Spotlight: Big techs with big bets on LatAm renewables supply

The abundance of relatively low-cost renewable energy resources is positioning Latin America as an attractive region for tech companies looking to install projects that will clean up their operations and offset carbon emissions.

BNamericas has learned from market sources that advanced negotiations are underway for at least five new direct partnerships between companies in the renewable energy sector and hyperscale providers, which develop datacenters for large cloud companies.

“Our main bet is solar and we're in negotiations in the northeast of Brazil and Chile, but not just there. This comes as a specific demand from a large international cloud client,” says a Latin American datacenter executive who wishes to remain anonymous. 

Energy availability is a fundamental issue for datacenter operation, as much as fiber optics, according to a report by real estate consultancy JLL. 

The energy issue is so critical that countries like the US and the Netherlands are restricting the deployment of new datacenters in certain locations, JLL says. This opens up opportunities in other regions such as Latin America, with a focus on Mexico and Brazil, according to César Mello, head of projects and development services at JLL.

A traditional player in the field, Atlas Renewable Energy claims to be on track to materialize its first projects with the datacenter industry in Latin America, the company’s global commercial VP, Luiz Ballester, told BNamericas this month.

On August 20, Atlas held its first regional event in São Paulo to discuss renewable energy supply for datacenters. Attendees included Rogerio Piovesan, director of Data Center Engineering and Construction at datacenter and fiber company V.tal.

In late May, Brazil’s antitrust regulator Cade cleared a V.tal deal with Atlas, as well as with Atiaia Energia, for investments in solar parks in the states of Pernambuco and Minas Gerais.

The plants will supply V.tal’s own infrastructure in Brazil and any excess generation can be sold on the free market.

According to the transaction documents, V.tal will operate nine solar self-generation consortiums with Atlas. 

The deal involves plants installed in a photovoltaic complex in the Minas Gerais cities of Arinos and Buritizeiro. The Arinos complex was purchased in March by Atlas from Shell Brasil, while the Buritizeiro complex is new. 

In Latin America, Atlas has 5GW of capacity linked to plants in Brazil, Colombia, Chile and Mexico.

V.tal and Atiaia formalized two other consortiums through subsidiaries Sol do Agreste Geração de Energia and Solar do Nordeste Energia Renovável, aiming to enable self-production at the Sol do Agreste I, IV and V wind farms. 

These wind farms total 103MW and are installed in the municipalities of Tacaimbó and São Caetano, in Pernambuco.

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

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.

In 2019, Google signed a contract with AES Chile to build 23 wind turbines in Chile’s Biobío region. The project was part of a hybrid wind and solar portfolio to install 125MW of clean energy generation capacity and supply Google's datacenters. The wind farm is now in operation.

In Brazil, Amazon invested in two renewable energy projects, which are helping to power the company’s local operations – including datacenters, corporate buildings and fulfillment centers – with renewable energy.

The projects are a 122MW solar park, with an investment of 2mn reais in environmental protection programs during the construction phases, and a 49.5MW wind farm, located at the Seridó wind complex in Rio Grande do Norte.

According to Amazon, the two projects combined have the capacity to generate more than 530GWh of clean energy annually and supply 100,000 homes.

The Seridó wind complex project was announced by Amazon in November and is being developed by Elera Renováveis. Once operational, the park is expected to help prevent the emission of 148,000t of CO2, although the company did not provide a timeframe.

“Amazon is committed to continuing sustainable innovation and implementing programs that demonstrate its commitment to sustainability,” AWS global VP of generative AI Vasi Philomin, said at an event with journalists in São Paulo last week about AI impacts on datacenter consumption.

At present, datacenters worldwide consume 1-2% of overall power, but this percentage will likely rise to 3-4% by the end of the decade, according to Goldman Sachs.

Amazon is not the only company in the ICT sector that has partnered with Elera.

A month before Amazon's announcement, Vivo, the largest operator in the country, went public with a partnership with Elera Renováveis to become self-producer with four solar parks, totaling 237MW.

The complex destined for Vivo is installed in Janaúba, Minas Gerais, and should supply more than 200 medium-voltage consumer units.

“Entering self-production reduces dependence on purchasing energy on the free market and makes the company less susceptible to variations in the sector,” Telefônica said at the time.

Amazon also announced that it has reached 100 “logistics hubs” serving its e-commerce operation in the country, part of which are sustainable.

The company's logistics partners include Azul Linhas Aéreas, which provides air transport to various destinations in the country, as well as To do Green, which operates a fleet of electric vehicles in Brazil. Amazon does not disclose the size of this electric fleet.

In comparison, its main rival in Latin America, MercadoLibre, plans to increase its electric vehicle fleet to 10,000 from over 2,300 within five years.

In 2023, Mercado Libre had 2,321 EVs delivered in Brazil, Mexico, Colombia, Chile, Uruguay and Argentina.