In an exclusive article, Simões Pires Advogados partners Roberta Aronne, Mariana Sá and Amanda Faria write about Brazil’s potential as a strategic location for data centers, combining vast natural resources, renewable energy and a growing infrastructure
As we march further into the digital age, the demand for robust, reliable, and sustainable data centers continues to surge. These facilities are the backbone of our connected world, enabling the seamless flow of information that powers economies and societies alike. Amidst this global demand, Brazil stands out as a beacon of opportunity, uniquely positioned to become a major hub for data center installations, leveraging its vast territory, power shoring potential and abundant water resources.
Brazil’s unique advantages make it an ideal location for the establishment of data centers. With its vast land availability, the country offers numerous sites suitable for building the facilities (which have very specific characteristics), many of which are located in regions with favorable climatic conditions and low risk of natural disasters (Campinas region, located in São Paulo countryside, has been leading the sector, followed by Rio de Janeiro State). Additionally, the real estate costs in Brazil are generally competitive compared to other international markets, offering significant initial investment savings. According to a study published by the Brazilian Association of Telecommunications Infrastructure (Abrintel), land lease costs in Brazil can be up to 40% cheaper than in “developed” countries. Coupled with a continuously improving infrastructure and government policies that encourage technological expansion, Brazil presents a strategic and advantageous option for companies looking to enhance their data processing and storage capabilities.
Brazil also provides a secure environment for real estate transactions, with legal structures regulating long-term contracts and land use. The country’s legislation offers the stability and predictability necessary for large-scale and long-term ventures, such as the installation of data centers, ensuring it can operate continuously without unforeseen interruptions.
Power shoring refers to the strategic relocation of data centers to regions with abundant and reliable energy sources. Brazil’s energy landscape is particularly conducive to such endeavors. The country boasts a diversified energy matrix, with a substantial portion derived from renewable sources. Hydroelectric power, which accounts for approximately 60% of Brazil’s energy production, is complemented by significant investments in wind, biomass and solar energy.
This renewable energy capacity and infrastructure not only ensures an abundant supply of power but also aligns with the global push towards sustainability. Data centers, notorious for their substantial energy consumption, can benefit immensely from Brazil’s green energy capabilities, reducing their carbon footprint and contributing to global environmental goals. Furthermore, the geographical diversity of Brazil’s energy sources mitigates risks associated with localized disruptions, ensuring continuous and reliable operations.
Another critical factor in the viability and efficiency of data centers is cooling. As servers and other equipment generate significant heat, cooling systems are essential to maintain optimal operating conditions. Here, Brazil’s wealth of water resources offers a distinct advantage.
The country is home to some of the world’s largest and most significant river systems, including Paraná, and São Francisco rivers. These water bodies provide a sustainable and cost-effective solution for the cooling needs of data centers. Leveraging natural water sources for cooling can significantly reduce operational costs and environmental impact compared to traditional air conditioning systems.
Moreover, Brazil’s commitment to preserving its water resources ensures that these benefits are not only immediate but also sustainable for the long term. The integration of advanced water management and conservation technologies further enhances the feasibility of utilizing these resources without compromising environmental integrity.
The rapid development and deployment of artificial intelligence (AI) technologies have exponentially increased the demand for data centers. According to the International Energy Agency (IEA) “data centers have the potential to double their energy usage by 2026”, and based on a report by Gartner, the global data center market is projected to grow from $200 billion in 2021 to over $300 billion by 2026. AI workloads, which require vast computational power and data storage, are a significant driver of this growth.
AI applications — from machine learning models and autonomous systems to natural language processing and computer vision — demand high-performance computing environments. These environments necessitate robust data centers equipped with advanced hardware, vast storage capacities, and efficient cooling systems. Brazil’s potential to meet these needs, with its vast territory and real estate availability, renewable energy sources and abundant water resources, positions it as a prime candidate for accommodating the burgeoning AI-driven data center demand.
Beyond its natural resources, Brazil’s strategic geopolitical position adds another layer of attractiveness for data center installations. As the largest economy in Latin America, Brazil serves as a gateway to a market of over 580 million people. Its well-developed telecommunications infrastructure and ongoing investments in connectivity enhance its appeal as a data center hub.
Additionally, Brazil’s proactive approach to digital transformation and its commitment to fostering a conducive business environment for technology investments create a robust foundation for the growth of data centers. Government initiatives aimed at improving regulatory frameworks, incentivizing renewable energy adoption, and enhancing cybersecurity further bolster Brazil’s standing as a prime location for data center investments.
To fully realize its potential as a global data center hub, Brazil must foster a business-friendly environment and continue to invest in its energy infrastructure and promote sustainable water management practices. Collaboration between the public and private sectors will be crucial in driving these initiatives forward.
The global community also has a role to play. International partnerships and investments can accelerate the development of Brazil’s data center capabilities, bringing cutting-edge technologies and expertise to the table. By working together, we can unlock the full potential of Brazil’s resources, creating a win-win scenario that benefits not only the country but the entire digital ecosystem.
Fonte: Leaders League