Analysis from Cornwall Insight Australia shows an evident change in regulation Frequency Control Ancillary Services (FCAS) enablement from December onwards, with a 72 MW drop in FCAS volumes.
December 2019 to March 2020 average volume peaks at approximately 315MW while 12 months later it peaks at 242MW. Overall, there is an average drop of 29MWs in raise regulation FCAS procured in our analysed periods.
The below graph shows the average time of day volumes from December 2020 to March 2021 and the same period 12 months earlier. From May 2019 to December 2020 they have had a peaking profile, which on average peaks in the morning and the evening. Also included is the average 2021 Q1 Victoria’s energy and raise regulation FCAS prices to show the relationship better.
Benjamin Macey, Senior Storage Consultant at Cornwall Insight Australia, said:
“There are several reasons for the cause of this change of regulation FCAS volumes. Firstly, the National Electricity Market’s (NEM’s) frequency deviations have improved from introducing mandatory primary frequency response. An improved frequency means the average frequency error is reduced, resulting in less regulation balancing services being required.
“On top of this, AEMO has tuned the bias factor used in their area control error calculation. This tuning was implemented from 9 December 2020, and in simple terms, AEMO has changed how much raise regulation is required for a given frequency deviation.
“The contingency FCAS market volumes also experience high peaks. However, these peaks are driven by credible contingency events, such as possible lightning strikes that could trip generation or loads. For more information on this, please request a copy of our free FCAS insights webinar.
“AEMO has also identified the need for additional volumes of contingency FCAS in the future low inertia system. These increased volumes may be procured through either new, very fast contingency markets or high levels of the existing markets. Other drivers of volume changes in the future could include variability of solar and wind generation forecasts or the growth of rooftop solar. For example, as rooftop solar generation increases, it could in the future be considered the largest generator and increase raise contingency volumes.
“It is helpful to understand FCAS price forecasts are needed to estimate generator and customer costs and possible revenues for new and existing ancillary service providers.”
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Notes to Editors
For more information, please contact: Charlotte Nelson at c.nelson@cornwall-insight.com or Benjamin Macey at b.macey@cornwall-insight.com.au
To link to our website, please use: https://www.cornwall-insight.com.au.
