SETTLEMENTS GUIDE TO ANCILLARY SERVICES PAYMENT AND RECOVERY

Transcription

1 SETTLEMENTS GUIDE TO ANCILLARY SERVICES PAYMENT AND RECOVERY PREPARED BY: Settlements VERSION: 2.0 DATE: 1 July 2015 Final

2 Disclaimer (a) Purpose This Guide has been produced by the Australian Energy Market Operator Limited (AEMO) to provide information about Ancillary Services Payment and Recovery in the National Electricity Market, as at the date of publication. (b) No substitute This Guide is not a substitute for, and should not be read in lieu of, the National Electricity Law (NEL), the National Electricity Rules (Rules) or any other relevant laws, codes, rules, procedures or policies. Further, the contents of this Guide do not constitute legal or business advice and should not be relied on as a substitute for obtaining detailed advice about the NEL, the Rules, or any other relevant laws, codes, rules, procedures or policies, or any aspect of the national electricity market or the electricity industry. (c) No Warranty While AEMO has used due care and skill in the production of this Guide, neither AEMO, nor any of its employees, agents and consultants make any representation or warranty as to the accuracy, reliability, completeness or suitability for particular purposes of the information in this Guide. (d) Limitation of liability - To the extent permitted by law, AEMO and its advisers, consultants and other contributors to this Guide (or their respective associated companies, businesses, partners, directors, officers or employees) shall not be liable for any errors, omissions, defects or misrepresentations in the information contained in this Guide, or for any loss or damage suffered by persons who use or rely on such information (including by reason of negligence, negligent misstatement or otherwise). If any law prohibits the exclusion of such liability, AEMO s liability is limited, at AEMO s option, to the re-supply of the information, provided that this limitation is permitted by law and is fair and reasonable All rights reserved. Doc Ref: v2.0 1 July 2015 Page 2 of 35

3 Contents 1 Introduction Market Ancillary Services Regulation FCAS Contingency FCAS FCAS Recovery Co-optimisation Non-Market Ancillary Services NSCAS and SRAS NSCAS Payments NSCAS Cost Recovery SRAS Payments SRAS Cost Recovery Test Payment Recovery Glossary of Terms Appendix A Worked Examples A.1 Frequency Control Ancillary Service (FCAS) Contingency Recovery Calculations (Raise 6 Sec) A.2 FCAS Regulation Recovery Calculations (Regulation Raise) A.3 NSCAS Recovery Calculations A.4 SRAS Recovery Calculations Appendix B Data Tables Appendix C Ancillary Services Reporting in the Settlement Report C.1 Market Ancillary Services Payment C.2 Market Ancillary Services Recovery C.3 Non-Market Ancillary Services Payment C.4 Non-Market Ancillary Services Recovery Appendix D Ancillary Services Reports on AEMO Website Appendix E References Doc Ref: v2.0 1 July 2015 Page 3 of 35

4 Figures Figure 1 Non-Market Ancillary Service Summary... 7 Figure 2 Market Ancillary Service Summary... 7 Figure 3 Current AS Payment and Recovery Files Figure 4 Historical AS Payment and Recovery Files Figure 5 Customer Recovery Rates Figure 6 Generator Recovery Rates Tables Table 1 Ancillary Service Payment Summary... 8 Table 2 Ancillary Service Recovery Summary... 8 Table 3 Regional Constraint Information Table 4 Participant Generator Energy Data Table 5 Regulation Constraint Information Table 6 Customer Energy Consumption Table 7 Total Energy by Requirement Region Table 8 MPF and Recovery Calculations Table 9 Residual MPF and Recovery Calculations Table 10 Information for Loadshed Recovery Calculation Table 11 Information for Reactive Power Recovery Calculation Table 12 Information for SRAS Customer Recovery Calculation Table 13 Information for SRAS Generator Recovery Calculation Table 14 Data Tables in the EMMS data model Table 15 Market Ancillary Service Payment by Service Type Table 16 Market Ancillary Service Payment by Transmission Node Table 17 Market Ancillary Service Recovery by Service Type Table 18 Non-Market Ancillary Service Payment by Service Type Table 19 Non- Market Ancillary Service Payment by Contract ID Table 20 Non-Market Ancillary Service Recovery by NMAS Type Table 21 Non-Market Ancillary Service Recovery by Service Type Table 22 AS Recovery Summary Table Names Table 23 AS Payment Summary Table Names Doc Ref: v2.0 1 July 2015 Page 4 of 35

5 Version Release History VERSION DATE BY CHANGES /03/2014 Ruchira Ray /07/2015 Carol Poon Updated 3.5, Appendix A.4 and Appendix B based on changes to the SRAS cost recovery calculations commencing on 1 July 2015 recovering SRAS costs on the basis of the regional benefits (rule change reference ERC0168). Doc Ref: v2.0 1 July 2015 Page 5 of 35

