Integrated pricing of roads and electricity enabled by wireless power transfer

•This paper explores integrated pricing of electricity and roads.•Wireless power transfer electrifies roads to be charging infrastructures.•First- and second-best pricing models are proposed for electricity and roads.•Numerical examples are presented to demonstrate the models.

This paper explores integrated pricing of electricity and roads enabled by wireless power transfer technology. We envision that high-power, high-efficiency wireless power transfer technologies are mature in the near future, which electrify roads to be charging infrastructures. The prices of electricity at electrified roads will affect electric vehicles’ route choices while the energy requirement of those vehicles will in return affect the operations of the power network and thus the prices of electricity. To determine the optimal prices of electricity and roads to maximize social welfare, first- and second-best pricing models are proposed under different authoritarian regimes. More specifically, assuming that a government agency manages both transportation and power systems, we develop the first-best pricing model, based on which a marginal-cost pricing scheme is derived. The second-best pricing model is proposed if the agency participates in a competitive wholesale power market while being able to impose tolls on electrified roads. The toll design is formulated as a mathematical program with complementarity constraints, and is solved by a manifold suboptimization algorithm. Numerical examples are presented to offer insights on integrated pricing of roads and electricity and demonstrate its effectiveness on improving social welfare.