The economics of workplace charging

To overcome the range-anxiety problem and further shortcomings associated with electric vehicles, workplace charging (WPC) is gaining increasing attention. We propose a microeconomic model of WPC and use the approach to shed light on the incentives and barriers employees and employers face when deciding on demand for and supply of WPC. It is shown that under market conditions there is no WPC contract an employer is willing to offer and at the same time the majority of employees is willing to accept. To overcome the lack of demand or underprovision of WPC we discuss various ‘remedies’, involving subsidies to charging facility costs and adjustments in electricity tariffs or loading technologies. We find that direct subsidies to WPC facilities or subsidies combined with specific energy price policies could be a way to foster WPC provision. In contrast measures on the employee side that may help to stimulate the demand for WPC turn out to be less feasible. Hence, our results suggest that in order to promote WPC it is more promising to support employers in offering WPC contracts than to provide employees an incentive to accept WPC contracts. The study therefore gives a rationale for public initiatives being undertaken to boost WPC provision, as e.g. in the case of the US

Myopic loss aversion in the response of electric vehicle owners to the scheduling and pricing of vehicle charging

Upward expectations of future electric vehicle (EV) growth pose the question about the future load on the electricity grid. While existing literature on EV charging demand management has focused on technical aspects and considered EV-owners as utility maximizers, this study proposes a behavioural model incorporating psychological aspects relevant to EV-owners facing charging decisions and interacting with the supplier. The behavioural model represents utility maximization under myopic loss aversion (MLA) within an ultimatum game (UG) framework where the two players are the EV-owner and the electricity supplier. Experimental economics allowed testing the validity of the behavioural model by designing three experiments where a potential EV-owner faces three decisions (i.e., to postpone EV charging to off-peak periods for a discount proposed by the supplier, the amount of discount to request for off-peak charging at times decided by the supplier, and the amount of discount to accept for supplier-controlled charging) under two contract durations (i.e., short-term, long-term). Findings from the experiments show that indeed potential EV-owners perform charging decisions while being affected by MLA resulting from monetary considerations and the UG participation, and that presenting long-term contracts help potential EV-owners to curtail MLA behaviour and minimise cost even though the assumption of utility maximization is violated