- An exclusive analysis found at least 36 renewable energy companies have pivoted toward building massive server hubs to cash in on excess generation.
- Nearly 80% of slated districts overlap with traditional lands where communities are unaware of industrial risks to hydrological cycles and biodiversity.
- Government officials marketed the country’s green matrix to global investors while leveraging the power surplus in high-stakes trade talks with the United States.
The global appetite for artificial intelligence is pushing Brazil to lead an unprecedented move in the world regarding data centers. While around the globe, big tech struggles to find energy to power the infrastructures that store and process data, in Brazil the story is just the opposite: Data center proposers come from the power industry itself — more precisely, renewable energy.
An exclusive analysis conducted by The Intercept Brasil and Mongabay (read it in Portuguese) revealed that 65% of the requests to connect data centers to the main power grid originated from renewable energy companies — considering only plans presented to the Ministry of Mines and Energy through December 2025. By that date, 68 connection requests had been reported across 37 Brazilian municipalities.
A combination of factors explains this phenomenon, starting with the extraordinary amount of electricity required to power data centers. The International Energy Agency projects that global data center energy consumption will double in the coming years, potentially reaching 945 TWh by 2030 — equivalent to Japan’s total consumption — with artificial intelligence accounting for 40% of that figure.
With a predominantly renewable energy mix, Brazil has become an attractive destination for data centers. “We are a vast source of opportunities for those looking to invest in the decarbonization of energy mixes,” proclaimed Brazil’s Minister of Mines and Energy, Alexandre Silveira, in January 2025 during the World Economic Forum in Davos, Switzerland — a trip undertaken with the mission of promoting Brazil to global investors, particularly those in the data center sector.
The country currently produces more renewable energy than it can distribute across its territory — a situation that can disrupt the grid and lead to blackouts. Consequently, renewable energy plants are often required to halt generation at the request of Brazil’s grid operator, ONS. This is technically known as “curtailment,” and for companies, it translates into financial loss. In the first half of 2025, curtailment resulted in losses of 3.2 billion reais ($612 million) for the companies.
As voracious and steady energy consumers, data centers are presented as a solution for utilizing surplus electricity that would otherwise go to waste. In 2025, the solar energy company Atlas had to reduce generation at one of its plants in Paracatu, Minas Gerais, by nearly 40% due to curtailments ordered by ONS — by the end of the year, the company presented a plan to the Ministry of Mines and Energy (MME) to build a 1 GW data center complex at the site.
“Aiming to optimize the balance between local supply and demand and mitigate potential generation constraints, Atlas plans to set up a data center in the municipality,” the company explains in a letter to the MME reviewed by Intercept and Mongabay regarding the first of three planned projects.
The Brazilian Wind Energy Association, which represents the industry and companies in the sector within the country, has stepped forward to say that Brazil “offers an ideal setting for the installation of data centers,” citing its electricity matrix —”one of the cleanest in the world” — as the primary advantage. In April, the association hosted a meeting featuring the Brazilian Data Center Association, which brings together data center developers and technology companies, with a panel titled “Data Centers and the Environment: Less Impact Than You Imagine.”
In the view of experts and activists interviewed for this report, the alliance between the two sectors is driven by opportunity and profit — and not necessarily by commitments to the energy transition.
“Renewable energy companies are able to sign long-term power purchase agreements with data centers and Big Tech firms,” said Mikaelle Farias, a renewable energy engineer from the Federal University of Paraíba (UFPB), a specialist in energy geopolitics from the Rio de Janeiro Institute of Research and Technology, and a climate activist. “This guarantees the sale of that surplus for 15 or 20 years without needing to feed it into the interconnected grid or losing the energy.”
Today, data centers are customers who offer greater financial reliability than other sectors, such as automotive electrification, Farias said, and they provide energy companies with higher revenues than they would earn by distributing and selling energy in Brazil.
In response to inquiries from the reporting team, the Ministry of Mines and Energy stated that it “has been working to develop effective public policies to establish Brazil as a major global hub for data center investment” and that the country offers advantages such as “rapidly growing solar photovoltaic and wind power capacity, a long-standing mastery of hydroelectric power, and legal certainty for investors.”
