Venezuela Coming Out of Electricity Crisis

Mérida, April 16th 2010 (Venezuelanalysis.com) – On Thursday, the Venezuelan Electricity Ministry announced a $3 billion investment that is projected to increase national electricity production by 5,700 megawatts by the end of the year and by 15,000 megawatts by 2015, as the country pulls itself out of a near disastrous electricity shortage.

The public investment will initially be focused on the three hardest-hit states, Anzoátegui, Aragua, and Barinas, and then expand to the rest of the nation with the installation of thermoelectric plants and the improvement of electricity distribution infrastructure, said Electricity Minister Ali Rodriguez.

The minister also emphasized the importance of having diverse energy sources in the long run. “Although the principal objective is to increase thermoelectric generation, efforts will also continue in hydroelectric generation, as well as the use of other sources of energy such as wind and solar,” he said.

Currently, hydroelectricity produces more than 70% of Venezuela’s power. The government’s goal is that thermoelectricity will account for 50% of the nation’s power by 2015, and then wind power and solar power will be incorporated to encompass as much as 10% or more of the power supply by 2025.

Venezuela’s national oil company, PDVSA, is currently investing oil profits in an experimental wind park that is projected to produce 100 megawatts. Over the past three years, PDVSA has spent almost $100 million to bring solar electricity panels to geographically isolated, poor communities nation-wide.

The current electricity shortage began in late 2009. Its immediate cause was an extraordinarily long dry season that drained the nation’s largest dam, El Guri to near collapse. Also, consumption increased by more than 40% following five years of high economic growth.

Worker unions in the electricity industry, which was brought fully under state control in 2006, also say corruption in the management caused a failure to invest in new production. The workers call for increased worker control of the electricity sector to solve this problem, and have gotten positive responses from President Hugo Chavez as well as Minister Rodriguez.

Late last year, the government declared an electricity emergency and decreed measures that included the temporary reduction of the workday to six hours, reduction in production in the heavy industries, the installation of energy-efficient fluorescent light bulbs in cities and rural towns, rate incentives to promote conservation, and programmed power outages in major cities.

These measures, combined with increased rainfall in eight of Venezuela’s 23 states this month, slowed the rate of water loss in the nation’s dams from 15 centimeters per day to three per day, and programmed power outages have decreased.

“There was, is, and will be no electricity collapse,” Rodriguez told the press on Friday.

Nonetheless, last week the government extended its declared state of electricity emergency for 60 days. On Thursday, Rodriguez said the government’s measures will be held in place and “suspended progressively” as the nation overcomes “the terrible consequences of climate change.”

Venezuela now produces between 16,000 and 17,000 megawatts, but the demand is as much as 1,000 megawatts greater than the supply. In February, the country increased its production by 600 megawatts, surpassing its goal for that month.