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To understand how the country is positioning itself in the race for the multi-billion-dollar investments that data processing is expected to attract in the coming years, pv magazine spoke to Carolina Rennó, partner at TSE Consulting. Investors interested in bringing data centers to the country are looking for both the availability of renewable energy and future scalability, with Brazil’s different regions representing different opportunities and challenges. Debates about the growth of data centers, especially in light of the race to develop artificial intelligence, heated up this week with the announcement of a multi-million dollar US investment plan for the sector, with an emphasis on solar energy as a source of energy supply, and the announcement of the results obtained by a Chinese AI. This technological dispute represents a huge opportunity for renewable generation, because the demand for electricity from these developments is massive. In 2024, for example, Microsoft signed one of the largest corporate power purchase agreements (PPAs) for renewable energy in history, for more than 10.5 GW of capacity in the United States and Europe, the construction of which will require more than 11.5 billion dollars. With plenty of renewable energy, Brazil has also been preparing to attract this segment. In the country, potential investors are looking for sites close to where there is surplus generation, on the one hand, and also close to the load, with an interesting location signal for the grid tariff, says Ana Carolina Rennó Guimarães, partner at TSE Consulting, which has been advising those interested in bringing data centers to Brazil. According to the consultancy, potential investors are looking for both proximity to the energy load, in large consumption centers, and future scalability, which represents advantages and disadvantages for the different regions of the country. Connection availability and project scalability The two main concerns about integrating large data centers into the Brazilian power grid are the connection to the distribution and transmission networks and the lengthy process of accessing the grid. Rennó notes that the US is already facing network stability issues due to the large-scale adoption of data centers, and that Brazil needs to proactively address this issue before it becomes a serious problem. “Grid infrastructure is a problem in Brazil and the rest of the world. Our difficulty is the size of Brazil, which, compared to other countries, creates the need for more organized infrastructure planning. There are large lines and large blocks of power. These loads usually tend to enter or request access to the Southeast/South region, which are already loaded regions from a load perspective and where the management of this infrastructure is more complex,” says the consultancy. It says that these regions are also attractive due to their population density and the supply of dedicated and specialized labor, as well as their production capacity. However, they have less land available, which can jeopardize the future scalability of projects. In addition, Rennó highlights the current long process to obtain licenses and authorizations, which can hinder the rapid growth of the industry in the country. What we see today is that there is a mismatch between the chronological need for this type of load, which is exponential, and the normal capacity of the system to generate the necessary infrastructure. It is a challenge for EPE, the Ministry of Mines and Energy, Aneel and the ONS to see this new context of exponential demand and be able to meet it with quality. Great renewable potential and an organized sector Despite the challenge of planning the connection of these large loads, Brazil has several advantages to attract investments in data centers. The TSE Consulting partner mentions the clear rules for the energy sector; the countrys large renewable energy potential, which offers competitive energy for projects and compliance with ESG objectives; and the countrys capacity to host investments in large-scale data centers. It is easier to approve investments in places where there are better infrastructures to supply these inputs to data centers. These large consumption blocks could be in regions closer to generation, such as the Northeast, says Rennó. She says it is possible that in a second wave of data center investments in the country, the Northeast region will be more sought after because it concentrates the supply of renewable energy and has more available land. “Today we are looking at data centers, but we are still not thinking about the volume of data processing that AI is going to bring. When AI is really inside data centers, this growth in workload is going to be absurd. And then I think there will be a second wave of placing these data centers near regions where there is more generation.” Key points for integrating large data centers into the Brazilian power grid Plan for exponential growth: Data centers grow rapidly, making it difficult to plan for the necessary infrastructure. Ensuring commitment: It is difficult to ensure that companies requesting connections carry out their projects, resulting in wasted infrastructure investments. Managing load fluctuations: Data centers have high and often unpredictable power demands, which can lead to network instability. Ensure network stability: A sudden shutdown of a large data center can significantly impact network stability and lead to outages. Balancing regional development: While the Southeast is currently the primary focus of data center development, the Northeast offers scalability potential and lower costs, but requires careful consideration of its unique challenges. |
