Firm Energy

Firm energy (garantia física) determines the maximum volume of energy that a generation unit can sold at a given reliability level.

It is an important metric for the the system power supply adequacy and is used for two fundamental purposes in Brazil: the physicalenergy guarantee defines the maximum amount of energy that an unit can commercialize and, in the case of hydroelectric power plants, it defines its share in the Energy Reallocation Mechanism (MRE).

The Firm energy calculation of the generation projects, as well as their reviews, are EPE responsibility and follow specific methodologies and criteria defined by specific regulations.

For example, in the case of hydroelectric projects, and thermoelectric projects that have non-zero variable unit cost (CVU), centrally dispatched by the system operator (ONS), firm energy is a function of each individual contribution to the maximum amount of energy able to be supplied by the system as a whole, given the supply reliability level. The system's firm energy calculation criteria and its share between the units are available in specific regulation. In the case of wind and solar projects, the firm energy is calculated based on generation data certified by independent entities.

In the case of non-centrally-dispatched power plants, the firm energy of a hydropower project is calculated based on technical characteristics of its basic project, while for the other plants with zero CVU, the calculations consider monthly statements of energy availability of the responsible agent, observing eventual physical restrictions for energy generation.

By law, the firm energy of hydroelectric power plants must be reviewed every five years (ordinary review) or in the occurrence of relevant facts (extraordinary review).

The firm energy ordinary reviews (the first general review occurred only in 2017) aim to adjust the firm energy of all power plants due to the evolutions of the system, either by improvements in their representation, computational models, availability of data or others parameters (risk aversion and cost of deficit).

In the case of the firm energy extraordinary reviews, the set of relevant facts, the rite and the methodology are all disciplined according to MME definitions. Among the set of relevant facts are project changes or interventions for modernization and increase of power, either as initiative of ANEEL or the concessionaire. The calculations for such reviews preserve the same methodology applied to new hydroelectric power plants.