6 1 Introduction AEMO procures ancillary services to fulfil its obligations, under the National Electricity Rules (referred herein as the Rules). These services are used to make sure the power system is operated in a safe, secure and reliable manner. Ancillary service costs depend on the service price and the quantity required at a given time. As these amounts can vary substantially from period to period, costs will also vary. AEMO recovers the costs of these services from market participants. This is all done as a part of the settlement process. The purpose of this document is to give a high level understanding of the methodology used in the settlement process for payment and recovery of ancillary services, undertaken by AEMO. The first chapter gives a brief overview of what ancillary services are and a summary of how they are paid and recovered by AEMO. The subsequent chapters detail the methodology for payment and recovery of market and non-market ancillary services used in the settlement calculations. Worked examples, a table of relevant data sources, a breakdown of a sample settlement report and an explanation of ancillary service recovery and payment information available on AEMO s website are all provided in the appendix. All NEM Ancillary Services can be broadly grouped under one of the following three categories: Frequency Control Ancillary Services (FCAS). Network Support and Control Ancillary Services (NSCAS). System Restart Ancillary Service (SRAS). These services can be categorised into market and non-market services, (see Figure 1 and Figure 2) For more information please see Guide to Ancillary Services in the National Electricity Market. 1 AEMO procures these services from market participants by: Market Ancillary Service Arrangements (for market services). Ancillary Service Contractual Agreements (for non-market services). 1 AEMO. Available at: Descriptions/Guide-to-Ancillary-Services-in-the-NEM Doc Ref: v2.0 1 July 2015 Page 6 of 35

7 Figure 1 Non-Market Ancillary Service Summary Non- Market Ancillary Services (NMAS) NSCAS SRAS Reactive Power Loadshed System Restart Figure 2 Market Ancillary Service Summary Market Ancillary Services FCAS Markets Regulation Contingency Raise Lowe 6 SEC 60 SEC 5 Min Raise Lowe r Raise Lower Raise Lower Fast Service Slow Service Delayed Service Doc Ref: v2.0 1 July 2015 Page 7 of 35

8 The following tables summarise the payment and recovery methods for each of the ancillary services. Table 1 Ancillary Service Payment Summary Ancillary Service Type Payment Method Paid To Reference Regulation FCAS Based on the market clearing price and the quantity of service provided The scheduled generator/ customer Chapter 2.1 Contingency FCAS Based on the market clearing price and the quantity of service provided The scheduled generator/ customer Chapter 2.2 NSCAS Reactive Power Paid based on contractual agreements with participants Contracted market participant Chapter 3.2 NSCAS Loadshed Paid based on contractual agreements with participants Contracted market participant Chapter 3.2 SRAS Paid based on contractual agreements with participants Contracted market participant Chapter 3.4 Table 2 Ancillary Service Recovery Summary Ancillary Service Type Recovery Method Recovered From Reference Regulation FCAS Causer Pays basis Market participants with Market Participation Factor (MPF) and residual from market customers Chapter 2.1 Contingency FCAS Recovered in proportion to energy consumption / generation Raise services are recovered from generators; lower services are recovered from market customers Chapter 2.2 NSCAS Reactive Service NSCAS Loadshed Service Recovered in proportion to energy consumption in benefiting regions Recovered in proportion to energy consumption in benefiting regions Market customers only Chapter 3.3 Market customers only Chapter 3.3 SRAS Recovered in proportion to energy consumption / generation in benefiting regions Recovered equally from market customers and generators Chapter 3.5 Doc Ref: v2.0 1 July 2015 Page 8 of 35

9 2 Market Ancillary Services Frequency Control Ancillary Services (FCAS) are used by AEMO to maintain the frequency on the electrical system, at any point in time, close to fifty cycles per second (50 Hz) as required by the NEM frequency standards set by the AEMC Reliability Panel. FCAS is divided into: a) Regulation services. b) Contingency services. 2.1 Regulation FCAS Regulation FCAS can be described as the generation / demand balance correction in response to minor deviations in demand or generation. There are two types of Regulation FCAS services: a) Regulation Raise (RaiseReg): Requires participants to add MW to the system in order to raise the frequency to the required range. b) Regulation lower (RaiseLower): Requires participants to take MW out of the system in order to lower the frequency to the required range. 2.2 Contingency FCAS Contingency FCAS refers to generation/demand balance correction in response to major contingency events such as the loss of a generating unit or a loss of load. There are six types of contingency FCAS services: i) Fast Raise (6 second Raise) ii) Fast Lower (6 second Lower) iii) Slow Raise (60 second Raise) iv) Slow Lower (60 second Lower) v) Delayed Raise (5 minute Raise) vi) Delayed Lower (5 minute Lower) Service provided within 6 sec of contingency event Service provided within 60 sec Service provided within 5 minutes Doc Ref: v2.0 1 July 2015 Page 9 of 35

10 2.3 FCAS Recovery For each dispatch interval, AEMO s dispatch engine (NEMDE) determines a market clearing price for each of the eight FCAS markets. This price is used to determine the payments to the FCAS providers. The payments for FCAS are then recovered from market participants (see Table 2). The recovery method for each type of FCAS is detailed in the following subsections Contingency FCAS Recovery Constraints As outlined in the Rules, AEMO procures contingency FCAS to meet a series of binding constraints (also known as Requirements), by region. AEMO pays for the cost to the contingency service provider for meeting the binding constraints. These FCAS payments are then recovered from market participants by local recovery (i.e., recovered based on the regions in which the constraint was required) or global recovery (i.e., recovered across the entire NEM). The constraints that are binding may differ over a given dispatch interval, for a given region. The binding constraint IDs are given in the table, dispatch_fcas_req found in the EMMS Data Model. The binding constraints are calculated every five minutes. For a description of the constraint IDs, please see gencondata. For more information on constraints please see the FCAS Constraint Equations 2 and the Constraint Formulation Guidelines 3 documents available on AEMO s website Calculating Lower Contingency FCAS Recovery Lower contingency FCAS costs are recovered from market customers only. For each lower contingency FCAS, the following formula is applied for each constraint to calculate the service recovery by participant over a five-minute interval. This is then aggregated over the half hour period to give the recovery over the trading interval: Where: Constraint [X] Lower_FCAS_contingency recovery Total adjusted cost of constraint [X] Total customer energy by participant in the requirement region Total customer energy in the requirement region The binding constraint required to be met in the five minute interval The amount recovered from the participant, for lower FCAS contingency service, for the cost of meeting the required Constraint [X] in the five minute interval The cost associated with meeting the binding constraint, in the five minute interval, paid by AEMO to the FCAS service providers Total energy consumed for the participant across the regions in which Constraint [X] was a requirement Total energy consumed across the regions in which the Constraint [X] was required as a binding constraint 2 AEMO. Available at: Descriptions/FCAS-Constraint-Equations 3 AEMO. Available at: Descriptions/Constraint-Formulation-Guidelines Doc Ref: v2.0 1 July 2015 Page 10 of 35

