On the brink of an abyss
The wrongheaded country project that the government has been developing over the past 12 years is imploding in practically all areas that are vital to the country.
The implosion of one such area that is having a tremendous impact on the population is the systemic crisis affecting the domestic electricity sector, which is being destroyed by lack of investment and maintenance, incompetence, neglect, and corruption.
The country does not have enough hydroelectric or thermoelectric generation capacity; the transmission grid is insufficient to meet demand and is suffering from structural problems; and distribution system is severely dilapidated. In 2010, a plan was announced for investing US$5 billion to incorporate 5,000 MW of new generation before 2011, but they only managed to bring on line 1,200 MW (only 24% of the goal), according to statements by Energy Minister Alí Rodríguez Araque himself.
At the end of March 2011, around 30% of Guri Reservoir's generation capacity was out of service and today the high voltage transmission line is dangerously overloaded. Approximately 60% of the thermoelectric facilities are also out of service. Venezuela has no reserve electricity generation capacity that it can use if there is an accident anywhere in the electricity grid.
Since 2010, when the long-announced energy crisis finally erupted, there has been no let-up in the “scheduled” power cuts, rationing, or blackouts. The national electricity crisis continues unabated and is getting worse.
In the first 70 days of 2011 alone, Caracas experienced 30 “electricity deficiencies” – government-speak for “big blackouts” – compared to eight in all of 2010. This week, the Executive announced scheduled electricity “rationing” throughout the country, with no mention of dates or times, which leads one to suspect that this is merely another trick aimed at covering up the system's dilapidation and deficiencies.
The electricity crisis is so profound that it is now even undermining Venezuela's already deteriorated oil industry. In its Report and Accounts for 2010, PDVSA admits that refining was affected by failures in the electricity supply, “whose impact generated material and economic losses.”
In the last few weeks alone, an interruption in the electricity service severely compromised the functioning of Paraguaná Refining Complex in Falcón, Venezuela's biggest refining facility and one of the biggest in the world.
In other words, the main source of revenues for solving the electricity crisis and other serious problems beleaguering Venezuelans is severely threatened. What is worse, this situation is pushing Venezuela towards an abyss.
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Editor's Note: This commentary was originally published by Veneconomy , on May 13, 2011. Petroleumworld reprint this article in the interest of our readers.
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Petroleumworld News 05/16/2011
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