Energy crisis in Venezuela

Simón Bolívar Hydroelectric Plant, on the Guri Dam

The main power plant of the hydroelectric system is the Simón Bolívar Hydroelectric Plant, with a generation capacity of 10,000 MW, but which generated only 5,000 MWh after being affected by the drought,[23][24] and by the beginning of February 2010, the level of the dam had dropped nine meters below its optimum level.[25] If the level of the Guri reservoir falls below 240 masl, some turbines in the plant could not work, and the country's electricity supply would decrease. The government foresaw that if nothing were done, this level would be reached in May 2010, so it began to execute a series of measures that seek to reduce electricity demand and minimize Venezuela's dependence on hydroelectric power plants.[17][26] By the end of March 2010, this date had been postponed to June 2010.[26]

The possibility that the Guri reservoir reached the critical level was first seen by President Hugo Chávez on 31 January 2010, by ensuring that if the companies did not reduce their electricity consumption "70% of the country would be left without electric service".[27] On 9 March, Chávez was more emphatic about it, declaring:

The Guri is 13 meters away from what they call the collapse level. If these parameters were reached, the Guri plants would have to be turned off, which generate electricity for half of Venezuela. That is the reality.

— Hugo Chávez, 9 March 2010[27]

Subsequently, on 18 March, the Minister of Electric Power, Alí Rodríguez Araque, announced that there will be no electrical collapse, and that they planned to operate the Simón Bolívar hydroelectric plant below the safety level, although, he admitted, with limitations in the generation of electricity.[28] He also accused the Venezuelan opposition of causing fear in the population by talking about "collapse."[27] Operating below this level is dangerous because steam could enter the turbines, a phenomenon known as cavitation, that can cause mechanical damage to them.

By April 15, 2010, the Guri reservoir reached 8.79 meters above the collapse level; however, the next day its level increased by one centimeter, the first increase reported in months.[29] On 23 April, the Minister of the Environment, Alejandro Hitcher, assured that the Guri would reach a normal growth rate within fifteen or twenty days.[30] However, according to Miguel Lara, former general manager of the Interconnected Systems Operation Office, the crisis continued due to problems in the thermal generation park and transmission lines, although he recognized that it is unlikely that the Guri will collapse.[30][31]

The National Electric Corporation, the public body that manages all electricity generating companies, acknowledged that by the end of 2008, 79% of thermoelectric plants were more than 20 years old, and that 30% were unavailable due to technical problems.[32] In addition, of the plants that were working, many did not do so at full capacity: 3,800 MW were generated, when the installed capacity was 9,051 MW.[32]

Planta Centro, Carabobo

One of the main thermoelectric plants in the country, Planta Centro, has an installed capacity of 2,000 MW, divided into five units of 400 MW each. In the last few months only two units were operational, generating about 450 MW.[33] Although the funds to reactivate an additional unit were delivered months before, for the start of the crisis the work was 21 months behind.[34] Subsequently, on 27 March, a unit was stopped for maintenance. By the beginning of April 2010, Planta Centro operates only with a unit of 400 MW, which is only generating 250 MW.[35][36] Electrical specialists believe that Planta Centro is unlikely to recover in the short term, claiming lack of maintenance in recent years as the main cause.[36]

Other plants presented similar situations: the Pedro Camejo plant produced 50% of its capacity "for reasons of fuel and associated transmission";[36] and the Josefa Camejo plant operated at 33% of its capacity.[36] Additionally, operating plants have reduced their generation since the beginning of the crisis: Plant Tacoa in Vargas had to shut down a unit of 377 MW in April, and plant Ramon Laguna stopped two machines that generated 253 MW in Zulia.[35]

Even before the 2009-2010 drought, there was already a disparity between the increase in supply and demand for electricity in Venezuela;[17] the latter had been increasing at a rate of 7% per year since 2005.[37] This deficit has been criticized by the opposition, alleging that in previous years the Venezuelan government did not make the necessary investments to increase power generation capacity at the same rate as the increase in demand.[25] On the other hand, the government has accused sectors of the population of "wasting" electricity, and has highlighted the fact that Venezuela is the country with the highest electricity consumption per capita in Latin America.[9][37]

According to figures from the Office of Operation of Interconnected Systems, the Chávez government completed less than half of the investments in thermoelectric energy generation planned in 2005. Alí Rodríguez has denied that the government has not made the necessary investments, although he acknowledged that there are delays in the execution of projects.[25]

On 21 April 2010, a power cut was reported from the east to the west of the country, affecting 15 of the 24 states of Venezuela.[38] Due to the distribution of the fault, Ciro Portillo, former vice president of Enelven, has assured that it is due to overload in one of the three transmission lines that start from the Guri.[38] Before the crisis, the transmission lines were transmitting 1,000 MW over their capacity during the peak hours.[38] The high temperatures Venezuela experiences between April and May also influence the saturation of these lines.[39] The company Enelven, responsible for the affected areas, has not reported on the causes of this energy slump.[38] For its part, the National Management Center has reported that Cadafe-Occidente overloads transmission lines daily.[39]

