Can an EV storage system exercise market power in an electricity market? A comparison of bi-level and single-level models

An EV aggregator managing multiple EV garages is a distributed EV storage system that can play a significant role in the electricity market of the area where it sits. We analyze the ability of such an EV storage system to exercise market power. For this, we use two models. The first one represents the EV storage system as a price maker, and the second one allows the system operator to freely operate the EV storage system for the best of the power system as a whole. Considering analytical outcomes from a stylized model and numerical simulations from a realistic case study, we found that the EV storage system has limited ability to exercise market power. Thus, the outcomes of the price-maker model and those of the model in which the system operator is in control of the EV storage system are generally similar. This is so for a number of reasons, namely, (i) the EV storage system needs to charge prior to producing (discharging), (ii) its energy/power capacity is comparatively small, (iii) it is generally located at a single node of the power system and (iv) the step-wise supply curve of most power systems is increasingly flat.