11 Calculating Raise Contingency FCAS Recovery Raise Contingency FCAS costs are recovered from market generators only. This includes generators and Small Generation Aggregators (SGAs). For each Raise Contingency FCAS, the following formula is applied for each constraint to calculate the service recovery by participant over a five-minute interval. This is then aggregated over the half hour period to give the recovery over the trading interval: Where: Constraint [X] Raise_FCAS_contingency recovery Total adjusted cost of constraint [X] Total generator energy by participant in the requirement regions Total generator energy in the requirement regions The binding constraint required to be met in the five minute interval The amount recovered from the participant, for Raise FCAS contingency service, for the cost of meeting the required Constraint [X] in the five minute interval The cost associated with meeting the binding constraint, in the five minute interval, paid by AEMO to the FCAS service providers Total generator energy for the participant over the regions in which Constraint [X] was a requirement Total generator energy over the regions in which the Constraint [X] was required as a binding constraint Regulation FCAS Recovery Similar to contingency FCAS, regulation FCAS recovery calculations also recover the cost of binding constraints. However, regulation FCAS recovery is calculated on a causer pays basis, i.e., the amount paid by AEMO for the FCAS service is recovered from market participants responsible for causing the need for the service. Therefore, regulation FCAS recovery is calculated on the basis of a participant s Market Participant Factor (MPF), also referred to as Causer Pays Contributing Factors Market Participant Factors The regulation FCAS cost recovery per participant is based on their MPF. The regulation FCAS recovery methodology incorporates two components: a) Causer Pays assigned to market customers causing frequency imbalance (based on MPFs). b) Residual this residual is assigned to market customers who do not have a MPF. For more information on MPF or Contributing Factors and the published MPFs, please see Ancillary Services Causer Pays Contribution Factors. 4 4 AEMO. Available at: Documentation/Ancillary-Services-Causer-Pays-Contribution-Factors Doc Ref: v2.0 1 July 2015 Page 11 of 35

12 2.3.4 Calculating Regulation FCAS Recovery For participants with an MPF, the formula for calculating Regulation FCAS Recovery is: Where: Constraint [X] The binding constraint required to be met in the five minute interval FCAS_Regulation recovery with MPF for constraint [X] Total adjusted cost of constraint [X] The amount recovered from the participant, for a particular regulation FCAS service, for the cost of meeting the required Constraint [X] in the five minute interval The cost associated with meeting the binding constraint [X], in the five minute interval, paid by AEMO to the FCAS service providers MPF Market Participant Factor for the participant Total MPF Sum of all the MPF Residual_MPF Total MPF CR_MPF Constraint Residual Market Participant Factor Total customer energy in the requirement regions Total customer energy in the NEM Total energy consumed across the regions in which Constraint [X] was a requirement Total energy consumed over the entire NEM Because not all regulation payments are fully recovered from participants with an MPF, residual amounts are recovered from remaining market customers. For market customers without an MPF, the formula for calculating regulation FCAS recovery is: Doc Ref: v2.0 1 July 2015 Page 12 of 35

13 Where: FCAS_Regulation recovery with no MPF Total residual adjusted cost of constraint [X] Total customer energy by participant with no MPF in the requirement region Total customer energy by ALL participants with no MPF in the requirement region The amount recovered from a participant with no MPF, for a particular regulation FCAS service, for the cost of meeting the required Constraint [X] in the five minute interval This is the remaining adjusted cost of the constraint that is still to be recovered. This is calculated after the recovery from participants with MPFs has been accounted for. Total energy consumed for the participant with no MPF across the regions in which Constraint [X] was a requirement Total energy consumed by participants with no MPF across the regions in which the Constraint [X] was required as a binding constraint 2.4 Co-optimisation AEMO uses a process of co-optimisation between delayed contingency FCAS and regulation FCAS for the purposes of efficient dispatch. As a result of this the total amount recovered for delayed contingency FCAS and regulation FCAS will equal the total payments for delayed contingency FCAS and regulation FCAS. i.e., Total Payments (Delayed Contingency + Regulation) Total Recovery (Delayed Contingency + Regulation) For more information on co-optimisation of delayed contingency FCAS and regulation FCAS please see the FCAS Constraint Equations 5 document on AEMO s website. 5 AEMO. Available at: Descriptions/FCAS-Constraint-Equations Doc Ref: v2.0 1 July 2015 Page 13 of 35

