This report sets out the objectives of the Double-sided Causer Pays study as well as an overview of frequency control and its status in the NEM. It highlights the key issues to be evaluated and sets out a methodology and detailed work programme.
This is the second of a set of four reports to be prepared under an AEC/ARENA supported project to study the theoretical and practical bases for a specific implementation of Frequency Deviation Pricing (FDP), known as Double-Side Causer Pays (DSCP).
The Inception Report set out how the project team intends to approach the project, setting out the intended steps in detail.
The current report outlines the theoretical basis for FDP and how it could be implemented as DSCP. Specifically, we also examine some critical implementation issues with a view to resolving or at least clarifying and quantifying them in the set of analytical studies to be covered in the analysis report.
This report outlines a model, the Linear-Quadratic Regulator (LQR) Model of the electricity system which, when extended to support inputs from available measurements, provides a robust foundation for FDP and the DSCP analysis. Computer code has been developed which, when further enhanced with additional reporting and realistic data, will be used for the studies in the next phase of the project.