FCAS: The value stream everyone’s talking about

In recent times contingency FCAS has become a very lucrative revenue stream for participants in the NEM able to offer services into the various contingency markets.

In particular, owners of battery storage systems have trousered some serious coin, often exceeding their own expectations for FCAS earnings (Hornsdale Reserve, South Australia’s VPPs, UQ’s battery have all shared some stellar results this year) with Q1 2020 being an absolute bonanza due to the protracted issues that South Australia experienced in February.

The significant amount of froth and interest that has been generated by batteries and FCAS prompted us to have a look at how the FCAS contingency markets have performed and changed over the last couple of years.

We used the Gridcognition technology to assess value that might have been captured by 1MW of storage given recent market prices. The graphic below plots cumulative value across all six markets in each State. While this is an achievable scenario for battery storage given the right planning and technology, this analysis just represents one of a number of possible outcomes.

The real question for battery owners, both current and prospective, is what the future is likely to hold for FCAS & other value streams and how best to develop a strategy with the right assets, in the right locations, with right control strategies, with the flexibility to respond to lucrative market signals.