14 3 Non-Market Ancillary Services 3.1 NSCAS and SRAS Network Support and Control Ancillary Services (NSCAS) are used to control voltage at different points along the network to within prescribed standards and to keep power flow to within physical limitations. AEMO recovers Ancillary Services for two subsets of NSCAS, namely: 1) Loadshed: Voluntary shedding of load to maintain system frequency. 2) Reactive Power: Reactive Power Ancillary Services are used by AEMO to control the voltage in the national electricity grid to specified tolerances, by absorbing or supplying reactive power. System Restart Ancillary Services (SRAS) enable the power system to be restarted following a complete or partial system failure. For more information on non-market Ancillary Services, please see Non-Market Ancillary Services NSCAS Payments AEMO procures NSCAS through long term contractual agreements with market participants at an agreed price. There are different types of NSCAS payments, as outlined below: i) Availability payments made for every trading interval that the service is available. ii) Enabling payments (for some subsets of Reactive Power only) made only when the service is specifically enabled. iii) Usage payments (for some subsets of loadshed only) made when the service is successfully delivered in response to an instruction from AEMO. iv) Testing payments made when a test is successfully conducted. 3.3 NSCAS Cost Recovery AEMO recovers both loadshed and reactive power ancillary services fully from market customers. Participants pay a recovery amount in proportion to their energy consumption. In accordance with Rule A (c1), from April 2012, AEMO recovers NSCAS costs on a regional basis, from the benefiting region(s). This is done by applying Regional Benefit Factors (RBFs). For more information on RBF, please see Regional Benefit Ancillary Service Procedure 7. For every trading interval, the regional recovery formulae are applied to the two types of services are as follows: 6 AEMO. Available at: Procedures/~/media/Files/Other/SystemOperatingProcedures/so_op3708v18.ashx 7 AEMO. Available at: Ancillary-Services-Procedure-Consultation Doc Ref: v2.0 1 July 2015 Page 14 of 35

15 For each trading interval, the reactive power and loadshed recovery is then aggregated for all regions, by participant, and then summed to give the total NSCAS recovery by participant. i.e., Where: RBF Loadshed / Reactive power recovery ($) Loadshed/ Reactive power payment ($) Each region is assigned a regional benefit factor (RBF). The RBF for each region is used in the recovery calculations of the respective region. Recovery amount payable by participant for a given trading interval for loadshed/ reactive power ancillary services Total payment made by AEMO for loadshed/ reactive power ancillary services in that trading interval Total customer energy by customer (MWh) Total customer energy in the region (MWh) The total customer energy for the participant in that region, for a given trading interval The total customer energy for all market customers in that region for a given trading interval Note: The total loadshed / reactive power payment used in the above recovery calculations is only the payment made for the providing the respective ancillary services. This does not include the test payments. For information on Test Payment Recovery please see Chapter SRAS Payments AEMO procures SRAS through long term contractual agreements with market participants, at an agreed upon price. These payments encompass the following services: i) Availability payments made for every trading interval that the service is available ii) Usage payments made when the service is successfully delivered in response to an instruction from AEMO. iii) Testing payments made when a test is successfully conducted 3.5 SRAS Cost Recovery AEMO recovers SRAS costs on a 50/50 basis from customers and generators (including SGAs) on a regional basis 8. The SRAS payments are recovered in proportion to the energy consumption/generation for each participant within the benefitting regions (represented by RBFs). The formulae applied for SRAS cost recovery in a region, for a given trading interval, is as follows: Customers SRAS Recovery 8 In accordance with Rule A (d) and A (e), prior to 1 July 2015, SRAS costs were recovered on a NEM-wide basis. As SRAS test payments are recovered based on energy over a period that can span multiple days, SRAS test payments will be recovered on a NEM-wide basis if the test service date is before 1 July If the test service date is on or after 1 July 2015, SRAS test payments will be recovered on a regional basis. Doc Ref: v2.0 1 July 2015 Page 15 of 35

16 Generator/ Small Generator Aggregator (SGA) SRAS Recovery Where: SRAS recovery per customer/ generator/sga by region Total SRAS payment for NEM RBF Total customer/generator energy by customer/ generator/ SGA in the region (MWh) Recovery amount payable by participant in that region, for a given trading interval for SRAS Total payment made by AEMO for SRAS in that trading interval Each region is assigned a RBF. The RBF for each region is used in the recovery calculations of the respective region. The total customer/generator/sga energy for the participant in that region, for a given trading interval Total customer/generator energy in the region (MWh) The total customer/generator/sga energy in that region, for a given trading interval Note: Total generator energy in the region includes the sum of generation by participants registered as generators and participants registered as SGA in that region. The (1/2) in the above two formulae reflect the equal recovery of SRAS from customers and generators/ SGA. Energy for generators/sga is floored to 0 MWh for each participant. 3.6 Test Payment Recovery AEMO applies the same formulae to calculate test payment recovery as the respective ancillary service recovery, i.e., i) NSCAS test payment recovery is calculated as per the formula in Chapter 3.3 ii) SRAS test payment recovery is calculated as per the formula in Chapter 3.5 However, where the equations refer to customer/generator energy for a given trading interval, the test payment recovery calculations use energy customer/generator energy for the entire test payment recovery period. Test payments are paid and recovered as a lump sum in the billing week in which the successful test is confirmed by AEMO. Since other ancillary service recovery amounts are calculated on a half-hourly basis, the amounts in all trading intervals that fall within the billing week are first aggregated for the billing week. The test payment recovery amounts are then added to give the final billing recovery value. For more information on NMAS recovery reconciliation and test payment recovery period start and end dates, please see NMAS Recovery Reconciliation Data 9. To find the settlement dates in a given settlement billing week, please see the NEM Settlement Calendar AEMO. Available at: 10 AEMO. Available at: Doc Ref: v2.0 1 July 2015 Page 16 of 35

