The Rise of On-Site Data Centres in Utility-Scale Solar

The recent activation of the Assu Sol solar plant in northeast Brazil marked a significant milestone for ENGIE. With a peak capacity of 895 MW, the facility stands as the largest solar project in the French energy firm’s global portfolio.

However, the initial launch has faced immediate challenges. Shortly after operations began, Assu Sol encountered curtailment, which remains a frustrating issue within the renewable energy sector.

This phenomenon occurs when grid operators instruct energy providers to stop generating power because the grid cannot absorb the production, rather than due to technical faults.

This oversaturation ultimately wastes potential profits for companies like ENGIE. The issue affects more than just Assu Sol, as curtailment has become a challenge for solar and wind operators across Brazil since 2023.

The sector has faced financial losses as surges of new renewable capacity meet stalling demand growth and ageing infrastructure. Consequently, energy is bound to be wasted.

This situation results in a paradox familiar to energy markets globally where increasing the green capabilities of a grid can make financial returns more difficult to secure. For Eduardo Sattamini, ENGIE's Country Manager for Brazil, the priority is determining a solution.

Exploring digital infrastructure solutions

Speaking to journalists on a call, Eduardo stated that the company is assessing potential "offtakers" that could be installed directly at Assu Sol. These industrial energy consumers would absorb excess power that the grid refuses to accept.

Two options currently under consideration include battery storage systems and Bitcoin mining data centres.

"We are looking at some possible offtakers," Eduardo told journalists.

The interest in Bitcoin mining relates more to physics than cryptocurrency in this context. Mining rigs are among the few industrial loads that operators can switch on and off rapidly.

This characteristic makes them uniquely suited to utilise the variable surpluses produced by solar plants. That power would otherwise go to waste.

Furthermore, the policy environment in Brazil has recently tilted in favour of Bitcoin miners. The foreign trade council reduced import duties to zero on high-efficiency mining hardware until January 2028.

This tariff exemption could reduce the up-front cost of mining infrastructure that ENGIE chooses to deploy. However, Eduardo noted that the timeline is not immediate.

"That's not coming next month," said Eduardo. "It will take a couple of years for us to implement."

Navigating broader industry shifts

If ENGIE decides to pivot towards Bitcoin mining, the firm would move against broader industry trends where established players in the crypto sector are shifting away from it.

With block subsidies trending towards zero and margins tightening, miners are increasingly repurposing digital infrastructure for AI workloads. In these instances, contracted revenues from AI firms offer more predictability.

Bitfarms is winding down Bitcoin operations over the coming years and plans to convert its Washington State facility into a standard AI data centre.

Elsewhere, IREN has secured multi-billion-dollar GPU cloud agreements with partners like Microsoft, while Bitdeer Technologies has liquidated its entire Bitcoin treasury.

For ENGIE, these cryptocurrency trends may not carry as much weight. The company is not a crypto operator nor is it betting on Bitcoin prices. It is searching for a load that can turn curtailed megawatt-hours into a bankable asset.

Whether the solution turns out to be mining rigs, battery arrays or a combination of both is a question that could take years to answer.

It is clear that the economics of large-scale renewables in Brazil are under strain that will likely require systemic fixes. Until that time, cryptocurrency could be a useful lifeline for firms like ENGIE.