29 de octubre de 2020
Hispanic World

Venezuela's electricity industry facing multiple challenges

By Gonzalo Dominguez Loeda

By Gonzalo Dominguez Loeda

Caracas, Oct 7 (efe-epa).- These days, Venezuelans are living half their lives in the dark, an image that is the best proof of the energy crisis that exists in the oil-rich country. On the other hand, the electricity industry seems to have one foot stuck in the 19th century and that is the biggest burden weighing on reactivating the moribund economy. No matter who governs.

There's no doubt that this is the most visible effect. People must exit their metro cars in the dark in the middle of a blackout or wait patiently by the light of candles, but it also means there is an entire economic sector that cannot work, that has no energy to get itself going and is crucial for other sectors, including Venezuela's key economic activity - petroleum exploitation and refining.

Venezuelan politicians of whatever stripe are busy predicting an almost magical recovery, although that is something the experts say is impossible and these are merely empty promises. These are some of the keys to the country's energy crisis and its impact on getting economic activity started again.

"Venezuela is 130 years behind the times, at the end of the 19th century. There's no other way to describe what's happening," electrical engineer and Universidad Central de Venezuela professor Victor Poleo told EFE.

He said to understand the "current agony" of the sector you have to note that estimates are that active thermoelectrical capacity is between 1,500 and 2,000 megawatts even though installed capacity is 15,000 megawatts.

The problems, he said, "is circular," because if the petroleum industry doesn't pump crude and it's not refined, you can't get thermoelectrical diesel fuel.

Meanwhile, hydroelectricity, which has a big advantage in Venezuela, namely the Caroni River, he said, "where capacity of about 15,000 megawatts is installed, particularly at the Guri" hydroelectrical center, one of the largest of its kind in the world.

Just that center has 10,000 installed megawatts, along with Caruachi with 2,200 and Macagua with another 2,300.

However, the figures that experts like Poleo have to work with, and which are not public knowledge since the authorities want to keep them secret say that currently there is only 6,500 megawatts of real capacity, and if we add thermoelectricity to that we get 8,500 megawatts.

According to estimates, Venezuelan energy demand is about 12,000 megawatts, and thus the country generates about 70 percent of the power it needs.

According to International Monetary Fund figures, which fill in for the lack of official Venezuelan government data, the country's GDP fell 65 percent between 2014 and 2019, a devastating plunge that has left the country practically without industry or trade.

How is that expressed in electricity supply? Poleo, who was the deputy minister of energy and mines from 1999-2001, said that the calculations they made at the beginning of this century for that period were about 25,000 megawatts of capacity, if economic activity could have been maintained.

Today, however, it's only 12,000 megawatts, which highlights the fact that "There's residential demand, four lightbulbs to light things up, but there's no electricity to produce goods."

This means that anyone wanting to open a factory of any kind in Venezuela would immediately run up against a fundamental disconnect: there's no electricity to get it operating.

Therefore, he said that Venezuela is "at a point like at the end of the 1800s, when electricity (use) got started" in the country and gradually was adapted to the different factories that began to open up.

A recent report by a group of experts to which EFE gained access estimates that reactivating Venezuela's electric system would cost some $15 billion, and perhaps as much at $18 billion.

In any case, a preliminary program says that it will take three years to do the job, using as a basis the priority activities of thermic power generation and getting the state-run oil company PDVSA operating efficiently again.

Thus, any political promises that don't include these two factors of time and investment seem to be illusory, to say the least.

Sabotage, attack by the "Empire" (i.e. the United States) and the boycott on Venezuelan trade are what President Nicolas Maduro likes to blame most for the country's situation and its electricity shortfalls. However, Poleo said they are just three "excuses that have no scientific basis in engineering or technology."

In his opinion, the system "was simply ruined" by two things: people "stealing money from the system, thus creating an electricity crisis, and people got used to it."

As an example, he cited the Tocoma center, "which was never finished." It's estimated cost was $2.5 billion and it should have been completed in 2007, but it was "over-invoiced at about $15 billion."

He said that what Venezuelan authorities have been doing is trying to "pretend that they were resolving a problem" - namely the lack of enough electricity - when "in reality they were aggravating it and, with that excuse, they managed to get the public used to it, to suffocate them and find financial excuses to steal."

Meanwhile, the factories remain offline and the people have no electricity.


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