IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v198y2025ics0301421525000035.html
   My bibliography  Save this article

Policy and pricing tools to incentivize distributed electric vehicle-to-grid charging control

Author

Listed:
  • Andersen, Daniel
  • Powell, Siobhan

Abstract

Flexible electric vehicle (EV) charging could benefit the electricity system and help integrate renewables, if given the right incentives. Bidirectional vehicle-to-grid (V2G) technology increases EV flexibility and could increase those benefits. However, the business case for small-scale V2G is unclear, limiting widespread deployment. Here, we assess the impacts of different time-of-use electricity tariffs and compare three policymaker tools to improve profitability for V2G aggregators: regulating the reimbursement of network charges and taxes on discharged energy, subsidizing new stations, and increasing the spread between low and high time-of-use prices. We use an agent-based EV model in a case-study of workplace charging in Switzerland. We model the aggregator’s maximization of V2G revenues over electricity, hardware, installation, and operating costs as a mixed-integer linear program. We find that different tariffs better support renewable integration or reduce peak demand. Profitability is highly sensitive to the cost of V2G stations and the difference between the lowest charging and highest discharging prices. Some subsidies will be needed until V2G station costs fall at least below 8706 ± 942 CHF. Policymakers could regulate reimbursement of network charges or taxes for discharged energy or stretch tariff price spreads to support deployment of distributed V2G.

