Atlas Renewable to announce first contracts with LatAm datacenters

Atlas Renewable Energy will close its first contracts with the datacenter industry in Latin America by the end of this year, the company’s global commercial VP, Luiz Ballester, told BNamericas.

The company is just entering this segment, with an eye on business opportunities as datacenters are increasingly requiring abundant and, above all, clean energy.

“Datacenters are the new revolution in energy consumption in the world,” Ballester said.

Negotiations are advanced with both cloud players, a group that includes AWS, Microsoft Azure and Google Cloud, and with hyperscale providers, companies that provide datacenter infrastructure for the cloud players.

In the latter case, negotiations occur largely on a global level through the structure and scale of Atlas’ controlling shareholder, US fund Global Infrastructure Partners (GIP).

GIP is a leading independent infrastructure fund manager with over US$100 billion in assets under management, including a renewable energy portfolio of over 19GW of operating and construction capacity worldwide.

GIP also has stakes in major datacenter companies, such as CyrusOne – which in the past held a 10% stake in Brazil’s Odata – and Vantage Towers.

The relationship of these portfolio companies with global technology firms is seen as a lever to facilitate multi-country power supply agreements for datacenters in different markets by other portfolio companies, such as Atlas.

In a major market move in January, another US fund manager, BlackRock, announced a deal to acquire GIP for nearly US$13bn, including cash and shares. The transaction is still pending closure.

BlackRock is also a major investor in the energy and digital infrastructure sectors.

“We believe the expansion of both physical and digital infrastructure will continue to accelerate, as governments prioritize self-sufficiency and security through increased domestic industrial capacity, energy independence, and onshoring or nearshoring of critical sectors,” BlackRock chairman and CEO Laurence Fink, said in a press release about the GIP deal.

LEVERAGING DATACENTERS’ THIRST

Without providing details, Ballester mentioned advanced conversations with datacenter players that are operating sites in more than one market in Latin America.

"I believe that by the end of the year we will have not one, but several, deals closed. Very soon, I’d say."

With increasing demand for energy, specifically clean energy, datacenter investors and clients are seeking different alternatives and geographies for supply. 

Power availability, an integrated grid and low prices are essential energy items for this industry.

“Historically, we have been closely linked to the supply of renewables for heavy industries. Making this move, designing specific projects for the datacenter sector, comes as something very natural,” said Ballester.

“And Brazil, for example, is the cheapest place in the world for energy today. There is a lot of talk about nearshoring in Mexico... I see Brazil as the power-shoring country,” said Ballester. 

According to the VP, the all-in energy cost in Brazil, encompassing commodity costs and systemic costs, is half that of Mexico, a country that has also been attracting large datacenter projects.

BETS

Atlas' go-to-market strategy for datacenters involves two fronts. 

The first is direct prospecting with OTTs and cloud companies, through internal teams dedicated exclusively to these clients. 

The second front encompasses the companies that develop the datacenters, such as Scala, Odata or Equinix. 

And these, in particular, are very interested in the self-generation energy arrangement, said Ballester. 

The main financial benefit of self-generation for the partner company, such as a datacenter, is the reduction of costs linked to distribution rates, said Ballester, while from an operational standpoint the obvious advantage is constant supply.

BNamericas previously reported that Odata last year acquired a minority stake in energy company Omega Energia's 212MW Assuruá IV wind farm, in Bahia state's Xique-Xique municipality. 

With that investment, Odata claimed to have become the first datacenter hyperscaler in Latin America to have 100% of the power consumption of its sites coming from direct participation in renewable energy projects. 

BNamericas has learned that other datacenter platforms in Latin America, which are Odata competitors, were moving to ink similar deals. Ballester did not comment.

Beyond self-generation, Atlas is also looking at PPAs and I-REC green certificates with datacenters.

This month, Atlas will hold an event in São Paulo on energy for the datacenter sector. The group expects to use these events to better position itself in the sector and line up potential clients and partners.

“Datacenters will be a reasonable portion of our business plan for the coming years. In the world, in general. Talking Brazil, Chile, Spain... A good part of our expansion will be via renewable energy projects for datacenters.”