Frequency Control Ancillary Services

  • Energy storage and flexibility

    R1 and L1 revving up the BESS revenues

    In our ‘The VFF… Very Fast and Financially rewarding market so far’ Chart of the week, the two new contingency markets, the Very Fast raise contingency FCAS market and the Very Fast lower contingency FCAS, were analysed and demonstrated the high participation of big batteries along with VPPs and DERs....

  • Commercial and market outlook

    The Knights who say FI: FI growing despite forecast systems popularity

    Although not quite as thrilling for some as the search for the Holy Grail, finding a way to minimise causer pays costs continues to take the focus of both wind and solar farms. Using the FI value through self-forecast systems[1] has become increasingly prevalent for these assets in an effort...

  • Commercial and market outlook

    How much Raise FCAS is needed as inertia reduces?

    The Step Change scenario in the 2022 Integrated System Plan (ISP) is targeting 83% renewable energy generation in the NEM by 2030-31. By then, around 79GW of VRE resources (wind, utility solar, and distributed PV) is expected to have been installed to help replace the 14GW capacity of synchronous generation...

  • Commercial and market outlook

    Spot the spread: Are current battery revenues enough to encourage further investment?

    In AEMO’s ‘Step Change’ scenario, it was estimated that storage capacity in the NEM would need to increase by a factor of 30 between 2022 and 2050 to support a grid transformation that limits temperature rises below 2 degrees. This represents about 13GW of new storage capacity by 2030 and...

  • Commercial and market outlook

    Feast or famine? FCAS costs in South Australia

    Frequency Control Ancillary Service (FCAS) prices are highly volatile, at times resulting in short periods of extremely high FCAS cost. Three such events in recent history are the South Australian (SA) islanding events in November 2019, February 2020, and November 2022. During these events, FCAS costs in SA totalled $16...

  • Low carbon generation

    Australian Chart of the week | VRE pays more as PFR helps reduce coal FCAS costs

    In our previous ‘Chart of the week’ in November 2020, we reviewed the increasing percentage of causer pays cost that solar generators bear due to their generation profiles and how this results in them paying significantly more of the causer pays cost as a ratio of the generation they provide. More than...

  • Low carbon generation

    Australian Chart of the week | Peak raise regulation FCAS volumes drop by 72MWs

    It is helpful to understand Frequency Control Ancillary Services (FCAS) as FCAS price forecasts are needed to estimate generator and customer costs, as well as possible revenues for new and existing ancillary service providers. AEMO procures regulation FCAS to balance frequency during normal operation. From May 2019, AEMO has procured...

  • Low carbon generation

    Australian Chart of the week | “I feel the earth move under my feet”: from high to lows

    We have seen a dramatic shift in FCAS price fortunes over the past year or so, going from all-time highs of ~$229.3mn in Q1 of 2020 (due to the separation event) to only ~$40.1mn in Q1 2021. Since 2019 we have also seen regulation raise prices decline from robust prices...

  • Low carbon generation

    Australian Chart of the week | One of these things is not like the others: FCAS separation value

    Energy storage has been at the forefront of conversations resulting from AEMO’s newly released 2020 Integrated System Plan (ISP). The ISP states that 6-19GW of dispatchable resources are needed to support more than 26GW of new renewables. So where will battery energy storage fit in and where will they make...

  • Energy storage and flexibility

    Australian Chart of the week | A little respect (just a little bit): FCAS costs hit solar hardest

    Wholesale energy prices may have hit some of their lowest prices in years, but the total cost of Frequency Control Ancillary Services (FCAS) skyrocketed in Q1 resulting from the South Australian Islanding event. The islanding event threw back into the spotlight the importance of understanding the costs associated with FCAS...

  • Energy storage and flexibility

    Australian Chart of the week | The more things change, the more they stay the same…

    This Chart of the week focuses on the comparatively small but important Frequency Control Ancillary Services (FCAS) in the NEM. FCAS in terms of total dollars is minuscule in comparison to the total energy bill. While the proportion may appear small, its function is key to maintaining a secure operating...

  • Energy storage and flexibility

    Australian Chart of the week | Where in the market are battery storage revenues?

    Storage is seen as a technology that will solve many of the issues on the grid. This includes providing peaking energy, correcting frequency events and providing network support. In this Chart of the week, we take a look at four battery storage systems currently active in the NEM. These are...