Changes to the technical rules around how the
electricity system is operated could lead to lower prices for
customers. In short, the rule changes will promote greater
competition in the market for frequency control ancillary services,
or FCAS (don't worry, explained below).
For the electricity network to function correctly supply and
demand must be balanced constantly. One element of this is
controlling the frequency of the electricity in the network so that
it remains within guidelines.
AEMO is responsible for controlling frequency in the electricity
network, and does this by purchasing FCAS from organisations that
are registered with it. When the frequency in the network is too
low electricity generation is increased or demand on the system is
reduced (for instance a factory might reduce its electricity usage
temporarily). When the frequency is too high, generation is
reduced. AEMO pays for these services, and that cost is ultimately
passed on to customers.
