OR Forum - Modeling the Impacts of Electricity Tariffs on Plug-In Hybrid Electric Vehicle Charging, Costs, and Emissions

Plug-in hybrid electric vehicles (PHEVs) have been touted as a transportation technology with lower fuel costs and emissions impacts than other vehicle types. Most analyses of PHEVs assume that the power system operator can either directly or indirectly control PHEV charging to coordinate it with power system operations. This paper examines the incentives of individual drivers making charging decisions with different electricity tariffs, and it compares the cost and emissions impacts of these charging patterns to the ideal case of charging controlled by the system operator. Our results show that real-time pricing performs worst among all of the tariffs we consider, because linear prices are inherently limited in signaling efficient use of resources in a system with nonconvexities. We also show that controlling overnight PHEV charging is significantly more important than limiting midday vehicle charging.