Optimal decision on contract size for V2G aggregator regarding frequency regulation

For V2G frequency regulation, an aggregator is essentially required to join the regulation market by gathering small-scale vehicle power. In this paper, we propose a method for an analytic estimation of the probability distribution regarding the procured power capacity (PPC). Using the obtained result, an optimal contract size is sought considering several possible types of penalty, each of which reflects the real world constraints. For each case, a cost function representing the revenue of the aggregator is developed as well. With the cost functions, an optimal contract size can be determined where the cost function yields a maximum value. Finally, simulations are provided to illustrate the validity of the proposed method.