Regime-switching based vehicle-to-building operation against electricity price spikes

Electricity price may present very large spikes due to imbalance between generation and demand, especially during heavily loaded periods. Such peak price may incur significant cost to building operation. With the vehicle-to-building (V2B) technology, electric vehicle battery can be used as temporal energy source for the building load for a short period, which leads to a possible solution for reducing the energy cost during peak-price periods. In this paper, the problem of reducing the energy cost due to the peak price is approached from the prospective of risk management. A regime-switching based risk management scheme is proposed for the V2B operation based on the availability of electric vehicles (EV) plugged in the parking lots attached to the building. In the low risk regime, the objective is to minimize the EV charging cost. While in the high risk regime, the objective is to reduce the potentially high energy cost due the peak price via the power stored in EV batteries. Based on Markov regime-switching model, the operation minimizes the conditional value at risk involved. Simulation results show that the proposed framework can greatly reduce the energy cost against the electricity peak prices. [Display omitted] •Risk management strategy for vehicle-to-building operation against electricity price spikes•Use a Markov regime switching scheme to determine the transition between normal and spike price•Minimize energy cost due to electricity price spikes with a CVaR based risk management strategy•Energy management performance under normal price range little affected•Simulation study shows significant energy cost saving over rule based and non-V2B operations.