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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
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
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612 IEEE TRANSACTIONS ON SMART GRID, VOL. 6, NO. 2, MARCH 2015
TABLE I
S IMULATION PARAMETERS
(a) (b)
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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.
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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
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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
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616 IEEE TRANSACTIONS ON SMART GRID, VOL. 6, NO. 2, MARCH 2015
Proof: Let p∗i be the best response of EVCS i when the R EFERENCES
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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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