Control of Charging of Electric Vehicles through Menu-Based Pricing

Abstract: We propose an online pricing mechanism for electric vehicle (EV) charging. A charging station decides prices for each arriving EV depending on the energy and the time within which the EV will be served (i.e. deadline). The user selects either one of the contracts by paying the prescribed price or rejects all depending on their surpluses. The charging station can serve users using renewable energy and conventional energy. Users may select longer deadlines as they may have to pay less because of the less amount of conventional energy, however, they have to wait a longer period. We consider a {\em myopic} charging station and show that there exists a pricing mechanism which jointly maximizes the social welfare and the profit of the charging station when the charging station knows the utilities of the users. However, when the charging station does not know the utilities of the users, the social welfare pricing strategy may not maximize the expected profit of the charging station and even the profit may be $0$. We propose a fixed profit pricing strategy which provides a guaranteed fixed profit to the charging station and can maximize the profit in practice. We empirically show that our proposed mechanism reduces the peak-demand and utilizes the limited charging spots in a charging station efficiently.