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StJacques: The coming electrical
power disaster in Venezuela

Guri dam, on the Caroní River, Bolivar State, Venezuela,
Top Provider in the EDELCA Hydroelectric Power Complex

As I posted a couple of weeks ago, there is now evidence from a recent public opinion poll that Venezuelans are turning against Hugo Chavez in huge numbers.  Yeah, as if all that street protest action was not enough to convince anyone.  There are numerous reasons explaining why, but I would like to suggest that the most important come down to issues that are simple and present in the everyday lives of Venzuelans.

Venezuela is currently suffering from a number of economic and social ills.  There have been food shortages and rationing of vital commodities, such as water.  Economic growth has declined, the Bolivar has been devalued in a manner so confusing as to create widespread uncertainty, and if you add runaway inflation into the mix the attendant social consequences become easy to grasp.  Then there is the ever-present threat of violent crime.  But there is one particular problem of everyday life in Venezuela that may be more of a threat to El Primer Bolivariano than all the others, and it certainly will be a major issue in the parliamentary elections this year.

In Venezuela, the lights keep going out.

Origins of the Electrical Power Shortage:  Inattention to Rising Demand

Though there have been periodic problems with electrical power output and distribution over the past several years, things began to take a turn markedly for the worse by at least last September, when regular blackouts became a phenomenon that only added to other domestic ills facing the Venezuelan people.  The Chavez government has since moved with some fervor to restrict consumption of electricity, imposing rolling blackouts as well as announcing a series of what have been at times punitive and almost always confusing public edicts designed to compel Venzuelans to cut their consumption.  And while there are many factors which must be taken into account when explaining the current crisis, the most basic aspect of it is that the supply of electrical power in Venezuela is highly concentrated in the output of a few hydroelectric power installations, most prominently the Guri Dam complexes in the east of the country, which have been unable to keep up with an increase in demand, both for reasons of inadequate rainfall to replenish the reservoir's water levels as well as the inattention given to national energy production on the part of Chavez's regime.

Venezuela's use of electrical power has grown steadily throughout this decade, but its biggest increases mirrored the peak years of expansion of its Gross Domestic Product (GDP).  The critical years of growth in Venezuelan GDP were from 2004 - 2007, when a very rapid expansion fueled by rising oil prices created a more pronounced rise in electrical power use.
   Venezuelan GDP:  2003 - 2009

Figures for Venezuelan electrical power consumption rose most rapidly during the same four years of its explosion in GDP, growing from an average national daily use of 10,951 megawatts (MW) in 2004 to 12,882 MW in 2007, which represents an increase of 17.63% over the entire period, a significant change in aggregate Venezuelan electrical power demand.  The steady rate of growth is also important to note, since it informs us in part of the Chavez regime's forewarning of the present crisis.  If you take the 2004 increase over the previous year and average out the annual yearly percentage increase in electrical power use through 2007 it comes out to average growth rate of 6.05% per year.  With an annual rate of increase that accelerated electrical power consumption in the country at a steady pace, the need to fill growing demand cannot have been unforeseen.  In fact, the first warning of a potentially serious shortfall created by rising demand came from EDELCA, the government-owned Caroni Electrification District (in eastern Venezuela where the major hydroelectric complexes are located), in 2002; an alarm that was supported in later analyses over the next two years.  Chavez and his government were forewarned, but apparently paid little attention, even though dramatic economic growth provided them with the resources needed to address the danger.

Average Daily Demand for Electrical Power:  2002-2012

Venezuela's Vulnerability:  Concentration in Supply of Electrical Power

One of the most easily understood aspects of Venezuela's electrical power supply problem is that it highly-concentrated in just a few hydroelectric power complexes managed by EDELCA for CORPOELEC, the national electric power company, which has an almost monopolistic control over the generation of power in the country.  While there are some smaller producing units involved in EDELCA's organizational structure, the overwhelming majority of their electric power production comes from four main complexes; Guri I and II, Macagua, and Caruachi.  The first three of these dams represent a very long-term construction project for Venezuela, beginning with a plan developed by 1949.  As of 1986 the Macagua and Guri complexes had an installed capacity of 10,000 MW, which though underutilized, was still significant.  The Caruachi complex was the final addition, beginning commercial operation in 2003, but not coming fully online until 2006.

With respect to the structure of Venezuela's electrical sector, the consequence of the Chavez regime's failure to heed the warnings from EDELCA and other experts who predicted an eventual shortfall in the electrical power supply is that it remained highly concentrated in the EDELCA hydroelectric generating complexes of the Guri, Macagua, and Caruachi Dams.  As of last year, some 70% of all electrical power generated in Venezuela originated there, which of course means that the supply would be available only so long as rainfall was sufficient to maintain high water levels in the reservoirs.  But Venezuela had a history of periodic dips in rainfall, as the EDELCA engineers and others had warned, which left the entire country vulnerable to a near catastrophic economic meltdown in the event of the recurring weather phenomenon commonly known as El Niño, which had historically reduced water levels in the several reservoirs before and could potentially do so again.

