Optimal Two-Level Charging Station Pricing Considering Electric Vehicle User Price Elasticity

Charging stations (CSs) play an important role in supplying electric vehicle (EV) charging energy. Previous works focus on optimal CS pricing strategies to respond to market or system signals. However, the price elasticity of EV users in selecting different CSs has rarely been considered. As the density of CSs increases, different CSs must compete to obtain their market share. In this work, a novel two-level charging station pricing method is proposed. In the upper level, the EV user price elasticity is explicitly considered to attract EV users. In the lower level, incentives are provided in response to energy price fluctuations. The formulated model contains trilinear and bilinear terms that introduce non-convexity to the problem. To handle the trilinear and bilinear terms, a solution methodology is developed by using the Big M theory and McCormick envelopes. The superiority of the proposed methods is verified through case studies using real-world price data.