Entry · Market
Physical guarantee
How much energy can a project use in contracts?
Acronyms: EPE, Energy Research Office; MRE, Energy Reallocation Mechanism; CCEE, Electric Energy Trading Chamber; GSF, Generation Scaling Factor, the MRE adjustment factor.
In one sentence
Maximum amount of energy of a generation project, defined by the Ministry of Mines and Energy, that can be used to prove load coverage or for trading through contracts.
Real example
In Aug 2026, the MRE plants generated 40,397 MWavgNature of the data: Calculated against a physical guarantee modulated and adjusted by the availability factor of 51,185 MWavgNature of the data: Calculated: in the month, they generated less than the physical guarantee. The ratio between the two is the GSF published in the panel.
No Check this number record of its own in this example: the number comes from the panel's published database, which carries the source and the reference date.
Calculated: Deterministic transformation made by Scrutiniums, with a published formula.
Why it matters
How it is measured
In the observatory, the physical guarantee of the MRE plants appears in average MW in the CCEE datasets, modulated and adjusted by the availability factor, as the denominator of the GSF; that of each plant is not published here.
Unit: average MW
Not to be confused with
MRE (Energy Reallocation Mechanism)
Physical guarantee is an energy limit of each project; the MRE is the mechanism through which hydropower plants share hydrological risk, and it does not define anyone's physical guarantee (see MRE).
Physical guarantee is not generation: the plant might generate more or less than it each month.
GSF (Generation Scaling Factor (MRE adjustment factor))
The GSF compares, month by month, the generation of the MRE plants with their physical guarantee. A GSF below 100% says that generation was below the physical guarantee, not that the physical guarantee fell (see GSF).
What cannot be concluded
- Physical guarantee is not generation: the plant might generate more or less than it each month, and it is this difference, across the MRE hydropower plants, that the GSF measures.
Related entries
In the learning paths
See in the panel
Official source
Presidency of the RepublicDecree No. 5.163 of Jul 30, 2004, art. 2, item I (consolidated text, wording in force on Oct 6, 2026)
In other words: whoever sells energy needs backing for one hundred percent of the contracts.
Literal excerpt from the document
Portuguese only“I - os agentes vendedores deverão apresentar lastro para a venda de energia para garantir cem por cento de seus contratos;”
Presidency of the RepublicDecree No. 5.163 of Jul 30, 2004, art. 2, § 1 (consolidated text, wording in force on Oct 6, 2026)
Literal excerpt from the document
Portuguese only“§ 1 º O lastro para a venda de que trata o inciso I do caput será constituído pela garantia física proporcionada por empreendimento de geração própria ou de terceiros, neste caso, mediante contratos de compra de energia.”
Presidency of the RepublicDecree No. 5.163 of Jul 30, 2004, art. 2, § 2 (consolidated text, wording in force on Oct 6, 2026)
In other words: the physical guarantee is the energy ceiling that a project can use to prove load coverage or to sell in contracts, defined by the MME in the grant act.
Literal excerpt from the document
Portuguese only“§ 2 º A garantia física de energia de um empreendimento de geração, a ser definida pelo Ministério de Minas e Energia e a qual deverá constar do contrato de concessão ou do ato de autorização, corresponderá à quantidade máxima de energia elétrica associada ao empreendimento, incluída a importação, que poderá ser utilizada para comprovação de atendimento de carga ou comercialização por meio de contratos.”
Presidency of the RepublicDecree No. 5.163 of Jul 30, 2004, art. 2, § 3 (consolidated text, wording in force on Oct 6, 2026)
Literal excerpt from the document
Portuguese only“§ 3º A garantia física de empreendimentos de geração será revisada periodicamente e calculada pela Empresa de Pesquisa Energética - EPE conforme diretrizes e metodologias estabelecidas pelo Ministério de Minas e Energia.”
Documents accessed and text checked on Oct 6, 2026.