Brazil’s newly re-elected president wants to attract data centers and develop domestic AI, linking digital infrastructure investment to renewable energy availability, grid capacity and workforce training.
Brazilian President Luiz Inácio Lula da Silva said this week he plans to use the country’s renewable energy potential to attract data center investment, outlining the proposal in his first public address after winning re-election.
“We have to take advantage of the energy potential of a country that may have the greatest capacity for renewable energy to bring here the data centers needed to store our data in Brazil,” Lula said.
He also called for some data center capacity to be reserved for Brazilian information, linking digital infrastructure expansion to national technological sovereignty.
For the electricity sector, the proposal could create opportunities for long-term power purchase agreements (PPAs), self-generation and new renewable energy projects. Project viability will also depend on grid connections, supply reliability, and transmission and distribution infrastructure.
Brazilian AI
Lula also advocated developing domestic artificial intelligence to reduce dependence on foreign technologies.
“I don’t want to keep depending on Chinese or American artificial intelligence; I want to create a Brazilian one,” he said, linking the ambition to training professionals in fields such as mathematics and engineering.
Expanding computing infrastructure for AI could increase electricity demand and the importance of renewable power supply, storage and energy management. Lula did not detail specific regulatory mechanisms or requirements for data center investors.
In September, the government enacted Redata, a special tax regime for data centers. The incentives require operators to meet their electricity demand through supply contracts or self-generation using renewable or low-emission sources.
Six areas of Lula’s address with potential implications for electricity
Beyond attracting data centers, other priorities mentioned by Lula could affect the energy market.
1. Digital sovereignty and infrastructure
Expanding domestic data storage and processing capacity could stimulate investment in digital infrastructure. The proposal also aligns with Redata, which aims to encourage data center development in Brazil.
2. Renewable energy expansion
Lula presented the availability of clean energy as a competitive advantage for attracting data centers. This could create opportunities for solar projects and bilateral power contracts, although he announced no specific measures to increase generation for the sector.
3. Grid capacity and electricity supply
Large new electricity loads require assessments of connection capacity, necessary grid upgrades and supply reliability. These factors could influence where data centers are built and whether projects are viable.
4. Workforce training and innovation
Lula highlighted mathematics and engineering as important to developing domestic technology. A skilled workforce is also important for expanding renewable energy, battery storage, automation and digitalized electricity networks.
5. Climate policy and deforestation
Lula said he intends to keep climate policy among the government’s priorities and highlighted the reduction in deforestation over the previous four years. He announced no new specific decarbonization targets for the electricity sector during the address.
6. Digital economy and electricity demand
Lula identified the digital economy as an investment priority for his next term, alongside the green and creative economies. Growth in AI and data processing could increase electricity demand and create opportunities for storage, energy management and renewable power supply.
Investment in the digital and green economies
Attracting data centers through Brazil’s energy resources would link digital infrastructure expansion to the availability of renewable electricity. Delivering the strategy will depend on incentives, power contracting conditions and adequate infrastructure to serve new loads.
Lula said he plans to meet with business leaders, educators and scientists over the following two months to discuss the new government’s priorities. His address did not detail additional electricity-sector measures tied to the proposals.
From pv magazine Brazil
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