Suggested Citation

  • Andersen, Daniel & Powell, Siobhan, 2025. "Policy and pricing tools to incentivize distributed electric vehicle-to-grid charging control," Energy Policy, Elsevier, vol. 198(C).
    • Handle: RePEc:eee:enepol:v:198:y:2025:i:c:s0301421525000035
    DOI: 10.1016/j.enpol.2025.114496
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421525000035
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2025.114496?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gschwendtner, Christine & Sinsel, Simon R. & Stephan, Annegret, 2021. "Vehicle-to-X (V2X) implementation: An overview of predominate trial configurations and technical, social and regulatory challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).
    2. Siobhan Powell & Gustavo Vianna Cezar & Liang Min & Inês M. L. Azevedo & Ram Rajagopal, 2022. "Charging infrastructure access and operation to reduce the grid impacts of deep electric vehicle adoption," Nature Energy, Nature, vol. 7(10), pages 932-945, October.
    3. Gough, Rebecca & Dickerson, Charles & Rowley, Paul & Walsh, Chris, 2017. "Vehicle-to-grid feasibility: A techno-economic analysis of EV-based energy storage," Applied Energy, Elsevier, vol. 192(C), pages 12-23.
    4. Sovacool, Benjamin K. & Kester, Johannes & Noel, Lance & Zarazua de Rubens, Gerardo, 2020. "Actors, business models, and innovation activity systems for vehicle-to-grid (V2G) technology: A comprehensive review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 131(C).
    5. Knezović, Katarina & Marinelli, Mattia & Zecchino, Antonio & Andersen, Peter Bach & Traeholt, Chresten, 2017. "Supporting involvement of electric vehicles in distribution grids: Lowering the barriers for a proactive integration," Energy, Elsevier, vol. 134(C), pages 458-468.
    6. Loris Di Natale & Luca Funk & Martin Rüdisüli & Bratislav Svetozarevic & Giacomo Pareschi & Philipp Heer & Giovanni Sansavini, 2021. "The Potential of Vehicle-to-Grid to Support the Energy Transition: A Case Study on Switzerland," Energies, MDPI, vol. 14(16), pages 1-24, August.
    7. Rahman, Md Mustafizur & Gemechu, Eskinder & Oni, Abayomi Olufemi & Kumar, Amit, 2023. "The development of a techno-economic model for assessment of cost of energy storage for vehicle-to-grid applications in a cold climate," Energy, Elsevier, vol. 262(PA).
    8. Thompson, Andrew W. & Perez, Yannick, 2020. "Vehicle-to-Everything (V2X) energy services, value streams, and regulatory policy implications," Energy Policy, Elsevier, vol. 137(C).
    9. Tarroja, Brian & Hittinger, Eric, 2021. "The value of consumer acceptance of controlled electric vehicle charging in a decarbonizing grid: The case of California," Energy, Elsevier, vol. 229(C).
    10. Noori, Mehdi & Zhao, Yang & Onat, Nuri C. & Gardner, Stephanie & Tatari, Omer, 2016. "Light-duty electric vehicles to improve the integrity of the electricity grid through Vehicle-to-Grid technology: Analysis of regional net revenue and emissions savings," Applied Energy, Elsevier, vol. 168(C), pages 146-158.
    11. Florian van Triel & Timothy E. Lipman, 2020. "Modeling the Future California Electricity Grid and Renewable Energy Integration with Electric Vehicles," Energies, MDPI, vol. 13(20), pages 1-20, October.
    12. Gupta, Ruchi & Pena-Bello, Alejandro & Streicher, Kai Nino & Roduner, Cattia & Farhat, Yamshid & Thöni, David & Patel, Martin Kumar & Parra, David, 2021. "Spatial analysis of distribution grid capacity and costs to enable massive deployment of PV, electric mobility and electric heating," Applied Energy, Elsevier, vol. 287(C).
    13. Panos, Evangelos & Kober, Tom & Wokaun, Alexander, 2019. "Long term evaluation of electric storage technologies vs alternative flexibility options for the Swiss energy system," Applied Energy, Elsevier, vol. 252(C), pages 1-1.
    14. Pearre, Nathaniel S. & Ribberink, Hajo, 2019. "Review of research on V2X technologies, strategies, and operations," Renewable and Sustainable Energy Reviews, Elsevier, vol. 105(C), pages 61-70.
    15. Fleschutz, Markus & Bohlayer, Markus & Braun, Marco & Henze, Gregor & Murphy, Michael D., 2021. "The effect of price-based demand response on carbon emissions in European electricity markets: The importance of adequate carbon prices," Applied Energy, Elsevier, vol. 295(C).
    16. Borne, Olivier & Perez, Yannick & Petit, Marc, 2018. "Market integration or bids granularity to enhance flexibility provision by batteries of electric vehicles," Energy Policy, Elsevier, vol. 119(C), pages 140-148.
    17. Signer, Tim & Baumgartner, Nora & Ruppert, Manuel & Sandmeier, Thorben & Fichtner, Wolf, 2024. "Modeling V2G spot market trading: The impact of charging tariffs on economic viability," Energy Policy, Elsevier, vol. 189(C).
    18. Gunkel, Philipp Andreas & Bergaentzlé, Claire & Græsted Jensen, Ida & Scheller, Fabian, 2020. "From passive to active: Flexibility from electric vehicles in the context of transmission system development," Applied Energy, Elsevier, vol. 277(C).
    19. Blumberg, Gerald & Broll, Roland & Weber, Christoph, 2022. "The impact of electric vehicles on the future European electricity system – A scenario analysis," Energy Policy, Elsevier, vol. 161(C).
    20. Kester, Johannes & Noel, Lance & Zarazua de Rubens, Gerardo & Sovacool, Benjamin K., 2018. "Promoting Vehicle to Grid (V2G) in the Nordic region: Expert advice on policy mechanisms for accelerated diffusion," Energy Policy, Elsevier, vol. 116(C), pages 422-432.
    21. Philipp Andreas Gunkel & Claire Bergaentzl'e & Ida Gr{ae}sted Jensen & Fabian Scheller, 2020. "From passive to active: Flexibility from electric vehicles in the context of transmission system development," Papers 2011.05830, arXiv.org.
    22. Heilmann, C. & Friedl, G., 2021. "Factors influencing the economic success of grid-to-vehicle and vehicle-to-grid applications—A review and meta-analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).
