In an unexpected convergence of two seemingly disparate industries, cryptocurrency mining companies are finding a potential home in Brazil, where they could solve a significant problem while building their operations. The South American nation is currently experiencing a substantial surplus of renewable energy—a situation that might sound like a luxury but has actually cost energy companies dearly. Now, crypto miners are actively negotiating contracts with Brazilian electricity providers like Renova Energia, exploring arrangements that would allow them to benefit from this excess clean power without placing additional strain on the electrical grid during peak demand periods.
Major Players Enter the Brazilian Market
The interest in Brazil’s cryptocurrency mining potential isn’t limited to small operations. Following an announcement in July by Tether—one of the world’s largest digital assets companies and the issuer of the most widely used stablecoin—multiple companies have begun serious negotiations to establish mining operations in the country. According to information gathered from representatives of six different companies, there are currently at least six negotiations underway for small and medium-sized cryptocurrency mining enterprises. Additionally, there’s one particularly ambitious negotiation for a larger project that could consume up to 400 megawatts of power—a substantial operation by any standard.
Tether’s approach to the Brazilian market demonstrates the creative thinking companies are applying to this opportunity. The company announced that it is leveraging its recent acquisition of Adecoagro, a company with significant agricultural operations, to tap into renewable energy sources including electricity generated by sugarcane mills. This biomass energy from agricultural waste products will power Tether’s bitcoin mining operation in Brazil, representing an innovative integration of traditional agriculture, renewable energy generation, and cutting-edge cryptocurrency technology.
Renova Energia’s Major Investment
Renewable energy supplier Renova Energia is making one of the sector’s first major investments in cryptocurrency mining infrastructure. The company is developing a $200 million mining project for a client whose identity has not been publicly disclosed. This substantial venture is located in the state of Bahia in northeastern Brazil, a region that has become central to the country’s renewable energy story.
The project’s scale is impressive: it consists of six data centers with a combined capacity of 100 megawatts. These facilities will draw their power directly from a wind farm, ensuring that the mining operations run entirely on clean, renewable energy. This arrangement addresses one of the most significant criticisms of cryptocurrency mining—its environmental impact—by utilizing power that would otherwise go to waste.
Sergio Brasil, Renova’s Chief Executive Officer, explained the company’s strategic thinking behind this move. “We aim to expand the company and enter new markets,” he said. “We realized that by providing all the infrastructure for crypto mining, we were one step ahead of our competitors.” This statement reveals how energy companies are viewing cryptocurrency mining not just as a customer but as a strategic opportunity to differentiate themselves and create new revenue streams from assets that weren’t generating optimal returns.
Understanding Brazil’s Energy Paradox
To appreciate why cryptocurrency mining represents such an attractive opportunity in Brazil, it’s essential to understand the country’s unique energy situation. Brazil has experienced a chronic oversupply of clean electricity, particularly from renewable sources. While this might initially seem like a positive problem to have, it has actually imposed substantial financial costs. According to ABEEolica and Absolar—industry groups representing wind and solar power producers respectively—this renewable energy surplus has cost energy companies almost $1 billion over the past two years.
This financial drain occurs because power plants generate electricity that cannot be consumed or stored, essentially producing a product that goes to waste. Unlike fossil fuel plants that can reduce their fuel consumption when demand is low, wind turbines and solar panels generate power whenever natural conditions are favorable, regardless of whether there’s demand for that electricity at that moment.
The roots of this oversupply problem lie in years of government incentives designed to encourage investment in renewable energy. These policies successfully spurred a boom in wind and solar projects throughout Brazil. However, the pace at which these power generation facilities were developed significantly outstripped the expansion of transmission infrastructure—the high-voltage power lines and substations needed to move electricity from where it’s generated to where it’s needed.
The result is that some power plants now waste as much as 70% of the electricity they generate. This represents an enormous inefficiency: capital has been invested in building power plants, operations and maintenance costs are being incurred, yet the majority of the product cannot reach paying customers. For energy companies, this situation creates both financial losses and strategic challenges.
Why Cryptocurrency Mining Fits Brazil’s Needs
Cryptocurrency mining operations present an almost ideal solution to Brazil’s renewable energy surplus problem. Mining machines—specialized computers that solve complex mathematical problems to validate and secure cryptocurrency transactions—require enormous amounts of electricity to operate. In many countries, this has created significant problems, with mining operations overloading electrical grids and competing with residential and commercial users for limited power supplies.
However, Brazil’s situation is essentially the inverse. The country has abundant power that isn’t being used, and cryptocurrency mining hardly exists there today. This creates a complementary match: miners get access to cheap, abundant, clean electricity, while energy companies find customers for power that would otherwise be wasted.
A particularly valuable characteristic of cryptocurrency mining is its flexibility. Crypto miners can rapidly scale their operations up or down based on energy availability. Unlike traditional industrial operations that require consistent, predictable power supplies to maintain production schedules, mining operations can increase their power consumption when excess electricity is available and reduce it during peak demand periods when the grid needs capacity for other users. This flexibility means mining operations can serve as a buffer, consuming surplus power without straining the grid when residential and commercial demand is high.
