EnergyAustralia has paid $750,000 in infringement notices for alleged breaches of its obligations to provide frequency control ancillary services (FCAS), which help keep the electricity grid stable and prevent disruption of electricity supply.
Registered participants that offer FCAS must comply with the National Electricity Rules and be able to fulfil offers they make to the Australian Energy Market Operator (AEMO).
The Australian Energy Regulator (AER) issued 10 infringement notices to EnergyAustralia, alleging that, on multiple occasions during 2023 and 2024, EnergyAustralia:
- failed to ensure that four of the battery energy storage systems it manages in NSW and VIC could fulfil FCAS offers submitted to AEMO, or
- failed to ensure these four battery energy storage systems complied with FCAS dispatch instructions from AEMO.
AER Deputy Chair Justin Oliver said the penalties send a clear message that market participants must be able to deliver the services they offer.
“Frequency control ancillary services are a crucial part of the safety net that keeps the power system stable and secure, preventing blackouts and protecting electrical equipment from damage.
“As batteries take on a greater role in the electricity system, operators must understand their operating limits, make accurate offers and comply with AEMO’s dispatch instructions. It is important that market participants regularly monitor their assets and systems to ensure they are operating correctly.
“Providers of frequency control ancillary services must be ready and able to deliver these services and meet their obligations when called upon, or face enforcement action,” Mr Oliver said.
The alleged breaches came to light after AEMO requested frequency control data from market participants following the February 2024 Victorian storms.
EnergyAustralia subsequently self-reported the alleged breaches and worked constructively with the AER throughout its investigation. EnergyAustralia has also repaid AEMO the money it received to provide the services.
Supporting power system security and an efficient wholesale electricity market is one of the AER’s Compliance and Enforcement Priorities for 2026–27. The AER will continue to monitor whether market participants are meeting obligations that help keep the power system secure.
This is the AER’s fourth enforcement outcome relating to FCAS since 2019, and the first relating to EnergyAustralia.
Notes
Frequency control ancillary services (FCAS)
Frequency control ancillary services help maintain the power system’s frequency close to 50 hertz by rapidly adjusting supply or demand when the system becomes unbalanced.
Previous FCAS-related enforcement outcomes
In October 2023, the Federal Court ordered two AGL subsidiaries to pay penalties totalling $6 million for breaches of the National Electricity Rules relating to FCAS offered from the Bayswater and Loy Yang power stations.
In June 2022, the Federal Court ordered Hornsdale Power Reserve to pay a $900,000 penalty for breaches relating to contingency services offered from its battery.
In 2021, CS Energy paid $200,000 in infringement notice penalties for allegedly failing to ensure it could provide FCAS it had offered to the market.
Infringement notices
Payment of an infringement notice penalty is not an admission of a contravention of the National Electricity Rules. The AER can issue an infringement notice where it has reasonable grounds to believe a person has contravened a civil penalty provision.