Crypto miners flock to Brazil amid clean energy surplus

Brazil’s abundant clean energy supply is drawing cryptocurrency miners from around the world as companies seek to leverage renewable power without straining the national grid. Energy providers like Renova Energia are negotiating with crypto firms to utilize surplus wind and solar power, offering flexible solutions during periods of low electricity demand.

Following Tether’s July announcement of a Brazilian investment, at least six smaller mining projects and one larger 400-megawatt initiative are reportedly under discussion, according to sources from six different companies. Tether plans to use its recent acquisition of Adecoagro to power Bitcoin mining through renewable energy from sugarcane mills.

Renova Energia has already committed $200 million to a 100-MW project in Bahia, consisting of six data centers powered by a local wind farm. “By providing all the infrastructure, we are one step ahead of our competitors,” said Renova CEO Sergio Brasil.

Crypto mining operations, which require significant energy to solve complex computational problems, can scale rapidly depending on electricity availability. This flexibility makes miners ideal consumers of Brazil’s oversupplied clean energy, which has cost the industry nearly $1 billion over the past two years due to underutilized capacity.

The oversupply stems from government incentives that accelerated wind and solar development faster than transmission infrastructure could handle, with some plants losing up to 70% of generated power. Companies like Enegix from Kazakhstan and Paraguay-based Penguin are exploring opportunities in Brazil’s northeast, the region with the highest energy surplus. Bitmain, China’s major mining equipment manufacturer, is also investigating potential projects.

Energy providers see cryptocurrency miners as valuable partners. Firms such as Casa dos Ventos, Engie’s Brazilian subsidiary, Auren Energia, and Atlas Renewable Energy are evaluating projects to monetize unused energy. Eletrobras is piloting a microgrid in Bahia with ASIC mining machines powered by wind and solar energy, aiming to understand the industry and explore entry into the data center sector.

While the potential is significant, challenges remain, including water use in drought-prone regions, limited infrastructure, and lack of mining regulations. Executives like Bruno Vaccotti of Penguin describe Brazil as promising but complex for large-scale crypto investments.