Frequency Keeping

Frequency keeping services are required to manage short term supply and demand imbalances to ensure that the system frequency is maintained at or near 50 Hz.

Multiple Frequency Keeping (MFK)

This service is provided by one or more generating units capable of quickly varying their output in response to instructions from the System Operator.

Multiple frequency keeping is procured on the following basis:

  • an availability fee, which is a fixed dollar amount paid for each half hour the provider performs the service; and
  • variable costs through constrained on and off payments designed to compensate the service provider for any foregone energy market revenue.

Back-up Single Frequency Keeping (Back-Up SFK)

We also procure Back-Up SFK from providers who can independently monitor frequency and adjust their output, without instructions from us. Back-up SFK only takes effect if we have a problem with the tools that deliver multiple frequency keeping.  Back-up SFK is procured on the basis of a monthly availability fee.

Costs

Frequency keeping costs are paid by purchasers of electricity on a national basis, proportional to their share of grid offtake quantities (see clause 8.58 in the Code for details). For the year to 30 September 2015, the costs for procuring frequency keeping were approximately $14 million.

Net purchase quantity assessment

The range over which FK providers must be able to adjust their output is known as the frequency keeping band.  We determine a frequency keeping band to be applied to each island for each trading period. As at November 2015, there is a 20 MW band in the North Island and a 10 MW band in the South Island.  From 1 May 2016, this changed to a 15 MW band in each island.  Where we propose to deviate from these quantities for a trading period(s), we advise market participants in advance via a Customer Advisory Notice (CAN).

Frequency Keeping Band

The minimum frequency keeping band is currently 8 MW (±4 MW).

Related  Documents

System Operator standard contract terms for Multiple Frequency Keeping [ pdf 363.98 KB ]
System Operator standard contract terms for Back-up SFK [ pdf 359.54 KB ]
Backup SFK Routine Testing [ pdf 440.39 KB ]
GL-EA-010 Companion Guide for Testing of Assets [ pdf 1.43 MB ]