broad areas
of communication theory, wireless communications, and statistical signal
processing.
Dr. Schober was the recipient of several awards, including the 2002
Heinz Maier Leibnitz Award of the German Science Foundation, the 2004
Innovations Award of the Vodafone Foundation for Research in Mobile
Communications, the 2006 UBC Killam Research Prize, the 2007 Wilhelm
Friedrich Bessel Research Award of the Alexander von Humboldt Foundation,
the 2008 Charles McDowell Award for Excellence in Research from UBC,
the 2011 Alexander von Humboldt Professorship, and the 2012 Natural
Sciences and Engineering Research Council E.W.R. Steacie Fellowship.
He was also the recipient of the Best Paper Awards from the German
Information Technology Society; the European Association for Signal,
Speech, and Image Processing; the IEEE Wireless Communucations
and Networking Conference 2012, the IEEE Globecom 2011; the IEEE
International Conference on Ultra-Wideband 2006; the International Zurich
Seminar on Broadband Communications; and the European Wireless 2000.
He is a Fellow of the Canadian Academy of Engineering and a Fellow of
the Engineering Institute of Canada. He is currently an Editor-in-Chief of
the IEEE T RANSACTIONS ON C OMMUNICATIONS.

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