The ministry further stated that the consumption profile of data centers “contributes to better utilization of already installed renewable generation, mitigating generation curtailment due to electricity oversupply — a challenge that currently poses a growing issue for the operation of the SIN [The National Interconnected System (SIN) is the large network that generates and transmits electricity in Brazil].” Read their full response in Portuguese.
Energy bought by data centers is cheaper
Last year, the Brazilian renewable energy sector saw a recovery from the energy contracting crisis thanks to the arrival of data centers.
In November 2025, the wind energy company Serena Energia announced a partnership with NextStream to supply electricity generated in Gentio do Ouro and Xique-Xique, both in Bahia state, to the company’s data centers, including one in Tamboré, in the São Paulo metropolitan area. A year earlier, Serena had already increased its supply to Odata by 135%, in that case utilizing its wind farms in Xique-Xique.
Some data center companies have opted to purchase stakes in energy projects, becoming partners with power generation companies — a model known as “self-production.” In doing so, they act as both investors and consumers of the energy involved.
Scala Data Centers, one of the leading data center companies based in Brazil, formalized “a significant partnership with a renewable energy company, aiming to secure clean energy through a self-production model.” In its 2024 sustainability report, the company states that it will utilize two operational plants in Bahia that are linked to Serena.
“This approach underscores Scala’s position as a shareholder in renewable energy projects, ensuring direct access to a sustainable source,” the company says in its sustainability report.
In direct contracts and self-production partnerships, consumer companies negotiate lower rates directly with the generators. In practice, data centers pay less for energy.
Historically, the cost of directly contracted energy is significantly lower than the tariff paid by regular consumers. While the energy tariff paid by Brazilian consumers rose by 269% over the last 22 years, reaching 310 reais ($59.77) per MWh in 2024, the increase in the free contracting market was 90%, with companies paying 147 reais ($28.34) per MWh in 2024, according to data from a study by the Brazilian Association of Energy Traders (Abraceel) published in June 2025.
Another business model involves companies that previously operated solely in the renewable energy sector amending their articles of incorporation to include the development of data centers. This is the case with Casa dos Ventos, which built and developed TikTok’s data center in Caucaia, in Ceará state, and dozens of other companies; this analysis found that at least 36 companies had filed requests with the Ministry of Mines and Energy for access to the main power grid for this purpose, with timelines extending through December 2025.
One of the companies is Atlas, which is proposing a project in Paracatu.
“Ownership of the new consumer unit — while distinct from those linked to the generation complex — will belong to Atlas, ensuring that both the load and the generation remain under the same economic group,” Atlas wrote in a request submitted to the MME.
This approach offers sustainability for companies too. Estimates from the Brazilian Ministry of Finance suggest that by moving a data center to Brazil, a company can reduce the carbon footprint of its AI processing by up to 75%.
That is why Brazil is so attractive to these companies. The country offers not just energy, but renewable and cheap energy. For big tech firms, it is a way to meet sustainability targets, burnish their reputations and save money.
In an interview with media outlet InvestNews, Rodrigo Abreu, the CEO of Omnia, the company responsible for TikTok’s data center in Ceará, stated that “few countries can compete with Brazil on renewable energy costs.”
“Amidst this entire oil crisis, relying on fossil-fuel-based energy systems poses a huge risk. Recent wars have made this clear. Renewable energy is not only sustainable but also cheap,” said Rárisson Sampaio, a policy advisor at the Institute for Socioeconomic Studies (Inesc) and a member of the Environmental Law Commission of the Brazilian Bar Association (OAB) in Ceará.
“Whether sustainable or not, they were going to sign contracts for renewable energy in Brazil because it is cheaper,” he added.
Brazil has become a bargaining chip in the tariff war
Brazil’s advantage in energy supply became a bargaining chip during the imposition of steep U.S. tariffs against the country. According to Brazil’s Vice President Geraldo Alckmin, data centers were a topic of discussion in meetings with big tech companies during the negotiations that preceded the tariffs taking effect in mid-July 2026.
