The Latin American data center market is experiencing accelerated growth, surpassing initial projections from market intelligence firms, explains Atlas Renewable Energy. However, this rapid growth faces significant systemic challenges, particularly in Mexico. 

“The Mexican electrical system faces complications,” says Daniel García, Commercial Director, Atlas Renewable Energy. “Today the system is saturated.”

Atlas Renewable Energy’s internal assessments indicate that IT load capacity in Latin America is forecasted to reach 3,160MW by 2029, an increase of 1,197MW (61%) over Mordor Intelligence’s forecast for the same period. This reflects a market expansion that is outpacing previous expectations.

Meanwhile, Mexico’s minimum reserve margin, a key indicator of reliability, declined from 13.40% in 2021 to a projected 3.60% in 2024. This exacerbates the risks associated with new data center developments. “Consumers face difficulties connecting to the system and obtaining competitive solutions, which require new investments, long-term contracts, and strategic planning,” says García.

Certain states, such as Queretaro, lead the country in required investment per megawatt of installed capacity. “In Queretaro, determining the most expensive zones for connection clearly shows the problem,” says García.

International data center operators have struggled to secure reliable electricity access in Mexico, particularly for 24/7 supply with flexible ramp-up capabilities. Agreements with generation companies often come with unfeasible timelines, and interconnection difficulties affect the availability of competitive Power Purchase Agreements (PPAs, says García. “The main barriers to connecting to the electrical system include competitive energy and service expectations that are not always met. If there is no solution, companies do not even want to discuss the issue,” he adds.

Overcoming these challenges requires expertise in navigating local regulations, financing, and grid constraints. “More than talking about what data centers can do, we focus on supporting them with specific solutions that provide certainty: contracts, supply, access to infrastructure, land, and capacity,” says García.

Atlas Renewable Energy positions itself as a strategic enabler for hyperscalers and colocation partners, offering a fully integrated, one-stop-shop solution. The company leverages its expertise across the entire data center value chain:

• Power Infrastructure Development: Guarantees interconnection availability and develops DC power infrastructure, “a critical step that typically takes one year,” says García.
   

• Competitive Renewable Energy Supply (PPA): Offers competitive renewable energy solutions across Latin America with a 1.5GW portfolio, including hedging, ramp-up flexibility, and Battery Energy Storage Systems (BESS). The supply start date typically requires two years.
   

• Site and Shell Development: Provides site development tailored to client requirements, including access to load connections, and, where needed, the construction and operation of a powered shell or full infrastructure.
   

This integrated approach ensures that data centers have the reliable, renewable energy supply required to sustain the region’s technological growth, while also mitigating risks associated with grid access, investment timelines, and regulatory complexity.

The long-term trend points toward integrated partnerships, where energy providers, data center developers, and real estate partners collaborate to accelerate deployment and secure reliable supply. Atlas Renewable Energy aims to be the leading energy partner in Latin America, delivering fully integrated solutions across Brazil, Chile, Mexico, Peru, and Colombia.

By combining renewable energy PPAs, power infrastructure development, and close collaboration with colocation partners, the industry can shorten the critical path to Data Center Commercial Operation Date, says García. “Renewable energy is the only option that can offer competitive prices in Mexico. The industry must think about how to turn the complexity of the electrical system into a solution, not a problem,” says García.