 In 2009, the Chávez administration declared a national electric emergency and invested $100 billion US dollars towards solving it.[40] The Chávez administration "distributed million-dollar contracts without bidding that enriched high officials of his government and the works were never built", according to Univision.[20] The Wall Street Journal stated that the government awarded electrical contracts to companies with little experience in the energy sector.[18] Billions of dollars were awarded in contracts for projects that were never completed, leading to international investigations of "high officials of the Chavez regime today persecuted for plundering the coffers of the Bolivarian Republic".[20] Critics say that one company, Derwick Associates, was given projects although they had no previous experience; Derwick denies any bribes were involved.[18][20] Of 40 energy projects approved between 2010 and 2014 analyzed by Transparency Venezuela, 17 are not completed as of March 2019, none are operating at capacity, and overcharging by billions of dollars was identified.[20] In 2017, the National Assembly investigated the $100 billion dollars invested in the electrical system and determined that over $80 billion was embezzled, that more than 14 thermoelectric stations were not functioning, and that neither the electrical transmission nor the distribution system had adequate maintenance.[41]

President Chávez set a goal of installing 6,000 MW in 2010 through thermoelectric plants,[17] an increase in the electricity supply greater than what has been installed during his then-eleven years in office.[17] In addition, the estimated cost of the plan was of more than US$5,000 million.[42]

On 24 April, Minister Alí Rodríguez announced that 600 MW were installed in the first quarter, and they plan to install an additional 1,100 MW in the second quarter of 2010. It also reduced the goal of incorporating generation in 2010, from 6,000 MW to 5,000 MW.[43]

On 22 October, Minister Alí Rodríguez lowered even more the annual goal of incorporating electric power generation, going from 5,000 MW to 1,450 MW, with plans to reach 2,000 MW "soon".[44]

Initially, an electric rationing plan was implemented in Caracas, the Venezuelan capital, but it was suspended days later amid protests, which also led to the departure of then-Minister of Electric Energy Ángel Rodríguez, who was replaced by Rodríguez Araque.[25] A new electricity service charge scheme was implemented for users who consume more than 500 kWh per month, who have been identified as "high consumers" by the government.[25] In addition, industries were ordered to reduce by 20% its electricity consumption, with a penalty of temporary interruption of the service in case they did not reach the goal.[25][45] According to the director of the Chamber of Commerce of Caracas, this last measure was an attempt by the government to "blame the companies for the crisis".[45]

In the rest of Venezuela, an electric rationing system was implemented by zones. Before Holy Week in 2010, the power supply was cut by about 3 hours at a frequency of 3 or 4 days. On average, outside of Caracas, Venezuela experienced an interruption in electrical service of between 9 and 12 hours a week.[46]

However, the results were not as expected; between January and February, a reduction in demand of 3% was experienced, while the goal set by President Chávez was 20%.[46] After Easter, the frequency and duration of electricity supply cuts would increase in all of Venezuela except in Caracas: The Venezuelan inside the country experienced daily cuts of four hours, that is, more than 20 hours per week.[46]

The Venezuelan government ruled out interrupting the electricity supply in Caracas, even if the Guri reservoir reaches the emergency level.[47] In this case, rationing would be accentuated in the Venezuelan territory corresponding the Guiana Shield, eastern Venezuela, and the Central-Falcón zone.[47] The Venezuelan opposition criticized the idea of applying rationing to the rest of Venezuela except the capital as "discriminatory".[48]

At the end of April, Corpoelec ordered greater rationing, this time without prior notice and at night. Blackouts due to this cause have been reported in the states of Aragua, Anzoátegui, Mérida, Sucre, Táchira and Zulia.[35]

SIDOR's basic industries in Venezuela's side of the Guiana Shield have been hit hard by the crisis, whose production had already fallen by 40% in December 2009, after the Electricity Ministry set a 300 MW consumption limit; before the crisis, SIDOR consumed 800 MW.[49] By February 2010, SIDOR operated at only 45% of its capacity, and 30,000 tons of metal billets were imported to Brazil to meet national demand.[49]

The government did not rule out paralyzing the activities of these industries completely, due to the high energy consumption that their processes require.[16] In addition, three power plants were acquired to allow SIDOR to generate its own energy.[49] It was expected that by the end of May 2010, the first of these plants would start generating the first 175 MW out of a total of 425 MW.[49]

In 2011, due to the crisis and electricity deficit, electrical energy began to be imported from Colombia. The transfer is made through Cuestecitas-Cuatricentenario, through the exclusive commercial representative Isagen. Electric exports to Venezuela are also made from Norte de Santander through the San Mateo-Corozo circuit, with which Isagen has a connection contract through which 27.52 GWh have been exported.[50]