Brazil plans to grant tax incentives and relief to data centers that meet water efficiency standards, among other environmental criteria. It remains unclear what the country stands to gain from the perks it is willing to offer.
In April, Apex, Brazil’s foreign trade agency, organized a mission to the United States with a clear objective: To attract foreign investment in sustainable data centers.
In June, the United States Embassy held a private event in São Paulo on “innovation and technology in energy distribution” to address topics including, “grid readiness for new demands, such as electrification and data centers.” Officials from the National Electric Energy Agency (Aneel) were invited to join.
“Even though data centers may encourage pockets of renewable energy growth here and there, they do not help us achieve a sensible, intelligent, and well-planned transition away from fossil fuels,” climate analyst Ketan Joshi says.
Data center expansion amplifies existing environmental impacts
Another relevant aspect is the socio-environmental impact of the renewable energy industry, also frequently overlooked under the “clean energy” narrative.
Ever since the arrival of the first wind farms in Brazil’s Northeast region, two decades ago, communities have been denouncing the impacts these projects have on their territories, ways of life and health. It is in this region, which holds the country’s largest renewable energy generation output, a significant portion of the surplus energy generated goes to waste.
Problems begin with the installation of the power plants, involving allegations of land grabbing, deforestation and explosions carried out to accommodate wind turbines and build access roads, which impact both wild and domestic fauna. Residents living near the projects report cracks in their homes linked to the blasts.
During operation, the main impact is the noise from the wind turbines. The disturbance is so frequent that it has been given a specific name: Wind turbine syndrome. It is a condition that manifests as sleep disorders, headaches, dizziness and mental health issues.
In March, residents of the Pernambuco semi-arid region filed a public civil action against wind energy companies, including Casa dos Ventos, and the state government regarding the installation and operation of a complex comprising eight wind farms and 126 turbines spanning four municipalities.
A bill is currently making its way through the legislature in Paraíba that would mandate a minimum distance of 1.5 kilometers (0.9 mile) between wind turbines and residences, schools or other public facilities. If passed, this would be pioneering legislation. Currently, there are no such protections in Brazil for communities located near these projects.
Even so, climate activist Farias warned that there is a risk of problems worsening across the northeast with the expansion of renewables and the arrival of data centers.
There is yet another layer that adds complexity: findings of this report indicate that at least 29 municipalities where data centers are planned contain Quilombola (traditional communities founded by former enslaved Afro-Brazilians) territories with regularization processes underway via Brazil’s land reform agency, Incra, or Indigenous lands (either demarcated or under study). In other words, 78.3% of the 37 municipalities slated for data center installations contain one of these types of protected territories that are either regularized or currently undergoing regularization.
One of these municipalities is Gentio do Ouro, a city of 11,000 citizens in Bahia state that is home to a Quilombola community awaiting land titling from Incra. There, the company Serena requested authorization from the Ministry of Mines and Energy to connect nine data centers. At least one is already operational. Mongabay and Intercept Brasil contacted the company but received no response as of publication.
Incra stated that, so far, it is monitoring only one case in the municipality of Caucaia, where TikTok is building a data center, and that the process is currently at the stage of analyzing potential overlap with Quilombola communities. The institute added that it has not participated in “conferences, forums, or inter-institutional dialogue spaces specifically dedicated to discussing the expansion of data centers in the country.” Read Incra’s full response in Portuguese.
“Renewable energy is not infinite — it has social constraints, it has physical constraints, it has environmental impacts and it also has political capital behind it so you have to use it wisely,” Joshi said.
For the climate analyst, who currently lives in Norway, this corporate strategy is not new. “Companies say, ‘Look how we are unlocking this renewable energy,’ but they don’t specify the intended use. Why didn’t you build a transmission line or a battery or something to have that energy be used by society and to displace fossil fuels?” he said.
“Powering data centers with renewable energy is not the goal. The goal is ensuring that we protect human society from the dangers of unsafe energy like coal and gas and like burning petroleum in the transport system.”
