Frequency Control Ancillary Services (FCAS) Market

Unlock your FCAS Value Stack

The Australian Energy Market Operator (AEMO) operates the Frequency Control Ancillary Services (FCAS) market to ensure grid stability by balancing supply and demand in real-time. For Virtual Power Plant (VPP) owners and Commercial & Industrial (C&I) prosumers, participating in the FCAS market presents an opportunity to add another revenue stream to the DER’s value stack, while supporting grid reliability.

WHAT IS FCAS?

FCAS is a set of services that respond to frequency deviations across the National Electricity Market (NEM). Maintaining frequency at 50 Hz is critical to prevent power system instability, blackouts and equipment damage. AEMO procures FCAS services from market participants capable of dynamically adjusting their energy output or demand in response to frequency deviations.

FCAS MARKET CATEGORIES

There are six distinct markets that providers can participate in.

Regulation FCAS (Raise Market & Lower Market):

Participants continuously adjust power output to maintain frequency within acceptable limits. Assets are controlled directly by AEMO’s Automatic Generation Control system. Providers are compensated either through multi-year contracts or through a cost-recovery model.

Contingency FCAS (Very Fast, Fast, Slow & Delayed Markets):

Participants in the contingency markets respond to major disturbances, such as generator or network failures. Participants bid DER capacity into the Contingency market. The DER must generate (Raise) or consume (Lower) power within time windows that vary per market as indicated in the table.

FCAS RESPONSE TIMES

Each market specifies the time within which an asset must respond when a frequency deviation is detected.

To participate in the FCAS market, you must have an asset that can serve the needs of a specific FCAS market. Here are some common asset types:

UTILITY BATTERY STORAGE PLANTS

These provide Fast and Very Fast frequency response services in contingency and regulation FCAS markets.

VIRTUAL POWER PLANTS (VPPs)

VPPs often aggregate residential solar + battery systems, enabling smaller batteries to contribute to FCAS. VPPs typically participate in the Fast and Very Fast contingency markets.

GRID-INTERACTIVE INVERTERS & SMART SOLAR PV SYSTEMS

Some advanced solar inverters with grid-forming capabilities can also participate in the FCAS market.

These assets are typically used in the Fast and Very Fast markets.

COMMERCIAL & INDUSTRIAL LOADS

Some industrial and commercial customers can adjust loads in response to frequency deviations. Participation is via demand-side aggregators.

C&I loads are good candidates for the Slow or Delayed markets since they may take some time to ramp down.

How FCAS Works

This diagram also shows the different equipment needed to participate in the FCAS Market. It also illustrates the sequence of events that occur during an FCAS contingency event.

Participating in FCAS markets is complex

There are several factors that make the FCAS market complex:

MEASUREMENT & VERIFICATION

Compliance with AEMO’s metering and verification requirements is essential for participation. With each FCAS event, participants must submit a Market Ancillary Service Specification (MASS) Compliance report with voltage samples (typically 50 ms or less) that proves they delivered to the specification of the market they bid into.

HOW TO SUCCEED

Choose a metering & reporting platform that reliably capture the data, process it and create the compliance report.

REVENUE UNCERTAINTY

FCAS prices fluctuate based on supply and demand, requiring optimization strategies to maximize returns. There are also dependencies between the FCAS and energy dispatch market that can create significant, unpredictable price swings due to the causer-pays clause.

HOW TO SUCCEED

Choose a proven monitoring & control platform with accurate price forecasting & market intelligence to optimize revenue while reducing exposure to penalties and costs.

SITE COMPLEXITY

DERs located at a commercial or industrial site may be part of multiple energy objectives in a value stack . For example, consider a site with battery storage, EV fleet chargers and solar panels. The site may want to optimize self-consumption and participate in the energy dispatch and FCAS market while at the same time, ensuring that the EV chargers are always available for maximum charging when any connected EVs are below 50% of charge. In this scenario, an advanced control system is required to ensure that correct amount of battery storage is bid into the FCAS market without putting the other objectives at risk.

HOW TO SUCCEED

Choose an advanced energy management system capable of real-time decision-making, predictive analytics, and dynamic load balancing to optimize performance across the multiple operational priorities.

