FCAS Explained: How to Get Paid to Help the Grid

This month, we sat down with Smart’s Solutions Engineer, Peter Whitehouse, to dive into the ins and outs of the Frequency Control Ancillary Services (FCAS) market. In this blog, we’ll explain what FCAS is, why it’s important, and how your business can benefit from participating in this growing opportunity.  

1. What is FCAS?

FCAS stands for Frequency Control Ancillary Services. In simple terms, it’s a way for people and businesses connected to the electricity grid to earn money by helping keep the grid stable.   

Think of the grid as a tightrope walker balancing at 50 Hz. When it wobbles, FCAS acts like a steadying pole to keep everything on track. If you have the right equipment—like a battery, generator, or even certain types of electrical loads—you can play a part in stabilising the grid and get paid for it.

2. Why Does FCAS Matter?  

Grid stability is crucial for ensuring smooth power supply and for keeping the grid’s generators in sync.  When there’s too much power or not enough, the frequency can swing out of control. These swings happen more often now because renewable energy—like solar and wind—is being added to the mix. Renewables are clean and abundant, but they’re also variable. A big solar farm might suddenly produce less power if a cloud passes over, or demand could unexpectedly surge.   

These moments of imbalance put the grid under strain. To counteract this, the Australian Energy Market Operator (AEMO) pays businesses and individuals to be ready to step in and stabilise the frequency when needed.   

3. How Does FCAS Work? 

To keep the grid stable, FCAS relies on quick responses. Participants in the FCAS market either add energy to the grid (to raise the frequency) or take energy away (to lower the frequency).   

How do they do this? That depends on the technology and the contributor. 

• Generators. Diesel or gas generators can boost supply when the frequency drops.   

• Big energy users. Factories or businesses can reduce their power usage temporarily to ease demand and help lower the frequency.   

• Batteries. These are the all-stars. Batteries can charge or discharge quickly, responding in both raise and lower markets.   

Recently, AEMO introduced the “Very Fast” FCAS market, which requires participants to respond in less than a second. This is the most lucrative market and perfect for batteries because of their lightning-fast response times.   

4. What’s the Earning Potential? 

Grid events that require FCAS are rare, happening just a few times a year. However, participants are paid for being ready, even if they’re not called into action.   

Participating in FCAS can make energy storage systems much more profitable. On average, you could earn around $250,000 per megawatt of battery capacity each year.   

Combining FCAS with other strategies—like trading energy on the wholesale market or reducing peak demand charges—can dramatically improve the payback period for batteries.   

Here’s how payback timelines compare:   

- Solar system alone: ~5 years   

- Solar + battery: ~12 years   

- Battery with FCAS: ~4–6 years   

5. Who Can Participate in FCAS?

If you’re connected to the National Electricity Market (NEM) and have room for a battery or other equipment near your main switchboard, you’re in a good position to participate.   

Businesses with flexible energy use or high peak demands are particularly well-suited. For example:   

- Flexible loads. Equipment like heating systems or machinery that can briefly power down without disrupting operations.   

- High demand charges. Sites that pay a lot for peak power can offset costs by participating in FCAS. 

6. How Do You Get Started?

Getting set up for FCAS is simpler than you might think. It usually involves adding metering and controls to your site’s main switchboard. After that, orchestration service providers like PowerSync take care of the heavy lifting.   

PowerSync specialises in managing energy assets for FCAS markets. Their system ensures your business operations come first while maximising FCAS revenue. They also handle all the market interactions, so you don’t need to change energy retailers or worry about managing the system yourself.   

7. Why Should You Care About FCAS?

- FCAS significantly shortens the time it takes to recover the cost of a battery system, resulting in a better payback for your business.   

- It’s low effort - once set up, the system runs automatically with little input from you.   

- You’ll contribute to a more stable and sustainable electricity system while benefiting financially.   

- Your battery won’t wear out faster than it would with normal solar and storage use, because FCAS involvement typically uses only around 10 minutes of battery capacity per year. 

Ready to Explore FCAS for Your Business?   

The team at Smart Commercial Solar can analyse your site to see how much you could save by joining the FCAS market. Get in touch today and discover how FCAS can transform your energy strategy!