On Thursday, March 23 2017 guest author Jonathon Dyson published the article ‘Let’s talk about FCAS’ – which has proved to be an article that has continued to be read, and linked to, since that time.
Along with the written explanation in that article, it also included this animation to illustrate the continuous operations of increments/decrements to supply/demand to keep frequency close to 50Hz in the NEM. (which has also been used in a variety of platforms since that time):
We worked with Jonathon to develop the GIF for illustrative purposes only – and it has proceeded since that time to be used in various platforms and presentations etc…
In terms of other resources:
1) This AEMO ‘Guide to Ancillary Services in the NEM’ from April 2015 will also be useful.
2) You might also find these articles we have remembered to tag with ‘FCAS’ of some value.
(A) FCAS Prices – hence Revenues
In the ENERGY market, revenues (or costs) will only be calculated on a 5-minute basis from the commencement of Five Minute Settlement – for all of the earlier years in the NEM, revenue was calculated on a 30-minute basis based on volume supplied (or consumed) over the full 30-minute trading period.
However in the FCAS market, revenues* have always been calculated on a 5-minute basis:
1) They are calculated based on the enablement volume multiplied by the particular commodity price; and
2) It is calculated individually for each revenue; and
3) Unlike in ENERGY (where the MLF applies) the MLF does not apply in the calculation of FCAS enablement.
4) Remember that those DUIDs enabled for provision of any of the 8 x FCAS commodities are paid for their enablement
(a) i.e. to keep themselves available to supply the required amount – whether or not the service is actually used in that 5-minute period
(b) in that way, it’s a payment for capacity (in MW over a period), not energy (MWh supplied through a period).
Note (*) that costs are calculated differently, as discussed below.
(B) FCAS Cost recovery
Costs are recovered from the FCAS services from both the Supply-Side and the Demand-Side (i.e. amongst wholesale market participants – noting that others on the grid are invisible from this standpoint) in three bundles as follows:
(8 commodities in total)
|Contingency Raise||Contingency Raise
Because it’s loss of supply that is the most likely cause of the need for Raise Contingency services, the costs of enabling FCAS Contingency Raise Services are recovered from all generators. – or, more accurately:
1) Scheduled Generators; and
2) Semi-Scheduled Generators …
3) But not Non-Scheduled Generators …
4) Or even those smaller generators that are not even registered with the AEMO and so are fully invisible.
In contrast to the separation between Contingency Raise and Lower, the costs of FCAS Regulation services (i.e. both Raise and Lower) are recovered from all Wholesale Participants using a complex ‘Causer Pays’ methodology::
1) Scheduled and Semi-Scheduled Generators; and
2) Scheduled Loads (i.e. pumping/charging for storage) and Wholesale Market Customers.
This Causer Pays method utilised the AEMO’s 4-second SCADA data, which has been utilised in the analysis behind a number of articles on WattClarity (some of which we have remembered to tag here).
|Contingency Lower||Contingency Lower
Because it’s sudden drops in consumption (e.g. trips of a large load) that is the most likely cause of the need for Lower Contingency services, the costs of enabling FCAS Contingency Lower Services are recovered from all loads – i.e. those seen by the AEMO in the wholesale market … who are:
1) wholesale Market Customers – who are:
(a) mostly Retailers (i.e. who buy from AEMO in the wholesale market and sell to end-users in the retail market).
Note – how these Retailers recover these costs from their Retail Customers is up to them.
(b) A small number of spot-exposed large energy users who buy direct from AEMO as a registered ‘Market Customer’.
2) Scheduled Loads – which again are currently only:
(a) The Scheduled charging component for batteries; and
(b) The Scheduled pumping component for pumped hydro.
Furthermore, these costs are calculated in aggregate for each FCAS Portfolio.