17 4 Glossary of Terms TERM DESCRIPTION NEM Rules Market Customer Market Generator FCAS NSCAS SRAS Fast Raise and Lower Service National Electricity Market National Electricity Rules Market participants that are registered as Market Customers with AEMO Market participants that are registered as Market Generators with AEMO Frequency Control Ancillary Services Network Support and Control Ancillary Services System Restart Ancillary Services Contingency FCAS provided within six seconds following a contingency Slow Raise and Lower Service Contingency FCAS provided within sixty seconds following a contingency Delayed Raise and Lower Service Contingency FCAS provided within five minutes of a contingency Regulation Raise and Lower Service Regulation FCAS required to maintain the frequency within the normal operating band Dispatch Interval NEMDE Co-optimisation Causer Pays / MPF Constraint Equation Five minute market dispatch period for which the dispatch engine is run National Electricity Market Dispatch Engine The process of using delayed and regulation FCAS interchangeably to increase service efficiency. Market Participant Factors assigned to market participants as outlined in Rule A. These are used to assign Regulation FCAS costs. The mathematical representation that AEMO uses to manage power system limitations and FCAS requirements in NEMDE Global Requirement FCAS requirement for all regions in the NEM Local Requirement FCAS requirement for a single or group of regions Requirement Regions The regions for which a given constraint is binding are known as the requirement regions for that constraint. Each constraint may have different requirement regions. Doc Ref: v2.0 1 July 2015 Page 17 of 35

18 Appendix A Worked Examples Note: All data used in these worked examples are for illustration purposes only and do not reflect any confidential participant information. A.1 Frequency Control Ancillary Service (FCAS) Contingency Recovery Calculations (Raise 6 Sec) We provide here an example of contingency recovery for two binding constraints (FC_1, FC_2), for a given five minute interval. The adjusted costs of a constraint are reported in five minute intervals. Therefore, the recovery is calculated at five minute dispatch interval and aggregated over the 30 minute period to get the total recovery for the given trading interval (See Chapter 2.2 for formula). In the following example, as raise contingency services are recovered from generators, we use the generator energy for each participant in the following calculations. For lower contingency services calculations, customer energy is used. Table 3 Regional Constraint Information Settlement Date GenConID (Constraint ID) Requirement Regions Service Type Adjusted Costs ($) 12/08/ :15:00 FC_1 NSW; VIC Raise 6 sec 45 12/08/ :15:00 FC_2 NSW; QLD Raise 6 sec 60 Table 4 Participant Generator Energy Data Settlement Date PID Region ID Regional Requirements Gen Energy (MWh) 12/08/ :30:00 A NSW FC_1; FC_ /08/ :30:00 A QLD FC_ /08/ :30:00 B NSW FC_1; FC_ /08/ :30:00 C NSW FC_1; FC_ /08/ :30:00 C QLD FC_ /08/ :30:00 C VIC FC_1 30 Note: While the constraint information is reported in 5 minute dispatch intervals (see Table 3) the energy data is reported in 30-min trading intervals (see Table 4). Therefore, the energy data for the trading interval in which the dispatch falls is used in the recovery calculations. In this example, as trading interval at 12/08/ :30:00 includes the dispatch interval 12/08/ :15:00, the energy data in this trading interval is used. Doc Ref: v2.0 1 July 2015 Page 18 of 35

19 Calculating recovery for constraint FC_1: [Dispatch Interval 12/08/ :15:00] Adjusted Cost (FC_1) $45.00 Total Gen Energy (FC_1) Gen Energy (A, NSW) + Gen Energy (B, NSW) + Gen Energy (C, NSW) + Gen Energy (C, VIC) Therefore, for five minute Dispatch Interval: 12/08/ :15:00 Recovery(A, NSW, FC_1) ($45.00)*(100/350) $12.86 Recovery (B, NSW, FC_1) ($45.00)*(200/350) $25.71 Recovery (C, NSW, FC_1) ($45.00)*(20/350) $2.57 Recovery ( C, VIC, FC_1) ($45.00)*(30/350) $3.86 Calculating recovery for constraint FC_2: [Dispatch Interval 12/08/ :15:00] Adjusted Cost (FC_1) $60.00 Total Gen Energy (FC_2) Therefore, for five minute Dispatch Interval: 12/08/ :15:00 Recovery(A, NSW, FC_2) ($60.00)*(100/470) $12.77 Recovery (A, QLD, FC_2) ($60.00)*(50/470) $ 6.38 Recovery (B, NSW, FC_2) ($60.00)*(200/470) $ Recovery (C, NSW, FC_2) ($60.00)*(20/470) $2.553 Recovery ( C, QLD, FC_2) ($60.00)*(100/470) $12.77 Note: The calculation is repeated for all five-minute dispatch intervals that fall within the trading interval (i.e., between 12/08/ :00:00 10:30:00) and then summed to give the recovery amount for the trading interval (12/08/ :30:00). Doc Ref: v2.0 1 July 2015 Page 19 of 35