Multiple Companies Exploring Opportunities
The interest in Brazilian cryptocurrency mining extends across various companies and regions. John Blount, one of the founders of Enegix—a cryptocurrency mining company based in Kazakhstan—expressed enthusiasm about Brazil’s potential. “There’s tons of potential,” he told reporters, adding that his company is working to develop mobile data centers that could be plugged directly into power plants.
Enegix is focusing its attention on Brazil’s northeast, the region experiencing the most severe energy surplus. The company is exploring opportunities to tap into both solar and wind power in the state of Piauí, another northeastern state with substantial renewable energy resources that currently exceed local demand.
Penguin, a cryptocurrency mining company based in Paraguay (which has become one of the world’s significant cryptocurrency mining hubs due to its abundant hydroelectric power), confirmed that it is also negotiating projects in Brazil. However, the company declined to share specific details about these negotiations, likely due to their preliminary nature or competitive considerations.
Even major manufacturing players are taking notice. China’s Bitmain, one of the world’s largest manufacturers of cryptocurrency mining equipment, is exploring opportunities in Brazil according to a company executive who requested anonymity. Bitmain’s interest is particularly significant because the company would likely be both supplying equipment to mining operations and potentially establishing its own mining facilities in the country.
Energy Providers See Strategic Value
The interest in cryptocurrency mining isn’t only coming from the mining companies themselves—Brazilian energy providers are actively pursuing these opportunities as well. Casa dos Ventos, which has a partnership with France’s TotalEnergies focused on wind power generation, confirmed to reporters that it has interest in cryptocurrency projects. Similarly, Atlas Renewable Energy, which is owned by U.S.-based investment firm Global Infrastructure Partners, has confirmed its intentions to explore cryptocurrency mining opportunities.
Additional major energy companies are also investigating possibilities, though not all are publicly acknowledging their interest. According to three separate sources, Engie’s Brazilian subsidiary (Engie is a major French utility company) and Auren Energia (a joint venture between Brazilian company Votorantim Energia and CPP Investments, the global investment arm of the Canada Pension Plan) are both looking into projects that would allow them to monetize their currently unused energy capacity. When contacted, these companies declined to comment on their cryptocurrency-related activities.
Raphael Gomes, a lawyer who has been working on several cryptocurrency projects in Brazil, offered insight into how energy providers view these potential customers. “Providers look at consumers like this as if they were diamonds,” he said. This perspective reflects the extraordinary value that flexible, large-scale electricity consumers represent to companies struggling with surplus capacity. Finding customers willing to consume substantial amounts of power—particularly customers who can adjust their consumption patterns to match availability—addresses one of the industry’s most pressing challenges.
Different Approaches to Market Entry
Energy companies are evaluating various business models for entering the cryptocurrency mining space. Some are considering simply selling power to mining companies under special contracts. Others are exploring more integrated approaches, including purchasing mining equipment and conducting mining operations themselves.
In the state of Bahia, Eletrobras—Brazil’s largest electricity provider—is pursuing an experimental approach. The company is installing ASIC mining machines (specialized computers designed specifically for cryptocurrency mining) along with a microgrid powered by a combination of a wind turbine, solar panels, and battery storage for a pilot project.
Juliano Dantas, Eletrobras’ vice president for innovation, explained the company’s motivation: “We want to understand how this industry works.” This pilot project represents a learning opportunity, allowing the company to gain firsthand experience with cryptocurrency mining operations, understand their power consumption patterns, and evaluate their technical requirements and economic potential.
This work could serve purposes beyond cryptocurrency mining itself. Energy providers are using these projects to prepare for potential entry into the broader data center industry. The Brazilian government is actively trying to attract data center investments as part of a strategy to grow the country’s clean energy economy. Cryptocurrency mining operations share many technical characteristics with traditional data centers, so experience in one area could translate to the other.
Challenges and Concerns
Despite the apparent synergy between Brazil’s energy surplus and cryptocurrency mining needs, significant challenges remain. Water usage represents one concern, particularly because some regions with the largest amounts of unused energy also suffer from periodic droughts. Cryptocurrency mining operations require cooling systems, and depending on the technology used, these systems can consume substantial amounts of water. In water-scarce regions, this creates potential conflicts between mining operations and other water users, including agriculture and residential consumption.
Brazil also faces infrastructure challenges that extend beyond the transmission limitations already mentioned. Roads, telecommunications networks, and other basic infrastructure in remote areas where renewable energy resources are abundant may not meet the needs of sophisticated data center operations. Additionally, the regulatory environment for cryptocurrency mining remains underdeveloped. Brazil lacks specific regulations governing cryptocurrency mining operations, creating legal uncertainty for companies considering investments.
Bruno Vaccotti, an executive at Penguin, candidly described the challenges his company has encountered. “We went after 400 MW—it was like a Sisyphean journey, a bit difficult,” he said, referencing the Greek myth of Sisyphus who was condemned to repeatedly push a boulder up a hill only to have it roll back down. “We’re still exploring Brazil, but it’s not that easy.”
Despite these obstacles, the fundamental logic of pairing Brazil’s renewable energy surplus with cryptocurrency mining’s power needs remains compelling. As negotiations continue and pilot projects provide practical experience, this emerging partnership could offer a template for other regions facing similar challenges with renewable energy integration.
Acknowledgment: This article was written with the help of AI, which also assisted in research, drafting, editing, and formatting this current version.
