Brazil faces energy transmission bottlenecks for data centers

Brazil is facing significant energy challenges as the rapid expansion of data centers, driven by AI training demands, puts pressure on the national electrical grid. While the country benefits from a high percentage of renewable energy, experts warn that large-scale data centers can require multiple gigawatts of power, comparable to the output of major nuclear plants.

Industry specialists highlight a critical bottleneck in energy transmission. Although renewable energy surpluses from wind and solar are concentrated in the Northeast, data center developers prefer locations near major metropolitan hubs in the Southeast, such as the São Paulo and Campinas regions. This geographic mismatch creates a strain on existing infrastructure.

The National Electric System Operator (ONS) has noted that the transmission capacity in regions like São Paulo is currently exhausted due to a lack of recent expansions. Because building new transmission lines can take five to seven years, the grid's capacity is described as practically inelastic in the short term. While the government has seen connection requests totaling up to 80 GW, much of this was speculative, leaving approximately 10 GW currently under evaluation.