Rystad Energy cut Brazil’s announced data center pipeline by roughly two-thirds, from 21 GW to about 7 GW, citing regulatory uncertainty, severe grid congestion and limited access to reliable power.

Under the Redata tax regime (Law No. 15,504/2026), enacted in September, the tax exemptions are neither automatic nor permanent: they are time-bound and contingent on meeting strict operational criteria. Still pending is the decision on whether natural gas generation qualifies as low-emission power. Bill 3716/2026, which reallocates battery storage integration costs from generators to all system users, is being fast-tracked in Congress and must be approved before the Brazilian electricity regulator ANEEL holds its inaugural capacity auction in December.