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Smart Pricing, Smart Charging

Can time-of-use rates drive the behavior of electric vehicle owners?

Fortnightly Magazine - October 2011

set up experiments to quantify the impact of TOU prices on charging regimens.

A Model of Consumer Behavior

In order to measure the response of LEAF drivers to alternative TOU prices, we begin by formulating a model of driver charging behavior. The LEAF purchase decision reveals important aspects of driver psychology. Compared to the average utility customer, LEAF owners appear more likely to be innovators—more likely to be risk takers, affluent, cost-conscious and green. We’d expect the presence of at least some of those characteristics in LEAF owners, which would influence their charging behavior.

The LEAF can be charged during an eight-hour period if the car owner has a dedicated 240-volt socket. The charging rate is 3.3 kWh per hour. 13 Under normal driving conditions, a fully charged LEAF has a range of 100 miles, according to the manufacturer, or 73 miles, according to EPA’s estimate based on kWh per 100 miles. The range varies considerably depending on driving style, traffic, and weather conditions. Assuming the manufacturer’s claimed 100 mile range, and that drivers always discharged the battery completely, and drove 15,000 miles a year, the LEAF would be charged 12.5 times a month. But owners will rarely if ever fully discharge their LEAF before re-charging it, essentially leaving a certain amount of reserve power, just as they do with a typical gasoline fueled car. For discussion purposes, we assume they will charge the vehicle 25 times during the month based on 1,250 monthly miles traveled, with each charge lasting four hours.

To estimate the economics of charging, we use the three TOU rates shown in Figure 2. Each rate has three pricing periods: peak, mid-peak and off-peak. The peak period is from noon to 5 pm, the off-peak period from midnight to 5 am, and the mid-peak period is all other hours. These prices apply on all days of the year—including weekends, with no seasonal changes. They’re roughly revenue neutral to a flat rate of 21 cents/kWh.

Next we model customer charging behavior, conditional on the given TOU rate and the charging characteristics of the LEAF. Within each rate, however, LEAF owners have an opportunity to charge based on convenience (default charging profile) or only during those times when electricity costs are lowest (best charging profile). Saving money will motivate some drivers to charge when costs are lowest. However, some might charge when costs are lowest because they’re socially conscious and want to do the right thing. Others might do the same because they’re image conscious and want to be seen as doing the right thing. And yet others might do so because they’re intrinsically green.

Without the incentive of a TOU rate, the typical customer likely will plug in his or her car when he or she gets home from work at 6 pm, and charge it to full capacity so that it’s ready the next morning. However, other customers might find it more convenient to start their charge earlier or later, depending on their work schedules, the availability of charging stations outside the home, the presence of a control