    23. Englberger, Stefan & Abo Gamra, Kareem & Tepe, Benedikt & Schreiber, Michael & Jossen, Andreas & Hesse, Holger, 2021. "Electric vehicle multi-use: Optimizing multiple value streams using mobile storage systems in a vehicle-to-grid context," Applied Energy, Elsevier, vol. 304(C).
    24. Noel, Lance & Zarazua de Rubens, Gerardo & Kester, Johannes & Sovacool, Benjamin K., 2019. "Navigating expert skepticism and consumer distrust: Rethinking the barriers to vehicle-to-grid (V2G) in the Nordic region," Transport Policy, Elsevier, vol. 76(C), pages 67-77.
    25. Lukas Lanz & Bessie Noll & Tobias S. Schmidt & Bjarne Steffen, 2022. "Comparing the levelized cost of electric vehicle charging options in Europe," Nature Communications, Nature, vol. 13(1), pages 1-13, December.
    26. Yanyan Xu & Serdar Çolak & Emre C. Kara & Scott J. Moura & Marta C. González, 2018. "Planning for electric vehicle needs by coupling charging profiles with urban mobility," Nature Energy, Nature, vol. 3(6), pages 484-493, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nagel, Niels Oliver & Jåstad, Eirik Ogner & Martinsen, Thomas, 2024. "The grid benefits of vehicle-to-grid in Norway and Denmark: An analysis of home- and public parking potentials," Energy, Elsevier, vol. 293(C).
    2. Sabadini, Felipe & Madlener, Reinhard, 2025. "Does taxation hamper the vehicle-to-grid business case? Empirical evidence from Germany," Applied Energy, Elsevier, vol. 381(C).
    3. Brodnicke, Linda & Kachirayil, Febin & Gabrielli, Paolo & Sansavini, Giovanni & McKenna, Russell, 2025. "Transforming decentralized energy systems: Flexible EV charging and its impact across urbanization degrees," Applied Energy, Elsevier, vol. 384(C).
    4. Gschwendtner, Christine & Sinsel, Simon R. & Stephan, Annegret, 2021. "Vehicle-to-X (V2X) implementation: An overview of predominate trial configurations and technical, social and regulatory challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).
    5. Gonzalez Venegas, Felipe & Petit, Marc & Perez, Yannick, 2021. "Active integration of electric vehicles into distribution grids: Barriers and frameworks for flexibility services," Renewable and Sustainable Energy Reviews, Elsevier, vol. 145(C).
    6. Signer, Tim & Baumgartner, Nora & Ruppert, Manuel & Sandmeier, Thorben & Fichtner, Wolf, 2024. "Modeling V2G spot market trading: The impact of charging tariffs on economic viability," Energy Policy, Elsevier, vol. 189(C).
    7. Chen, Ching-Fu & Lai, Ching-Ming, 2024. "Understanding the acceptance of vehicle-to-grid (V2G) services: Evidence from Taiwan," Transport Policy, Elsevier, vol. 159(C), pages 230-240.
    8. Anderson, Osten & Yu, Nanpeng & Hong, Wanshi & Wang, Bin, 2025. "Impact of flexible and bidirectional charging in medium- and heavy-duty trucks on California’s decarbonization pathway," Applied Energy, Elsevier, vol. 377(PB).
    9. Krzysztof Zagrajek & Józef Paska & Łukasz Sosnowski & Konrad Gobosz & Konrad Wróblewski, 2021. "Framework for the Introduction of Vehicle-to-Grid Technology into the Polish Electricity Market," Energies, MDPI, vol. 14(12), pages 1-30, June.
    10. Bogdanov, Dmitrii & Breyer, Christian, 2024. "Role of smart charging of electric vehicles and vehicle-to-grid in integrated renewables-based energy systems on country level," Energy, Elsevier, vol. 301(C).
    11. Østergaard, P.A. & Lund, H. & Thellufsen, J.Z. & Sorknæs, P. & Mathiesen, B.V., 2022. "Review and validation of EnergyPLAN," Renewable and Sustainable Energy Reviews, Elsevier, vol. 168(C).
    12. Rishabh Ghotge & Koen Philippe Nijssen & Jan Anne Annema & Zofia Lukszo, 2022. "Use before You Choose: What Do EV Drivers Think about V2G after Experiencing It?," Energies, MDPI, vol. 15(13), pages 1-22, July.
    13. Bergaentzle, Claire & Gunkel, Philipp Andreas, 2022. "Cross-sector flexibility, storage investment and the integration of renewables: Capturing the impacts of grid tariffs," Energy Policy, Elsevier, vol. 164(C).
    14. Freitas Gomes, Icaro Silvestre & Perez, Yannick & Suomalainen, Emilia, 2020. "Coupling small batteries and PV generation: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 126(C).
    15. Kumar, Gokula Manikandan Senthil & Guo, Xinman & Zhou, Shijie & Luo, Haojie & Wu, Qi & Liu, Yulin & Dou, Zhenyu & Pan, Kai & Xu, Yang & Yang, Hongxing & Cao, Sunliang, 2025. "State-of-the-art review of smart energy management systems for supporting zero-emission electric vehicles with X2V and V2X interactions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 208(C).
    16. Krzysztof Zagrajek & Mariusz Kłos & Desire D. Rasolomampionona & Mirosław Lewandowski & Karol Pawlak, 2023. "The Novel Approach of Using Electric Vehicles as a Resource to Mitigate the Negative Effects of Power Rationing on Non-Residential Buildings," Energies, MDPI, vol. 17(1), pages 1-36, December.
    17. Hu, Yang & Bahamonde-Birke, Francisco J. & Ettema, Dick, 2025. "Vehicle-to-grid, why not? An interview with battery electric vehicle users with various driving patterns in Utrecht, the Netherlands," Transport Policy, Elsevier, vol. 164(C), pages 231-240.
    18. Thompson, Andrew W. & Perez, Yannick, 2020. "Vehicle-to-Everything (V2X) energy services, value streams, and regulatory policy implications," Energy Policy, Elsevier, vol. 137(C).
    19. Li, Xiaohui & Wang, Zhenpo & Zhang, Lei & Sun, Fengchun & Cui, Dingsong & Hecht, Christopher & Figgener, Jan & Sauer, Dirk Uwe, 2023. "Electric vehicle behavior modeling and applications in vehicle-grid integration: An overview," Energy, Elsevier, vol. 268(C).
    20. Englberger, Stefan & Abo Gamra, Kareem & Tepe, Benedikt & Schreiber, Michael & Jossen, Andreas & Hesse, Holger, 2021. "Electric vehicle multi-use: Optimizing multiple value streams using mobile storage systems in a vehicle-to-grid context," Applied Energy, Elsevier, vol. 304(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:198:y:2025:i:c:s0301421525000035. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.