Data centers in Brazil bypass transmission disputes via distribution networks

Data center operators in Brazil are increasingly utilizing electricity distribution networks to connect to the power system, bypassing disputes regarding transmission margin capacity. This strategy allows developers to avoid paying significant upfront guarantees before confirming project capacity.

The National Electric System Operator (ONS) and the Energy Research Office (EPE) have reported this trend to the National Electric Energy Agency (ANEEL), expressing concerns that some requests may be speculative, reserving capacity for projects without guaranteed implementation.

Industry representatives, including Scala Data Center, have criticized current transmission policies, citing high costs and limited access windows as major obstacles. While distribution offers an alternative, it is generally limited to smaller loads and can still be denied if the ONS identifies a lack of capacity in the transmission network.