Two diagrams to help illustrate the changes coming with FPP (Frequency Performance Payments)

It’s Monday 24th March 2025, which means that:

• We’re just under 10 weeks away from the transition to the new Frequency Performance Payments process.
• Also today, the AEMO is presenting some ‘observed outcomes and insights from the first months of FPP NFO’

Within Global-Roam Pty Ltd itself, we have been making some preparations for this new change (which we’re sensing is going to be bigger than many people are currently anticipating).  But those preparations also extend to other organisations which we’re associated with (as noted in our 25-year review):

• I understand that Overwatch Energy has been fielding an increasing number of questions from their clients; and
• We understand that ETSI have been providing briefings to their client base as well.
• … and there’s been a bit of ‘cross-company’ chatter across these organisations and others (which is partly a prompt for this article).

What’s come before, on WattClarity …

Here on WattClarity we’ve already shared a number of articles, so I thought it would be useful to link in a number of them here:

• Linton Corbet has published a number of articles exploring the changes, in relation to frequency performance (including Regulation FCAS), such as:
  • On 28th February, Linton wrote three articles:
    • ‘About System Frequency’; and
    • ‘Incentivising primary frequency response’, with a useful table summarising ‘Differences, changes, and what remains’.
    • ‘Only 14 weeks to go until Frequency Performance Payments’, containing links to additional reference material.
  • On 4th March, Linton wrote about ‘Comparing Frequency Measures (Frequency, FI, FM)’.
  • On 6th March, Linton wrote:
    • about ‘Regulation prices and enablement – a historical review’
    • and, drawing from the recently released GSD2024, Linton wrote this ‘Overview of Regulation FCAS costs in 2024’
• Also, we’ve seen Jack Fox (from ETSI) publish three articles recently as follows:
  • On Thu 13th March, Jack wrote ‘An initial look at Winners and Losers from Frequency Performance Payments (FPP)’
  • On Mon 17th March, Jack identified ‘The top 10 batteries under FPP’
  • Finally (at least for now) on Wed 19th March, Jack followed with ‘Generator exposure to regulation costs under FPP’.
• Finally, following on from what Linton had done …
  • I posted briefly ‘Three headline observations, about the use of proxies for System Frequency in Frequency Control mechanisms’ on Thursday 13th March 2025; and then
  • There was discussion about all of the above when Dan and Linton presented to the CEC’s Market & Grid Directorate on Monday 17th March 2025 (i.e. a week ago today).

Two diagrams to help explain

I’m sure that some (or many?!) of our readers are faster on the uptake than me, but it took me a while for the penny to drop that the change to FPP is much more than ‘just’ a replacement to the ‘Causer Pays’ process for allocation of Regulation FCAS costs.

The penny dropped for me only a couple weeks ago (I’d rather it have dropped much sooner) following a number of the cross-company chatter sessions, and the articles noted above.  So I prepared this image to explain my understanding, and had in mind that I’d pretty it up a little before posting on WattClarity:

But I’ve been asked to post the image as soon as possible (will help in the growing number of discussions we and others are having) so I have done this above.

It’s also worth expanding on that image above as follows:

I’ve done this to clarify such things as:

• It’s a different ‘pot of money’ created effectively for payments for PFR also under the FPP changes.
  • As Jack has noted a number of times, the payments (in and out) are also linked to the Regulation FCAS price … so readers might want to go back and re-read what Jack notes as ‘an Emerging Risk?’ in his first article.
  • There are some early indications that the PFR pot of money will be larger than the Regulation FCAS pot of money.
• The scope of the FPP changes is highlighted.

… but I’d suggest that readers speak to the real experts (like Ellise at Overwatch and Jack at ETSI) to get into the real details of these changes.