20 A.2 FCAS Regulation Recovery Calculations (Regulation Raise) Step 1: Obtaining Regional Requirement Information Table 5 gives the regulation constraint information for binding constraint FC_Reg_1, i.e., the constraint cost and the regions the constraint applies to. In this example the recovery regions are all states. Given this, Table 6 can be used to find the total customer energy in each requirement region. The aggregated values by region have been populated in Table 7. Table 5 Regulation Constraint Information Settlement Date GenConID (Constraint ID) Region ID Service Type Adjusted Costs ($) 27/05/ :35:00 FC_Reg_1 NSW1 Raise Reg /05/ :35:00 FC_Reg_1 QLD1 Raise Reg /05/ :35:00 FC_Reg_1 VIC1 Raise Reg /05/ :35:00 FC_Reg_1 TAS1 Raise Reg /05/ :35:00 FC_Reg_1 SA1 Raise Reg 150 Table 6 Customer Energy Consumption Doc Ref: v2.0 1 July 2015 Page 20 of 35

21 Table 7 Total Energy by Requirement Region Requirement Region NSW1 QLD1 VIC1 SA1 TAS1 Total Customer Energy in Requirement Region (MWh) 1,926 2,005 1, Step 2: Calculating CR_MPF The information from Table 7 can then be used to calculate the CR_MPF, as shown below: Step 3: Calculating MPF Recovery After calculating the CR_MPF and obtaining the MPF data (see Chapter 2.2), we can calculate the regulation recovery for participants with MPF (see Chapter 2.2 for formula). The data and calculations are shown below: Table 8 MPF and Recovery Calculations PID MPF CRMPF ADJ COST ($) MPF Recovery ($) A B D E G I MPF recovery (A) 5.6 $ x 65 + (1 x 35) $8.40 J K L Total MPF 65 Total Residual MPF 35 Total Residual Recovery 52.5 Residual recovery $ $97.50 $52.50 Doc Ref: v2.0 1 July 2015 Page 21 of 35

22 Step 4: Calculating Residual MPF Recovery Having calculated the MPF recovery, for all participants with MPF, we obtain the residual to be recovered (see Table 8). Using the information in Table 6 we then obtain the total customer energy of participants (with no MPF) in the requirement regions. This information is populated in Table 9. The residual is then recovered from participants with no MPF in proportion to their customer energy relative to the total customer energy by participants with no MPF, as shown below: Table 9 Residual MPF and Recovery Calculations PID Total Customer Energy in Requirement Regions (MWh) R_MPF Recovery ($) C R_MPF (C) ($52.50) $17.04 F H M N O P Total Doc Ref: v2.0 1 July 2015 Page 22 of 35

23 A.3 NSCAS Recovery Calculations A.3.1 Calculating Total Loadshed Recovery Given the following information, for a given trading interval, we can calculate the total loadshed recovery for participant A as shown below (see Chapter 3.3 for formula): Table 10 Information for Loadshed Recovery Calculation Customer A energy (MWh) Total customer energy (MWh) VIC NSW QLD TOTAL ,900 RBF Loadshed payment ($) 54,500 RBF allocated across all regions will sum to one. Step 1: Calculate the loadshed recovery for customer A in each region Loadshed recovery for customer A (VIC) Loadshed recovery for customer A (NSW) Loadshed recovery for customer A (QLD) ($54,500.00)*(0.1)*(200/500) $2, ($54,500.00)*(0.75)*(150/600) $10, ($54,500.00)*(0.15)*(350/800) $3, Step 2: Sum all loadshed recovery by region to get the total loadshed recovery for customer A Total loadshed recovery for customer A $2, $10, $3, $15, Doc Ref: v2.0 1 July 2015 Page 23 of 35

24 A.3.2 Calculating Total Reactive Power Recovery Given the following information, for a given trading interval, we can calculate the total reactive power recovery for participant A, for a given trading interval, as shown below (see Chapter 3.3 for formula): Table 11 Information for Reactive Power Recovery Calculation VIC NSW QLD TOTAL Customer A energy (MWh) Total energy (MWh) 900 1, ,700 RBF Reactive power payment ($) 61,500 RBF allocated across all regions will sum to one. Step 1: Calculate the reactive power recovery for customer A in each region Reactive power recovery for customer A (VIC) Reactive power recovery for customer A (NSW) Reactive power recovery for customer A (QLD) ($61,500.00)*(0.7)*(300/900) $14, ($61,500.00)*(0.1)*(425/1,100) $2, ($61,500.00)*(0.2)*(250/700) $4, Step 2: Sum all the reactive power recovery by region to get the total reactive power recovery for customer A Total reactive power recovery for customer A $14, $2, $4, $21, A.3.3 Calculating Total NSCAS Recovery Having calculated the total loadshed and reactive power recovery for participant A in Chapter A.3.1 and Chapter A.3.2, the NSCAS recovery is calculated by adding the total loadshed and total reactive power recovery, as shown: Total NSCAS recovery for customer A Total loadshed recovery for customer A + Total reactive power recovery for customer A $15, $21, $37, Doc Ref: v2.0 1 July 2015 Page 24 of 35

25 A.4 SRAS Recovery Calculations A.4.1 Calculating SRAS recovery for a market customer Given the following information, we can calculate the SRAS recovery for participant A, who is a customer, in each region as shown below (See Chapter 3.5 for formula): Table 12 Information for SRAS Customer Recovery Calculation Customer A energy (MWh) VIC NSW QLD TOTAL Total energy (MWh) ,800 RBF SRAS Payment ($) 50,000 Customer recovery proportion (1/2) RBF allocated across all regions will sum to one. SRAS is recovered equally from customers and generators SRAS recovery for participant A (VIC) SRAS recovery for participant A (NSW) SRAS recovery for participant A (QLD) $50, * 0.7 * (1/2) * (100/400) $4, $50, * 0.1 * (1/2) * (200/600) $ $50, * 0.2 * (1/2) * (300/800) $1, A.4.2 Calculating SRAS Recovery for a market generator Given the following information, we can calculate the SRAS recovery fee for participant B, who is a generator, in each region as shown below (See Chapter 3.5 for formula): Table 13 Information for SRAS Generator Recovery Calculation VIC NSW QLD TOTAL Generator B Energy (MWh) ,100 Total Energy (MWh) ,300 RBF SRAS Payment ($) 75,000 Generator Recovery Proportion (1/2) SRAS recovery for participant A (VIC) $75, * 0.7 * (1/2) * (200/500) Doc Ref: v2.0 1 July 2015 Page 25 of 35

