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The trick to cutting FCAS costs for solar and wind plants

Owners of wind and solar plants who are struggling to understand or control FCAS costs may be underestimating the power of forecasting technology.

Wind and solar generation technology may have decades of research and development behind them but they are only as reliable as the weather. All it takes are clouds or a ghostly stillness for multimillion-dollar facilities to see their output dwindle.

That’s to be expected. But owners of scheduled wind and solar plants know they are on the hook to fulfil the Australian Energy Market Operator’s supply expectations so it can in turn meet predicted demand. AEMO issues these instructions every five minutes.

But there is a problem.

“Things happen a lot faster than five minutes in an electrical grid,” says Fulcrum3D founder and managing director Dr Colin Bonner.

That’s where the frequency control ancillary services – or FCAS – market comes in, where AEMO measures what the generators are generating and looks at the effect of that aggregate supply on grid frequency. If frequency is above 50Hz then supply is in surplus and demand needs to rise; if it’s below 50Hz supply needs to rise.

“The frequency is an indication of the grid’s health,” Bonner says.

Give and take

Solar farms and wind farms cannot provide FCAS services. Instead, if a generator is told by AEMO to supply so many megawatts of power and does not meet that target, it will be charged “causer pays” FCAS payments to cover what it will cost AEMO to purchase that power elsewhere. “Because that wind [or solar] farm did not do what AEMO told it to do, the rational is that they caused that disruption and they have to pay for it,” Bonner says.

Wind and solar are intermittent, so for them the “causer pays” FCAS system looks a bit cruel. Coal and gas plants will have hardly any problem meeting hard targets, whereas all it takes for a solar or wind plant to fall short is a cloud to float over or the wind to drop.

Historically, AEMO would forecast output for wind and solar farms and issue dispatch targets. “The wind or solar then drops – something natural and perfectly normal happens – and the solar farm or wind farm doesn’t meet AEMO’s forecast.”

Forecasting wind and solar generation is one thing but predicting FCAS costs looks to be just as hard. Forecasts for FCAS costs are often too low in developers’ project plans. What’s perhaps most scary is that some proponents are working on projects with no idea of how the market works.

“We’ve sat down and spoken with developers who weren’t aware of FCAS at all,” Bonner says. “It’s not in their business model at all. There is certainly some learning going on in the industry. They were newer players but they were well into the land acquisition and connection phase of development.”

Bonner says that although the FCAS market has been increasing over the past five years it won’t necessarily keep increasing as renewables supply more power in the grid.

Finer forecasting

For AEMO to instruct a generator to supply a certain output in five minutes’ time it must have an idea of irradiance and wind conditions five minutes in the future. To do this it relies on satellite data.

A few years ago wind and solar farm owners pressed AEMO to suggest they could do a better job of predicting generation than the market operator. That led to AEMO’s and ARENA’s short-term forecasting program, where an asset owner has the option to reduce vulnerability to causer pays by providing their own forecasting. “AEMO doesn’t really have a high-resolution data feed,” Bonner says. “It’s almost impossible to do five-minute power forecasting form satellite at high accuracy.”

That’s where Bonner’s company Fulcrum3D comes in. He says plant owners can do a better job by running their own onsite forecasting systems. “Then they can provide high-accuracy forecasts of what they can generate to AEMO,” he says.

By assuming generation for the next five minutes will be the same as what it is now, AEMO has been “significantly” wrong at certain times of the day for certain solar farms and significantly correct at others, Bonner says.

If there was a perfect forecast at most wind farms, FCAS costs would be about half current levels, he says. For solar farms, if there was a perfect forecast the majority of solar farms would see FCAS costs fall by 80%.

That’s a lot of wasted money.

Data dive

Fulcrum3D’s sodar product is similar to a sonar on a submarine, where technology in a cubic-metre box scatters sound off the atmosphere to measure wind speed between 40 and 200 metres up. Before a wind farm is constructed sodars can be deployed around a site and moved every few months to plot detailed maps of an area, “to reduce uncertainty” for a project.

In its ARENA thesis Fulcrum3D placed sodars 10-15km upwind from a site to measure changing windspeed, to predict ramp rates. Its research suggested the majority of wind farms on the NEM can achieve “a very good forecast” using scada data alone. “There might be a point in the future where upstream monitoring is required, for wind farms, but in the current FCAS market we were able to achieve zero user pays with scada data only,” he says.

Fulcrum3D’s CloudCAM technology identifies, tracks and predicts cloud movement over solar arrays.

Fulcum3D is monitoring 12GW of projects in the pre-build phase and forecasting 2GW of operating wind and solar on the NEM, with another gigawatt expected by late this year.

The company is working with advisory firm Energy Estate to raise $3-5 million for international expansion. In November last year it opened an office in Michigan, a state in the US mid-west well known to historians of soul music and electric guitars, with hopes to have a system in place by June. “There is a massive opportunity to showcase Australian tech,” he says. “And we do have a competitive solution.”

The world is watching Australia to see how renewables are being rapidly integrated into vast and sparse grid, he says. “The technical issues Australia is solving now are the issues other grids will encounter in coming years. It’s fair to say Australia is a testbed for integration of high levels of renewables in a fringe network.”

On the market in general, Bonner says he’s excited about hydrogen (“It’s the way of the future”) and is otherwise busy studying cyber security part-time to understand tomorrow’s tech from the inside out. “In the IoT age – another industry buzzword – we quite often see subpar devices used in applications where they should not be used.”

When your business is forecasting, you had better trust your technology.

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