Average Daily Demand for Venezuelan Electrical Power in 2009

Recently, Chavez propagandists and apologists have attempted to explain the current electrical power mess as it relates to the diminished rainfall resulting from the El Niño phenomenon as an unforeseen climatological event.  Unfortunately, Venzuela's own National Institute of Meteorology and Hydrology says differently, making clear they knew that at least three El Niño events over the last two decades had produced drought conditions in the country, especially the last one in 1997-1998:

. . . The effects of El Niño events have been perceived in the national territory, especially during the years 1992, 1996 and 1997-98.  This last event was characterized by deficits in rainfall, drought and positive temperature anomalies in the greater part of the country.  The Caroni River Basin, the main source of hydroelectric power generation of Venezuela, exhibited water flows below the historical average. . . .
National Institute of Meteorology and Hydrology of Venezuela

In spite of an electrical power generating capacity that grew during the Chavez presidency, with the completion of the Caruachi Dam project begun before his term in office, Venezuelan experts who understood the problem of concentrated supply in the Caroni River Basin and its dependence upon uncertain rainfall levels had warned the regime of impending disaster.  But to what effect?

Triunfalismo:  The Chavez Program for Expanding Electrical Power Infrastructure

There has been a lot of triumphant publicity from Hugo Chavez and his government trumpeting their investments in Venezuela's electrical power infrastructure over the past decade, which their propagandists continually tout as evidence of the regime's successes in delivering for the Venezuelan people, but it has been mostly just pure press manipulation.  The real story of actual progress made on the ground in the implementation of plans and programs announced by the regime says something quite different.  Finding credible information which quantifies the reality of Venezuela's electrical power problems is difficult, but the best source one can turn to for what comes closest to accuracy is Victor Poleo, a former Vice Minister for Energy during the first two years of the Chavez presidency, but who has now emerged as one of the regime's most significant, and more importantly most knowledgeable, critics on the subject of energy policy.

Victor Poleo,
Venezuela's Vice Minister for Energy from 1999 - 2001

Poleo has described the overall impact of Chavez's energy policy as one filled with "tragic errors", which are especially troubling for the differences between the amounts of state funds appropriated for electrical infrastructure development and those actually spent.  According to Poleo, now at the Universidad Central de Venezuela, who has access to better information than practically anyone outside the
government itself anyone outside the government itself, the Chavez regime has, across the eleven years of its administration, put some $35 billion (U.S.) at the disposal of the electric sector for which projects totaling some $7 billion have actually been approved and, of that latter amount, only 30%, perhaps $2.1 billion by inference, has in fact been spent.  And the accounting is troubling:

. . . The efficiency of what was actually spent versus what was appropriated can barely be located between 25% spent on transmission and 50% on generation. . . . There was therefore no disinvestment in the strict sense of the term, that is to say, shortages of money delivered to the electric sector.  The flaw is that there was misappropriation of these funds by the political, militarized, and civilian class, who are tasked with conducting the affairs of the electric sector. . . .
Victor Poleo

Across numerous articles on his portal at, Poleo has delivered a comprehensive and authoritative critique of the Chavez government's complete mishandling of the administration of the electric sector that drives home some of the biggest of the regime's many failures, but in this case, one that has had a noticeable impact upon many Venezuelans.  And where is it all going?  According to a report Poleo has prepared with a panel of related experts, which has recently been made public, a complete collapse of the electric sector is predicted for this year.  And it is not political posturing either.  Even EDELCA's own experts pointed out in December that the collapse was possible by April if national demand was not reduced by 1,600 MW daily.

Victor Poleo has done perhaps as much as anyone to put the lie to the triumphalist public relations campaign the Chavez regime and their propagandists, such as, have waged from the beginning with respect to the realities of the electric sector in Venezuela.  There has been a lot of noise, but very little of substance to the regime's energy policy.  And noise is not a good policy choice, nor good politics, when the material well-being of the citizenry is at stake.

We will have much to watch over the ensuing months as the electric power problem in Venezuela unfolds before us and, more importantly, before the Venezuelan people who are apparently aligning themselves behind the opposition in ways we have not seen previously.  The continuing problems of a failing electric power supply can only be expected to accelerate this trend.

Recommended Links: by Gustavo Coronel ( Special thanks)

The Electricity Mess of Chavez for Dummies by Daniel Duquenal at Venezuela News and Views.

- El "por ahora" se convierte en "¿y ahora?" ("For Now" becomes "What Now?") by Alek BoydThough the entry is in Spanish, it contains a short video clip filmed during a blackout of a common citizen who has supported Chavez in the past who is now rethinking his earlier views and recognizes that backing Chavez was a mistake.  Alek has included sub-titles captioning the video in English.  I mentioned at the beginning that matters which affect the lives of ordinary Venezuelans are becoming the source of newfound opposition to Chavez.  Take a look and see for yourself. 



StJacques is U.S. blogger . Petroleumworld does not necessarily share these view.

Editor's Note: This commentary was originally published by stjacquesonline. on 02/18/2010. Petroleumworld reprint this article in the interest of our readers .

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