Data centers could drive up electricity bills for Brazilians
Beyond the socio-environmental effects, the model data centers are adopting amidst their proliferation, which includes entering into contracts or partnerships with electricity generation companies, could have a direct impact on Brazilians’ finances.
Although this strategy lowers energy costs for technology infrastructure, it can drive up electricity bills for the broader public. This arises because large clients migrate to the free market (based on direct contracting), trimming the total number of consumers in the closed market, the segment tied to local distribution companies.
The closed market comprises consumers who pay electricity bills to local distributors, such as Enel. Large consumers — such as industrial facilities and, more recently, data centers — typically operate in a different market: The free market, where they purchase energy directly from producers.
Consumers in the free market are exempt from certain charges, like tariff flags, and benefit from discounts on others, such as distribution system fees. With fewer people sharing the overall cost, the individual cost borne by closed market consumers rises.
What’s more, given the enormous amount of energy required to power data centers, the transmission system needs to be reinforced to accommodate these facilities; otherwise, the grid risks failing to handle the heavy loads. In practice, however, the costs of these infrastructure upgrades — which are becoming increasingly critical as more data centers connect to the main grid — are being passed on to consumers.
This point was raised by utility companies Enel and EDP during a public consultation held by Aneel regarding improvements to the rules for accessing the electric power transmission system.
Enel stated that, since the current transmission system lacks rules regarding the costs paid by those connecting to the grid, “expansion costs end up being socialized among all consumers —including those who do not directly benefit from these projects — creating regulatory asymmetry and unwanted cross-subsidies.”
As an example, the company cited the connection of a large data center in the São Paulo metropolitan area that is requiring structural upgrades at a substation. “Although this need stems from a single connecting party, the costs tend to be passed on to consumers across the entire system — an approach that is not appropriate from the standpoint of efficiency and equity,” Enel stated.
EDP made a similar point, highlighting that “the growth of new large-scale developments — particularly data center projects, green hydrogen, and other electricity-intensive loads — has in many cases required significant reinforcements and expansions of the transmission grid to enable access; the costs of these upgrades end up being socialized among all system users, even though they stem from the specific needs of certain parties seeking access.”
In practice, this means that ordinary consumers are footing the bill for infrastructure projects to enable data centers owned by private companies — many of them foreign — to connect to the main grid.
In response to inquiries, Aneel stated that the costs of any necessary reinforcements or expansions beyond the connection point, within the transmission infrastructure known as the “Basic Grid,” are shared among all system users, and that this applies to everyone, whether they are mining operations, data centers or distribution utilities.
The agency also reported that submissions received during the public consultation process are being analyzed by its technical staff and that, to date, no cost-allocation issues caused by data centers have been identified. Read their full response here in Portuguese.
In the United States, home to the vast majority of the world’s data centers, few issues unite Americans from across the political spectrum quite like data centers: Seven out of 10 people oppose their construction in their neighborhoods, according to a Gallup poll from March. The topic has already become a campaign issue, with candidates attempting to capitalize on sentiments both for and against data centers.
One of the main reasons for the discontent is precisely the skyrocketing energy bills resulting from the installation of these mega-infrastructures.
In late July, U.S. President Donald Trump announced that more than 200 companies, including utility providers, had signed an agreement to prevent electricity prices from rising due to data centers. While the agreement appears to be symbolic and difficult to implement given the current U.S. power distribution system, it signals that Trump has recognized this as a critical issue that voters will take to the polls in the midterm elections scheduled for November.
This story was published in partnership with The Intercept Brasil, with support from the Pulitzer Center’s AI Accountability Network. Read it in Portuguese on The Intercept Brasil or Mongabay Brasil.
Banner image: Wind turbines in the state of Ceará, Brazil. Image by Vitor Paladini via Unsplash.
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Cite this article
Francisco Amorim, Laís Martins, Naira Hofmeister (2026). Brazil’s unique data center boom rides on clean power despite social burden. Mongabay Conservation news. DOI: https://doi.org/10.66709/news-326903
