Australian Energy Market Operator (AEMO) has recently achieved success in the National Electricity Market (NEM) Implemented frequency performance payment (FPP) reform. This new mechanism, which will come into effect on June 8, 2025,Regarded by AEMO as an important milestone for NEM. FPP adopts a dual incentive mechanism, based on participants' preferencesReal time impact of frequency regulation provides rewards or punishments.
The core changes of reform include two key changes. The primary change is the abolition of the 'cause'. The "pay as you go" model will be replaced by a new framework based on a five minute contribution factor, which will mainly affect light Semi planned assets such as power plants and wind farms. The second major change is reflected in the characterization of frequency performance cost. In terms of collection and compensation mechanism.
FPP has created a new funding pool to charge units with poor frequency performance and instead pay for them. Provide units with excellent performance. Owners of battery energy storage systems will benefit from this, as batteries have the ability to quickly.The responsiveness and frequency performance are usually excellent. FPP aims to stimulate a frequency modulation response, while most. The revenue will flow towards battery energy storage, thereby benefiting the entire industry. Connect NEM's battery energy storage asset capital.The owner must have good frequency response capability, so it is likely that they will not change their existing operations Benefiting from the new framework.
The chain effect of reform and the transformation of the "cause pay" model of additional benefits will change the large-scale
The method of sharing costs between photovoltaic and wind farms eliminates the loopholes in the original mechanism. This will promote wind and solar powerStation owners seek more accurate prediction techniques to minimize related costs and change their focus from frequency control.The expectation of profitability in manufacturing ancillary services (FCAS) highlights the importance of precise modeling
In addition to creating new revenue for energy storage, the FPP framework is expected to attract international capital to invest in NEM storage. The project aims to enhance the reliability of the power grid in the context of the closure of coal-fired power plants and the popularization of investor power generation.The mechanism of stimulating benign frequency response has positive significance, especially in inverter based photovoltaics Against the backdrop of increased wind power and battery equipment that may affect system frequency, there is a need to control frequency deviation crucial.
Ensure the continuous applicability of the mechanism. The FPP framework is configurable and has built-in adjustment levers
AEMO can respond to future market changes and ensure continuous compliance with NEM requirements. With the advancement of energy transformation, Some technical requirements (such as frequency response speed standards) may be adjusted, but the basic calculation rules remain unchanged unchanged. AEMO can adapt to the performance differences of different assets by fine-tuning leverage. At present, this mechanism has been implemented Complete deployment and invest in financial operations.
