Power plants and transmission network lines suddenly fail from time to time. When they do, it impacts the grid’s frequency, and the system needs resources that can respond quickly to prevent cascading power failures.
Businesses enrolled in our VPP are paid to respond automatically to deviations in the grid’s frequency to help to restore it to its normal operating range.
What this means for businesses
Businesses are paid to be on standby to protect the grid when grid frequency deviates from its acceptable range.
Frequency control services are procured in the Frequency Control Ancillary Services (FCAS) market and prices are determined every 5 minutes based on the real-time balance of supply and demand in the market.
You receive the highest-priced offer that successfully cleared in each 5-minute interval, and earn revenue for each megawatt your site is available for, even if your services aren’t needed for that interval.
There are three frequency control services businesses can provide (Fast, Medium, Slow), and each offers different revenue earning potential. Based on your technical capability, we confirm the categories you can participate in.
- We can adjust your level of participation at any time, and you can opt out if needed for operational reasons
- The revenue earned from your participation is proportional to the average kW you offer
- The revenue you can earn will be highest if you participate in all three services, which requires your equipment to respond in less than 6 seconds
Our hospital has a lot of electronic equipment that’s sensitive to voltage spikes and frequency deviations. We set parameters on our equipment so if the grid’s frequency deviates we automatically switch over to our backup generator. VPP participation became a hand in glove approach for us; we were already doing something similar, so it made sense to join this program and get paid for it.
A critical grid service
Today there’s an increased need for frequency control due to the retirement of thermal power stations, and more renewable power on the grid. The role of VPPs providing this service is becoming more important.
Last summer saw unprecedented network conditions across the NEM, with the bushfires and other extreme weather events. With Enel X, we were able to provide instant capacity to support the grid’s frequency throughout this challenging period. Our battery responds in less than one second, making it an ideal technology for participation in the frequency markets to support the grid.
Why Enel X
We’ve had a long history working in Demand Response and frequency control services. We entered New Zealand’s Instantaneous Reserves market in 2008, their equivalent to the FCAS markets. Today, we’re one of the biggest market participants, representing on average 65% of the interruptible load in the market.
Our experience and expertise offshore enabled us to become the first third-party aggregator in the NEM in 2017. Our VPP has grown rapidly, and is now the third largest supplier in the FCAS contingency raise markets. By the end of 2020, we expect to represent 30% of these markets.
We manage the largest VPP in Australia today (BNEF, 2019). As Australia accelerates its transition to renewable power, we are committed to growing the contribution of VPPs to the power grid because they are critical to achieving a cost-effective renewable future.
It’s an initiative that we’ve been pleased with from the beginning. Implementation was well-researched and thought out, we were clearly advised on what the process was and what we could expect, and it’s worked out really well since. Now that we’re comfortable with the process, we’re looking at increasing our load and enrolling a new facility.