The Bottom Line

An advanced energy management system will help ensure you maximize your revenue in the FCAS market.

Scenarios

Let’s look at some scenarios that show how an energy management system can optimize FCAS Market revenue.

INDUSTRIAL MANUFACTURING PLANT

A manufacturing plant operates several large electric furnaces and compressors, consuming significant power from the grid. By installing an energy management system (EMS), the plant monitors and controls these heavy loads. In the event of an FCAS contingency (such as the sudden loss of a large generation unit elsewhere in the grid), the EMS instantaneously reduces electricity consumption by temporarily scaling back non-critical furnace operations.

Every 5 minutes, the EMS bids the plant’s flexible load capacity into the FCAS market. When a contingency event occurs, the plant is dispatched automatically, providing rapid demand response by immediately decreasing load, thus stabilizing grid frequency. Through participation in this market, the plant receives substantial additional revenue streams, significantly offsetting operational costs.

The EMS continuously optimizes the bids by analyzing real-time FCAS pricing and plant load forecasts. This maximizes revenues, ensuring the plant responds only during financially beneficial intervals, increasing overall profitability while supporting grid resilience.

UTILITY-SCALE BATTERY ENERGY STORAGE SYSTEM (BESS)

A utility-scale Battery Energy Storage System, located near a wind farm, uses an advanced EMS to enhance revenues from participation in the contingency FCAS market. The EMS intelligently manages charging and discharging patterns based on forecasts of renewable generation, real-time grid conditions, and FCAS prices, ensuring maximum availability for contingency response events.

When a sudden drop in grid frequency occurs, the EMS instantly dispatches stored energy which injects power into the grid. This rapid frequency support is highly valued in the contingency FCAS market and commands premium compensation, significantly boosting the battery system’s revenue stream.

In addition to immediate dispatch, the EMS continuously optimizes battery cycling strategies, preserving battery lifespan and efficiency while maximizing FCAS participation. As a result, the battery system achieves higher returns on investment, while enhancing grid stability.

LARGE DATA CENTER FACILITY

A large commercial data centre, consuming substantial electricity for cooling and IT infrastructure, uses an EMS for onsite energy efficiency and to participate in the FCAS market. Through real-time monitoring and control of cooling systems, backup generators, and energy storage units, the EMS identifies flexible load and generation capacities suitable for quick response to contingency events.

When the grid frequency experiences sudden drops due to unexpected outages elsewhere, the EMS activates load shifting measures, such as temporarily adjusting cooling system setpoints or quickly initiating backup generation. This reduces the facility’s draw from the grid, promptly contributing to frequency stabilization efforts.

The EMS continuously analyzes grid conditions and FCAS market signals, dynamically adjusting bids and participation strategies. This ensures optimal financial returns from FCAS payments, enabling the data centre to turn its existing infrastructure into a profitable asset, while contributing to the reliability and resilience of the wider electricity grid.

VIRTUAL POWER PLANT (VPP)

A Virtual Power Plant (VPP) aggregates multiple residential and commercial sites equipped with rooftop solar photovoltaic (PV) systems and battery energy storage systems (BESS). Using an energy management system (EMS), the VPP coordinates hundreds of distributed assets to collectively participate in the FCAS market. By continuously forecasting generation, load, and storage capacity across all sites, the EMS determines available flexible capacity for bidding into the FCAS market.

When a contingency event occurs, batteries across the VPP discharge stored energy into the grid as they have been programmed to do by the EMS. Simultaneously, the EMS may also adjust solar inverter outputs where possible to increase the overall FCAS contribution. This approach significantly boosts the VPP’s revenues.

The EMS dynamically updates its FCAS strategy by continuously monitoring site loads, battery state-of-charge and solar output forecasts. This maximizes revenue for individual asset owners within the VPP while maintaining site reliability and asset health.

Solutions

  • ION Power meters are the most accurate & intelligent power meters available, measuring thousands of power quality and energy variables and transmitting them to the software system.

  • For non-critical loads or circuits, we supply basic meters that provide all the necessary measurements to support energy and electrification management

Electrical Metering

EnergyX® Platform

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