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Venezuela Implements Measures to Curb Commercial Energy Use

Mérida, January 4th 2010 (Venezuelanalysis.com) – Following months of regular blackouts in some regions of Venezuela, the government has implemented energy saving measures, requiring companies to submit plans to save 20% of their electricity usage, regulating the usage of lighting for advertising, and creating schedules of electricity usage for shopping centres, casinos, and bingo halls.

The Ministry for Electricity’s measures went into effect on 21 December, and the state owned National Electricity Corporation (Corpoelec) is charged with implementing them.

According to the first measure, heavy industries using over 5 megawatts, and light industries, shops, shopping centres and residential centres using over 2 megawatts, will have one month to go to Corpoelec and present plans to reduce their energy usage by 20%. Corpoelec will conduct inspections and those who don’t comply will have to pay 20% extra on their electricity bill, and 10% for further non-compliance. The measure includes both public and private industries.

“We’re going to appoint some inspectors and generate a whole process of inspection and accountability so that all the various sectors comply with this saving plan,” said Minister for Electricity Angel Rodriguez.

The second measure prohibits the use of incandescent light bulbs on billboards and advertising signage. The bulbs should be substituted with energy saving light bulbs, and high usage tubes in billboards and other advertising should be substituted for those with less wattage. Lit up advertising should be turned off outside of working hours, while advertising located on roads can only be lit up between 8pm and 12am.

The third measure relates specifically to shopping centres, casinos, and bingo halls, some of the highest consumers of electricity. Shopping centres’ electricity use is now limited to between 11am and 9pm, and casinos and bingo halls to between 6pm and 12am. Non compliance will result in a penalty of 24 hours without electricity and a second non-compliance denotes a penalty of 72 hours.

The Electricity Ministry said the measures are necessary because the drought, caused by climate change, has affected dam levels, and hydroelectric power is the main source of energy for the country. Also, the ministry said there is a general need to use electricity more efficiently, given that electricity consumption in Venezuela is 14% higher than Latin America’s average, and demand increased by 7% in 2009.

Rodriguez said the drought affecting the Guri reservoir in southeastern Bolivar state will likely last until May. However, he emphasised, “We’re not just looking to save electricity… but also that our people become conscious in the rational use of energy and the Venezuelan culture of wastefulness is wiped out.”

Opposition press as well as the chamber of commerce Fedecamaras responded to the new measures by saying the electricity schedules will “generate unemployment” and “deepen the recession.” Newspaper El Carabobeño argued that the measures will negatively impact production and the economy.

Further, El Periodico Austral, an Argentine newspaper, warned that the government could close its mining and aluminium industries to save energy and that “Hugo Chavez is obliging shopping centres to close early.” The Colombian daily El Pais headlined with, “Shopping centres working in half darkness,” and AFP complained that Christmas had been “less festive than usual” because some of the larger buildings hadn’t used their usual Christmas lighting.

The Bolivarian News Agency (ABN), which visited various casinos and shopping centres on Saturday, reported that so far only the large shopping centres are complying with the new decrees. They report that some cinemas, located in shopping centres, are closing at 9pm as required, while others continue to stay open until 11.30 at night.

A coordinator for the Cinex cinemas told ABN, “[the new measures] are good, because sometimes we are very extravagant with electricity and everything stays switched on. Now we’re only going to leave the freezer on, for the drinks for the next day.”

Since October, some regions of Venezuela have experienced daily blackouts or rationing, lasting from half an hour to two hours, and occasionally more, and over the last two years there have been some major nation-wide blackouts as well as rationing in some areas.

Apart from the droughts, government officials have also blamed bureaucracy in the Corpoelec management and the lack of sufficient investment in electricity production for the shortages.

Also, as a result of twenty consecutive quarters of economic growth, increased wages, and greater access to free social services during the Chavez administration, general consumption of electricity has increased, at a greater pace than the increased generation due to government infrastructure projects.

In May 2008, Chavez announced a 40% expansion of the country’s electricity generation through 42 structural expansion projects. The government also has a plan to replace 74 million incandescent light bulbs with energy saving ones, and Minister Rodriguez said that so far they have replaced 5 million.

The government is restricting the import of energy inefficient air conditioners, fridges and freezers, and private companies who invest in their own energy supply will be exempt from sales tax for 5 years and receive preferential access to government-issued dollars.

In 2007, the Chavez administration nationalised Venezuela’s 14 regional electricity companies and brought them under the control of Corpoelec. Last October, Chavez created the new Ministry for Electricity.

Published on Jan 5th 2010 at 12.16am