Frequency Performance Payments (FPP) are going live in the NEM on 8th June 2025. FPP replaces the old Causer Pays methodology for allocating the costs of FCAS Regulation. It also provides new incentives for units in the NEM to support grid frequency.
This article explains how the new incentive methodology works. It also discusses the impact it could have on the grid and battery energy storage.
Executive Summary
- Frequency Performance Payments launch in the NEM on 8 June 2025, introducing new incentives for scheduled generators, loads and storage to support grid frequency.
- FPP enhances the existing ‘causer pays’ model for Regulation FCAS by also rewarding units that help restore frequency to 50 Hz.
- Payments or charges are based on each unit’s deviation from their dispatch trajectory, measured every 4 seconds, and scaled by FCAS Regulation prices.
- For batteries, FPP could improve the value of Regulation FCAS and support higher cycling rates — but the actual financial upside depends on market pricing.
What are Frequency Performance Payments?
Frequency Performance Payments, or FPP, is the new methodology for assigning the costs of FCAS Regulation in the NEM. Significantly, it also brings in a new incentive for operations which support grid frequency. FPP goes live in the NEM on the 8th June 2025.
FPP will apply to all scheduled generators, loads and bidirectional units (which includes batteries). It will also apply to all semi-scheduled generators.
The introduction of FPP essentially does two things: