| Work Detail |
The Ministry of Mines and Energy has received requests for connection to the basic transmission network for a total of 9 GW, while CPFLs distribution network has received connection requests for a total of another 3 GW. Sector players warn that the procedures for connecting the projects, most of which represent new demand for renewable energy generation, are longer than the window of opportunity to attract data processing centres.
Brazil already has at least 12 GW of demand for grid connection capacity from data centers. The Ministry of Mines and Energy alone has mapped 9 GW of requests for connection to the basic transmission network. In addition, energy distributors can also receive requests in their concession areas to connect projects to the distribution network in locations bordering the basic network.
Requests to connect data centers to the distribution network of Companhia Paulista de Força e Luz (CPFL) already amount to more than 3.5 GW, according to the general director of CPFL Energia, Gustavo Estrella. In a webinar held by the Energy Research Company on the subject, the executive said that until August, between the areas of CPFL Paulista and Piratininga, there were almost 2 GW of orders.
“It has practically doubled since August, which shows the strength and speed of this industry. So we have the challenge of understanding what to do, from the energy sector side, to serve this industry,” Estrella said. However, he points out that the standard procedure for analyzing requests takes longer than the needs presented by customers. “For these 3.5 GW, we internalize the information, we look at the sites for which the customer requests connection, we do a case-by-case study. This process does not fit the needs of the industry and we have an open window for attraction that will not remain open forever.”
For the CEO of CPFL Energia, if Brazil decides to become a data processing hub and attract this industry, it is necessary to create a special or differentiated treatment for projects to access the transmission and distribution network.
“If we make the necessary investment in transmission and distribution to make 2 GW of additional capacity available, in the worst case scenario where no company comes forward to actually connect the data centres, the impact on tariff would be 0.1%,” he says. “Our risk is relatively low from a tariff impact perspective and also very small from the perspective of no one taking the capacity if it becomes available.”
Currently, regulations require distributors not to over-contract the transmission system. “When a request comes here, I am afraid of over-contracting my MUST, when I have a frustration of 100 MW in x region of my concession area, it will exceed my MUST, there is no way. So I am very conservative. This means a delay in the process, which is not compatible with the expectation of attracting this industry.”
In addition, he stresses, these projects represent the creation of a new demand for renewable energy. “[Satisfying a demand for data processing for export] is nothing more than exporting energy. Today we have a 20% excess supply, it is our opportunity to increase consumption by exporting clean energy. That is what this industry demands, its clients demand clean energy Google, Microsoft, Amazon, when they ask me for energy they ask me for clean energy or energy with I-REC, or proven renewable energy.”
National policy to attract data centers
Ministerial representatives pointed out the need to create a national policy to attract data centres that addresses not only these energy bottlenecks, but also fiscal ones, and that contemplates the development of a local chain of products and services, with a reduction in imports.
Igor Marchesini, special adviser to the Ministry of Finance, said that 60% of Brazils data processing needs are currently covered by foreign services.
For him, a successful national policy will lead Brazil to become not only a reference for sustainable data centers, without water consumption, 100% renewable energy consumption, energy efficiency, without noise, with a proven social impact, but will also give the national digital ecosystem a competitive advantage, "because it has to be cheaper to run and train an AI model in Brazil than abroad, and we are trying to design the policy around that."
The general coordinator of AI and emerging technologies at the Ministry of Industrial Development and Trade (MDIC), Alause Pires, said the ministry is looking at the development of the entire chain, downstream, with IT teams, and upstream, including cloud services.
“We have seen a depletion of the service capacity of the world’s major data centres. In some US states, we have seen a wait of up to eight years for the installation of these data centres. And at the same time there is an increase in demand for artificial intelligence services,” observes Pires. He believes that the scenario puts pressure on the data centre industry in terms of its water and energy consumption, and that the use of these national resources must be accompanied by compensation. “Brazil has clean energy and resources to serve this industry, but are we going to bring them at any price? One of the pillars of our proposal is to densify this production chain and reduce dependence on imports. At MDIC we have been thinking about a label for Brazilian data centres, which takes into account the energy efficiency of the equipment, the efficient use of water resources and noise reduction.”
Incentives to reduce water consumption and strengthen the local supply chain are some of the criteria that the National Bank for Economic and Social Development (BNDES) could take into account when granting financing to data center projects interested in setting up in Brazil. Natasha Gallota, head of the Department of Products and Development of Productive Chains at BNDES, pointed out that most of these projects are accompanied by renewable generation projects, which already have specific conditions and financing lines from the bank.
The president of the Brazilian Association of Data Centers, Renan Lima Alves, stressed the short term for the implementation of these policies. “The opportunity we see today is short-term. The locations of the training data centers are being chosen now. If we cannot take advantage of this opportunity in two or three years, these data centers will be moved to Colombia, India or Australia. Brazil really has a number of attributes that are unique at the moment, to attract an industry with very high added value and per capita income. But if we do not have a State policy, we will lose out compared to other countries,” he said. “The transmission that requires an auction is not going to solve our problem in two or three years,” he warned. |
