By Leticia Fucuchima
Negotiations for Crypto Mining in Brazil
Crypto mining firms are actively seeking contracts with Brazilian power companies, like Renova Energia, to utilize the country’s surplus renewable energy. This would take place without straining the grid during peak demand.
Following Tether’s recent investment announcement in Brazil, at least six negotiations are underway involving small to medium enterprises, alongside a larger project aiming for 400 megawatts (MW), according to representatives from various companies.
Crypto mining operations, which typically draw heavily on electricity, have led to grid overloads in various nations. However, given Brazil’s minimal current mining activity, these operations could assist in alleviating the country’s ongoing clean energy oversupply dilemma, costing energy firms nearly $1 billion over the past two years.
Tether’s Investment and Renova’s Project
Tether is focusing on its recent acquisition of Adecoagro to leverage renewable energy sources, such as electricity from sugarcane mills, to fuel a bitcoin mining venture in Brazil.
Renova has announced a $200 million mining project in Bahia for an undisclosed client. The 100-MW project will consist of six data centers powered by a wind farm, marking one of the first major investments in the Brazilian crypto sector.
Flexible Energy Consumption
Crypto miners have the ability to quickly adjust their energy usage based on availability, providing a flexible solution for surplus energy during peak demand times. Brazil’s energy oversupply is largely the result of government incentives that fueled growth in wind and solar energy, leading to the waste of up to 70% of generated power.
Opportunities and Industry Interest
Companies like Enegix are exploring deals in Brazil’s northeast, focusing on solar and wind energy opportunities. Other firms, such as Paraguay-based Penguin and China’s Bitmain, are also investigating potential projects.
Energy providers, including Casa dos Ventos and Engie’s Brazilian subsidiary, are keen on crypto ventures. They see crypto miners as valuable clients and are exploring various models such as equipment purchases for independent mining operations.
Challenges Ahead
Despite the potential, concerns exist surrounding water usage in drought-prone areas with significant energy surplus, and the overall lack of regulations for cryptocurrency mining in Brazil. The journey to access energy through these initiatives has proven challenging for many companies.
(Reporting by Letícia Fucuchina in Sao Paulo; Additional reporting by Elizabeth Howcroft in Paris and Samuel Chen in Shanghai; writing by Manuela Andreoni; Editing by Marguerita Choy)
