Frequency Performance Payments project commences non-financial operation, 9th December 2024

AEMO’s Frequency Performance Payments (FPP) project has commenced in production today under “non-financial operation” (NFO). This is a trial period whereby market participants will start receiving data generated by the new FPP engine to allow a window of time to become familiar with the operation of the scheme with real data before financial operation commences, expected to be mid next year.

This FPP project was actually agreed on back in 2022 with the AEMC’s rule change that also introduced Primary Frequency Response (PFR). Paul wrote about that rule change at the time, noting “incentive arrangements” were a large part of the rule. It’s those “incentive arrangements” that are now known as FPP.

In a nutshell, FPP is the successor to the currently operating scheme for allocating Regulation FCAS costs, known as Causer Pays. It’s a new way of allocating incentive payments to generators deemed to have been “helpful” in maintaining system frequency, funded by penalties for those deemed “unhelpful”, across a five minute dispatch interval with respect to the unit’s target and actual output for that interval.

The majority of new data to support the scheme will be provided in new MMS tables (mostly prefixed with “FPP_”) and will mostly participant-private in real time, but available for all public next day (4am). Some aggregated data will also be publicly available in near-realtime, including new 4-second resolution frequency data in FPP_REGION_FREQ_MEASURE, available as soon as the FPP run has completed.

AEMO has a number of excellent FAQs and technical documents related to both the NFO that goes live today and also the timeline for full Financial Operation go live, scheduled at this stage for 8 June 2025:

• AEMO’s overall project page outlining the reform here: https://aemo.com.au/initiatives/major-programs/nem-reform-program/nem-reform-program-initiatives/frequency-performance-payments-project
• The “NFO Go Live Plan” (pdf)
• FPP Frequently Asked Questions (pdf)

It’s important to note the new reports commencing today are not the full set of FPP data, there will also be additional P5MIN and Predispatch forecasts available in the coming months during NFO; these are expected to commence in mid-January. To avoid any doubt, the current Causer Pays arrangements for the recovery of Regulation FCAS will continue in parallel until 8 July 2025, throughout the FPP non financial operation period.

We here at Global-Roam along with many other market observers will be interested to unpack the new data as time permits over the next few months.