Crypto mining companies are actively negotiating contracts with Brazilian electricity providers, such as Renova Energia (RNEW3.SA), that would benefit from the South American country’s surplus renewable power without burdening the grid during peak times.
Following crypto heavyweight Tether, which announced in July an investment in the South American country, there are at least six negotiations for small and medium-sized enterprises, as well as one for a larger project of up to 400 megawatts (MW), people from six different companies told Reuters.
Mining machines that solve complex mathematical problems to back crypto transactions have overloaded grids in multiple countries. However, in Brazil, where crypto mining hardly exists today, they could help address a chronic clean electricity oversupply problem, which has cost energy companies almost $1 billion in the last two years, according to wind and solar industry groups ABEEolica and Absolar.
Renewable energy supplier Renova told Reuters it is making one of the first major investments in the crypto sector, a $200 million mining project for an undisclosed client in the state of Bahia in the northeast of Brazil. The 100-MW venture consists of six data centers that will draw power from a wind farm.
Brazil’s energy oversupply stems from years of government incentives that spurred a boom in wind and solar investments. But the pace of development has outstripped the expansion of transmission infrastructure, and some plants now waste as much as 70% of the power they generate.
“There’s tons of potential,” John Blount, one of the founders of Enegix, a crypto miner based in Kazakhstan, told Reuters. “We will try somehow to elaborate mobile data centers,” he added, that would be plugged directly into power plants.
Enegix is looking into deals in Brazil’s northeast, the region suffering from the biggest energy surplus, including tapping into solar and wind power in the state of Piaui.
Penguin, which is based in Paraguay, one of the world’s biggest crypto hubs, said it is negotiating projects too, but declined to share any details.
Source REUTERS.COM