26 SRAS recovery for participant A (NSW) SRAS recovery for participant A (QLD) $10, $75, * 0.1 * (1/2) * (500/900) $2, $75, * 0.2 * (1/2) * (400/900) $3, Doc Ref: v2.0 1 July 2015 Page 26 of 35

27 Appendix B Data Tables This section outlines confidential and public data tables available for use for reconciliation purposes. These tables are found in the EMMS data model available to registered market participants. Table 14 Data Tables in the EMMS data model Table Name Description Type billingasrecovery billing_nmas_tst_payment s billing_nmas_tst_recovery setcfg_participant_mpf dispatch_fcas_req setgendata Shows participant charges for ancillary services for the billing period Shows testing payment details for system restart services by period Shows testing recovery amounts for system restart services to be recovered from participants Shows the Market Participant Factors (MPF) for each connection point Shows dispatch constraint tracking for regional Frequency Control Ancillary Services (FCAS) recovery Shows settlement data (including generator energy) for each generating unit Confidential Confidential Confidential Public Public Confidential setcpdata Shows settlement data for each customer connection point Confidential setrpowerrecovery setlshedrecovery setrestartrecovery Shows recovery amounts for reactive power ancillary services to be recovered from participants Shows recovery amounts for loadshed ancillary services to be recovered from participants Shows recovery amounts for system restart ancillary services to be recovered from participants Confidential Confidential Confidential setlshedpayment Shows specific payment details for loadshed services by period Confidential setrpowerpayment setrestartpayment Shows specific payment details for reactive power services by period Shows specific payment details for system restart services by period Confidential Confidential set_fcas_payment Sets out enabling payment details for FCAS Confidential set_fcas_recovery set_nmas_recovery Shows recovery amounts for FCAS to be recovered from participants. Shows recovery amounts for system restart services to be recovered from participants Confidential Confidential Please note the confidential nature of the data may mean full reconciliation of ancillary services recovery and payment calculations is not be possible. Doc Ref: v2.0 1 July 2015 Page 27 of 35

28 Appendix C Ancillary Services Reporting in the Settlement Report Along with their weekly settlement statements NEM market participants receive a text document called the Settlement Report (SR). The SR contains a summary of the energy sold and purchased for the billing week and also contains a detailed summary of the ancillary services payments and recovery for the billing week. This section gives an example of what the ancillary services payment and recovery summary looks like in a typical settlement report received by a market participant. Note that each participant will not receive all of the ancillary service payment and recovery summaries shown below. For instance, participants who are not providers of ancillary services will not see the ancillary service payment summaries while participants that are market generators will not receive a breakdown of the NSCAS recovery as this ancillary service is not recovered from market generators. C.1 Market Ancillary Services Payment Table 15 shows the total amount paid by AEMO to the market participant for providing market ancillary services, catgeorised by the service type. Table 16 represents the same information as Table 15, however it is broken down further by transmission node. Note that the total by service in Table 16 reconciles with the amounts for each service in Table 15, as highlighted below. Table 15 Market Ancillary Service Payment by Service Type Contingency FCAS Regulation FCAS Table 16 Market Ancillary Service Payment by Transmission Node FCAS Compensation may be paid to market participant if AEMO makes a direction. C.2 Market Ancillary Services Recovery The following table shows the amounts recovered by AEMO from the market participant for the market ancillary services, broken down by service type and separated by recovery from customer and generator. Doc Ref: v2.0 1 July 2015 Page 28 of 35

29 Table 17 Market Ancillary Service Recovery by Service Type Contingency raise services are not recovered from customers Contingency lower services are not recovered from generators Contingency FCAS Regulation FCAS C.3 Non-Market Ancillary Services Payment Table 18 shows the payment for non-market ancillary services by service type. While Table 19 captures the same information as Table 18, it is further broken down by contract id and payment component (i.e., availability, enablement/ usage, compensation and testing). Table 18 Non-Market Ancillary Service Payment by Service Type Doc Ref: v2.0 1 July 2015 Page 29 of 35

30 Table 19 Non-Market Ancillary Service Payment by Contract ID Compensation may be paid to market participant if AEMO makes a direction. Test Payments are made to participants for testing their systems are capable of providing the nonmarket ancillary service. This payment is made when a successful test is confirmed. C.4 Non-Market Ancillary Services Recovery Table 20 shows the non-market ancillary service (NMAS) recovery by category (i.e., NSCAS, SRAS). Table 21 further breaks down the NMAS recovery by service type, region and payment type. Table 20 Non-Market Ancillary Service Recovery by NMAS Type NSCAS is not recovered from generators. Table 21 Non-Market Ancillary Service Recovery by Service Type Doc Ref: v2.0 1 July 2015 Page 30 of 35

