Ancillary Services

Ancillary services are those services used by AEMO to manage the power system safely, securely and reliably. These services maintain key technical characteristics of the system, including standards for frequency, voltage, network loading and system restart processes.

AEMO operates 8 separate markets for the delivery of frequency control ancillary services (FCAS) and purchases network control ancillary services (NCAS) and system restart ancillary services (SRAS) under agreements with service providers.

Following the AEMC’s determination of the Network Support and Control Ancillary Services (NSCAS) Rule 2011 No.2, TNSPs have been given primary responsibility for meeting NSCAS demand while AEMO’s role from 5 April 2012 will be to act as NSCAS procurer of last resort.

FCAS providers bid their services into the FCAS markets in a similar way to how generators bid into the energy market. The FCAS markets were introduced to the NEM in September 2001 and provide simpler, more dynamic and transparent arrangements that have further increased competition and contributed to improved overall market efficiency.

Payments for ancillary services include payments for availability and for the delivery of the services. The market participant or participants responsible for a situation that requires ancillary services pay for individual services whenever regulation FCAS are needed to automatically raise or lower frequency to within the normal operating band of 49.9 Hertz to 50.1 Hertz. NCAS are primarily used to:

• Control the voltage at different points of the electrical network to within the prescribed standards; or

• Control the power flow on network elements to within the physical limitations of those elements

SRAS are reserved for contingency situations in which there has been a major supply disruption or where the electrical system must be restarted.

Ancillary service costs are dependent upon the amount of service required at any particular time and, as these amounts can vary significantly from period to period, costs will also vary.

For further more detailed information please see our Guide to Ancillary Services in the National Electricity Market.