By Leticia Fucuchima
SAO PAULO (Reuters) – Cryptocurrency Mining Companies are actively negotiating contracts with Brazilian energy generators, such as Renova Energia, to take advantage of the country’s renewable energy surplus without overloading the power grid during peak periods.
In the wake of the Gigante Tether Gigante Investment announcement in July, there are at least six in progress negotiations for small and medium -sized projects, as well as a larger venture of up to 400 megawatts (MW), according to sources from six different companies heard by Reuters.
Although mining machines, which solve complex mathematical problems to validate cryptocurrency transactions, have overloaded electrical networks in many countries, in Brazil – where the activity is still incipient – they can help solve a chronic clean energy problem, which has cost nearly two years of generation companies over the past two years, according to sectoral association calculations.
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Tether, the world’s largest digital asset company, said it will take advantage of Adecoagro’s recent acquisition to use renewable sources, such as energy from sugarcane operations, in a bitcoin mining project in Brazil.
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Renova told Reuters that it is developing one of the first major investments in the crypto mining sector, a $ 200 million project for an unveiled customer in the state of Bahia. The venture of about 100 megawatts consists of six data centers that will be fed by an already operational wind farm.
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“We sought to expand the company and enter new markets,” said Renova CEO Sergio Brasil. “We realized that by providing all the infrastructure (for crypto mining), we were a step ahead of our competitors.”
Cryptocurrency mining companies can quickly scale their operations according to energy availability, offering a flexible consumption base for energy surplus without overloading the network at peak hours.
Excessive energy in Brazil is the result of years of tariff incentives that have boosted investments in solar and wind energy. However, the pace of generation development has exceeded the expansion of transmission infrastructure, and some plants are giving up to 70% of the generated energy.
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“There is a huge potential,” said John Blount, one of the founders of Enegix, a Kazakhstan -based cryptocurrency mining company to Reuters. “We will try to develop mobile data centers,” he added, noting that the facilities would be connected directly to the plants.
Enegix is evaluating agreements in the Northeast, a region with greater energy surplus, including the use of solar and wind energy in Piauí.
Penguin, based in Paraguay – one of the largest cryptocurrency mining centers in the world – is also negotiating projects in Brazil, but preferred not to disclose details.
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Chinese Bitmain, one of the largest mining equipment manufacturers, is also exploring opportunities in the country, according to an executive who called for anonymity to discuss private negotiations.
Views like “Diamonds”
The installation of cryptocurrency mining farms arouses interest of energy generators, especially those who have been suffering from cutting the production of their plants.
The House of the Winds, whose partner has the French Totalenergies, and Gip’s Atlas Renewable Energy confirmed their intentions to Reuters.
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Engie’s subsidiary in Brazil and Auren Energia, Joint Venture between Votorantim and CPP Investments, are also evaluating projects to monetize unused energy, according to three sources. The companies preferred not to comment.
The generators see “consumers like these as if they were diamonds,” said Raphael Gomes, a lawyer who works in several crypto projects.
Companies are evaluating different models, including the purchase of equipment to mine on their own.
In Bahia, Eletrobras, the largest Brazilian energy generator, is installing ASIC mining machines, along with a microrede fed by wind turbine, solar panels and batteries, as part of a pilot project.
“We want to understand how this industry works,” said Juliano Dantas, Vice President of Innovation at Eletrobras.
The initiative can help energy companies position themselves to work with Data Centers, a sector that the Brazilian government is trying to attract as part of the strategy to boost a renewable energy -based economy.
The advance of this new industry in Brazil, on the other hand, generates concerns about water use – a resource used in machine cooling systems – as some of the regions with the highest energy surplus also face droughts. Brazil also faces infrastructure problems and lacks specific regulations for cryptocurrency mining.
“We went after 400 MW – it was like a slightly difficult Sysicus journey,” said Bruno Vaccotti, Penguin’s executive. “We are still exploring Brazil, but it is not so easy.”
(By Leticia Fucuchima in São Paulo, with additional report by Elizabeth Howcroft in Paris and Samuel Chen in Xangai)
