Quick review of a spike in FCAS Prices in South Australia on Tuesday 18th April 2017 – leading to Administered Pricing for Raise Regulation Services.
The South Australian Blackout of 28th September 2016 is not as simple as it looks.
Generators used to consider the Australian National Electricity Market (NEM) FCAS causers pays factors (CPF), used to allocate FCAS regulation costs across the market, as an obscure and unimportant technically challenging curiosity. Since 2014, the cost of FCAS regulation services for generators has increased from just under $5 million per year to greater than $60 million for 2016 and now has the attention of all of the generators, especially if their portfolio includes generation assets in regions with a lack of FCAS regulation providers and high prices such as South Australia.
The National Electricity Market (NEM) is designed to operate at 50 Hz. Frequency deviation occurs when generation and load are mismatched. It is important in a lightly meshed and long network such as the NEM to maintain tight frequency control and that frequency response is available throughout the network.
Ancillary Services Matter! No longer just realm of electrical engineer or energy trading boffins, ancillary services (and particularly Frequency Control Ancillary Services or FCAS which will concentrate on today) have become front and centre in so many ways that barely a day goes by without market observers referring to grid stability, inertia or frequency management.
AEMO issued a Market Notice this morning for an LOR2 “Low Reserve Condition” in South Australia. Here’s my sense of some of what’s happening.
My curiosity was piqued today when I saw the AEMO had lobbed in a Market Notice titled “Zero Regulation Dispatched”.