A Novel Market-Based Strategic CoordinationFramework for Aggregators and V2G Owners UsingBi-Level MPEC

The accelerating electrification of societies is imposing stress on power grids, particularly during peak demand. While renewable integration offers a promising pathway to address challenges, its intermittency necessitates advanced storage strategies. Vehicle-to-Grid (V2G) technology, leveraging electric vehicles (EVs) as distributed storage, provides a scalable cost-effective solution to balance supply and demand. This paper introduces a novel Stackelberg bi-level optimization framework establishing a local market between the aggregator and EV owners, enabling fair dynamic price-setting for energy exchange. Recognizing emerging trends where aggregators increasingly own distributed energy resources (DERs), the model accounts for their influence on market prices strategically. The aggregator’s commitments to the grid are embedded as prioritized constraints, ensuring reliability and hierarchical coordination with operators. Crucially, battery degradation costs for both EVs and stationary battery energy storage systems (BESS) are modeled, balancing short-term revenues and long-term health. The model incorporates key battery and charger technical limitations—state of charge (SoC), charging rate (C-rate), and depth of discharge (DOD)—along with a minimum SoC requirement to meet the EV owner’s personal mobility demand, all within a continuous framework avoiding explicit binary variables. Implemented in GAMS and validated under diverse scenarios, the model demonstrates potential for scalable V2G integration and market-driven grid flexibility.