31 Appendix D Ancillary Services Reports on AEMO Website AEMO publishes Ancillary Service Payments and Recovery reports on AEMO s website. 11 These reports contain publicly available data on total weekly payment and recovery amounts for each ancillary service category, broken down by region. The data in the current year summary files (shown in Figure 3) are updated every time settlement statements (preliminary, final, or revision) are posted. Market participants are also able to access and subscribe to receive these files by , through Settlement Direct. Figure 3 Current AS Payment and Recovery Files Historical ancillary service recovery and payment summary files are also available (see Figure 4).These are archived reports that are only updated at the start of the year if revised data is available. These historical files are available for the last two years. Figure 4 Historical AS Payment and Recovery Files 11 AEMO. Available at: Doc Ref: v2.0 1 July 2015 Page 31 of 35

32 The AS Recovery and Payment Summary file column names are detailed in Table 22 and Table 23: Table 22 AS Recovery Summary Table Names COLUMN NAME ASRECOVERY_SUMMARY BILLING_WEEK STATUS REGIONID DEFINITION This specifies the report type - Ancillary Services Recovery Summary Report Specifies the year and billing week the ancillary services are recovered. The settlement dates within the billing week can be found from the settlement calendar This refers to the latest statement type for the billing week. The corresponding data is used in the recovery calculations The region the ancillary services costs are recovered from LOWER6SEC Fast Contingency Lower FCAS Recovery ($) LOWER60SEC Slow Contingency Lower FCAS Recovery ($) LOWER5MIN Delayed Contingency Lower FCAS Recovery ($) LOWERREG Lower Regulation FCAS Recovery ($) RAISE6SEC Fast Contingency Raise FCAS Recovery ($) RAISE60SEC Slow Contingency Raise FCAS Recovery ($) RAISE5MIN Delayed Contingency Raise FCAS Recovery ($) RAISEREG Raise Regulation FCAS Recovery ($) RESTART Restart (SRAS) Recovery ($) REACTIVE Reactive (NSCAS) Recovery ($) LOADSHED Loadshed (NSCAS) Recovery ($) TOTAL_CUSTOMER_RECOVERY TOTAL_GENERATOR_RECOVERY ENERGY_CUSTOMER ENERGY_GENERATOR RECOVERY_RATE_CUSTOMER RECOVERY_RATE_GENERATOR Total ancillary service costs recovered from market customers ($) Total ancillary service costs recovered from market generators ($) where generators includes SGA Total customer energy (MWh) Total generator energy (MWh) where generators includes SGA The customer recovery rate is given in $/MWh and is the TOTAL_CUSTOMER_RECOVERY divided by ENERGY_CUSTOMER The generator recovery rate is given in $/MWh and is the TOTAL_GENERATOR_RECOVERY divided by ENERGY_GENERATOR Doc Ref: v2.0 1 July 2015 Page 32 of 35

33 Table 23 AS Payment Summary Table Names COLUMN NAME ASPAYMENT_SUMMARY BILLING_WEEK STATUS REGIONID DEFINITION This specifies the report type - Ancillary Services Payment Summary Report Specifies the year and billing week the ancillary services are recovered. The settlement dates within the billing week can be found from the settlement calendar This refers to the latest statement type for the billing week. The corresponding data is used in the payment calculations The region in which ancillary services payments are made LOWER6SEC Fast Contingency Lower FCAS Payment ($) LOWER60SEC Slow Contingency Lower FCAS Payment ($) LOWER5MIN Delayed Contingency Lower FCAS Payment ($) LOWERREG Lower Regulation FCAS Payment ($) RAISE6SEC Fast Contingency Raise FCAS Payment ($) RAISE60SEC Slow Contingency Raise FCAS Payment ($) RAISE5MIN Delayed Contingency Raise FCAS Payment ($) RAISEREG Raise Regulation FCAS Payment ($) RESTART Restart (SRAS) Payment ($) REACTIVE Reactive (NSCAS) Payment ($) LOADSHED Loadshed (NSCAS) Payment ($) TOTAL_AS_PAYMENT Sum of all ancillary service payments ($) Doc Ref: v2.0 1 July 2015 Page 33 of 35

34 AEMO also publishes a 12 month rolling graph of customer and generator recovery rates. This is also updated with every statement posted (preliminary, final, revision), as is reflected in the graph (see Figure 5 and Figure 6). These recovery rates are published at the regional level. Figure 5 Customer Recovery Rates Figure 6 Generator Recovery Rates Doc Ref: v2.0 1 July 2015 Page 34 of 35

35 Appendix E References Below is a list of ancillary services related documents referred to throughout this guide. These documents are available on AEMO s website: Ancillary Services Causer Pays Contribution Factors: Operations/Ancillary-Services/Process-Documentation/Ancillary-Services-Causer-Pays-Contribution- Factors Constraint Formulation Guidelines: Services/Guides-and-Descriptions/Constraint-Formulation-Guidelines FCAS Constraint Equations: Services/Guides-and-Descriptions/FCAS-Constraint-Equations Guide to Ancillary Services in the National Electricity Market: Descriptions/Guide-to-Ancillary-Services-in-the-NEM NEM Settlement Calendar: Non-Market Ancillary Services: Operating-Procedures/~/media/Files/Other/SystemOperatingProcedures/so_op3708v18.ashx NMAS Recovery Reconciliation Data: Recovery-Reconciliation-Data Regional Benefit Ancillary Service Procedure: Electricity-Market/Closed/Regional-Benefit-Ancillary-Services-Procedure-Consultation Doc Ref: v2.0 1 July 2015 Page 35 of 35