In the past, frequency control ancillary services (FCAS) have provided a lucrative revenue stream for industrial and commercial (I&C) energy users – but recent FCAS prices have seen a significant decline.
In its latest whitepaper, Understanding the decline in FCAS prices, energy technology company GridBeyond explores why FCAS prices have fallen and what businesses can do to recoup lost revenues.
According to the Australian Energy Market Operator’s latest Quarterly Energy Dynamics report, total FCAS costs reached $13 million in Q1 2025, representing approximately 0.3 per cent of the total cost of consumed energy for the quarter.
This marks a $16 million decrease compared to the same period in 2024. The reduction was largely driven by lower FCAS prices and a smaller number of volatility events during the quarter, relative to 2024. In the same time period, BESS (battery energy storage system) output increased by 86 per cent year-on-year in the National Electricity Market, reaching an average of 98MW.
GridBeyond said this significant decline in FCAS prices reflects the impact of increased battery storage capacity and evolving market dynamics.
However, the company said while FCAS prices are decreasing, energy prices will stay high, providing an opportunity for businesses to recoup lost revenues with the right technology.
While falling FCAS prices present a challenge, they also mark a shift in how value is created in the evolving energy ecosystem. There are still strategic pathways for I&C businesses to recoup lost revenue – and that’s exactly what GridBeyond’s latest whitepaper explores.
The key, the company said, is for I&C businesses is to shift from passive participation in legacy markets to proactively stacking value through energy flexibility like demand side response, process optimisation and energy storage.
According to the whitepaper, businesses that embrace this change can recoup lost value and capture even greater returns in the long run.
To learn how, download the whitepaper here.
