FCAS Cost Recovery

Costs are added up for the FCAS services in three separate bundles:

1)   Contingency Raise
2)  Regulation (i.e. both Raise and Lower)
3)  Contingency Lower

… taking into account both Regional services and Global services.

These three bundles are apportioned differently in each of these bundles across wholesale Market Participants (noting that others on the grid are invisible from this standpoint) as follows:


FCAS Service

(10 commodities in total)

Contingency Raise Contingency Raise
5 minute

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)  Bi-Directional Units, when discharging

4)  But not Non-Scheduled Generators …

5)  Or even those smaller generators that are not even registered with the AEMO and so are fully invisible.

Contingency Raise
60 seconds
Contingency Raise
6 seconds
Contingency Raise
1 second
(i.e. the FFR market)
Regulation Regulation

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 procedure that follows the principle of ‘the causer of frequency deviations should pay’.

This method is changing over time, so has been described in more detail on this linked page.

Contingency Lower Contingency Lower
1 seconds
(i.e. the FFR market)

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.

3)  Bi-Directional units when charging

Contingency Lower
6 seconds
Contingency Lower
60 seconds
Contingency Lower
5 minute


With respect to the table above, note in particular:


(A)  The changing methodology for recovery of Regulation FCAS costs

In contrast, the costs of FCAS Regulation services are recovered from all wholesale participants (i.e. both Loads and Generators) using a methodology that pursues a ’causer pays’ approach.

Even this approach has changed over time, as described further on this page.


(B)  FCAS portfolios

Furthermore, these costs are calculated in aggregate for each FCAS Portfolio.

These FCAS portfolios are not the same as the Registered Participant, and they are also not the same as what a layperson might think of as a ‘portfolio’.