Thursday, February 18, 2010

The Coming Electrical Power Disaster in Venezuela

 

Guri Dam, Top Provider in the EDELCA Hydroelectric Power Complex

As I posted a couple of weeks ago, there is now evidence from a recent public opinion poll that Venezuelans are turning against Hugo Chavez in huge numbers.  Yeah, as if all that street protest action was not enough to convince anyone.  There are numerous reasons explaining why, but I would like to suggest that the most important come down to issues that are simple and present in the everyday lives of Venzuelans.

Venezuela is currently suffering from a number of economic and social ills.  There have been food shortages and rationing of vital commodities, such as water.  Economic growth has declined, the Bolivar has been devalued in a manner so confusing as to create widespread uncertainty, and if you add runaway inflation into the mix the attendant social consequences become easy to grasp.  Then there is the ever-present threat of violent crime.  But there is one particular problem of everyday life in Venezuela that may be more of a threat to El Primer Bolivariano than all the others, and it certainly will be a major issue in the parliamentary elections this year.

In Venezuela, the lights keep going out.

Origins of the Electrical Power Shortage:  Inattention to Rising Demand

Though there have been periodic problems with electrical power output and distribution over the past several years, things began to take a turn markedly for the worse by at least last September, when regular blackouts became a phenomenon that only added to other domestic ills facing the Venezuelan people.  The Chavez government has since moved with some fervor to restrict consumption of electricity, imposing rolling blackouts as well as announcing a series of what have been at times punitive and almost always confusing public edicts designed to compel Venzuelans to cut their consumption.  And while there are many factors which must be taken into account when explaining the current crisis, the most basic aspect of it is that the supply of electrical power in Venezuela is highly concentrated in the output of a few hydroelectric power installations, most prominently the Guri Dam complexes in the east of the country, which have been unable to keep up with an increase in demand, both for reasons of inadequate rainfall to replenish the reservoir's water levels as well as the inattention given to national energy production on the part of Chavez's regime.

Venezuela's use of electrical power has grown steadily throughout this decade, but its biggest increases mirrored the peak years of expansion of its Gross Domestic Product (GDP).  The critical years of growth in Venezuelan GDP were from 2004 - 2007, when a very rapid expansion fueled by rising oil prices created a more pronounced rise in electrical power use.

   Venezuelan GDP:  2003 - 2009
Source:  indexmundi.com

Figures for Venezuelan electrical power consumption rose most rapidly during the same four years of its explosion in GDP, growing from an average national daily use of 10,951 megawatts (MW) in 2004 to 12,882 MW in 2007, which represents an increase of 17.63% over the entire period, a significant change in aggregate Venezuelan electrical power demand.  The steady rate of growth is also important to note, since it informs us in part of the Chavez regime's forewarning of the present crisis.  If you take the 2004 increase over the previous year and average out the annual yearly percentage increase in electrical power use through 2007 it comes out to average growth rate of 6.05% per year.  With an annual rate of increase that accelerated electrical power consumption in the country at a steady pace, the need to fill growing demand cannot have been unforeseen.  In fact, the first warning of a potentially serious shortfall created by rising demand came from EDELCA, the government-owned Caroni Electrification District (in eastern Venezuela where the major hydroelectric complexes are located), in 2002; an alarm that was supported in later analyses over the next two years.  Chavez and his government were forewarned, but apparently paid little attention, even though dramatic economic growth provided them with the resources needed to address the danger.

Average Daily Demand for Electrical Power:  2002-2012
Source:  Soberania.org

Venezuela's Vulnerability:  Concentration in Supply of Electrical Power

One of the most easily understood aspects of Venezuela's electrical power supply problem is that it is highly-concentrated in just a few hydroelectric power complexes managed by EDELCA for CORPOELEC, the national electric power company, which has an almost monopolistic control over the generation of power in the country.  While there are some smaller producing units involved in EDELCA's organizational structure, the overwhelming majority of their electric power production comes from four main complexes; Guri I and II, Macagua, and Caruachi.  The first three of these dams represent a very long-term construction project for Venezuela, beginning with a plan developed by 1949.  As of 1986 the Macagua and Guri complexes had an installed capacity of 10,000 MW, which though underutilized, was still significant.  The Caruachi complex was the final addition, beginning commercial operation in 2003, but not coming fully online until 2006.

With respect to the structure of Venezuela's electrical sector, the consequence of the Chavez regime's failure to heed the warnings from EDELCA and other experts who predicted an eventual shortfall in the electrical power supply is that it remained highly concentrated in the EDELCA hydroelectric generating complexes of the Guri, Macagua, and Caruachi Dams.  As of last year, some 70% of all electrical power generated in Venezuela originated there, which of course means that the supply would be available only so long as rainfall was sufficient to maintain high water levels in the reservoirs.  But Venezuela had a history of periodic dips in rainfall, as the EDELCA engineers and others had warned, which left the entire country vulnerable to a near catastrophic economic meltdown in the event of the recurring weather phenomenon commonly known as El Niño, which had historically reduced water levels in the several reservoirs before and could potentially do so again.

Average Daily Demand for Venezuelan Electrical Power in 2009
Source:  Soberania.org

Recently, Chavez propagandists and apologists have attempted to explain the current electrical power mess as it relates to the diminished rainfall resulting from the El Niño phenomenon as an unforeseen climatological event.  Unfortunately, Venzuela's own National Institute of Meteorology and Hydrology says differently, making clear they knew that at least three El Niño events over the last two decades had produced drought conditions in the country, especially the last one in 1997-1998:

. . . The effects of El Niño events have been perceived in the national territory, especially during the years 1992, 1996 and 1997-98.  This last event was characterized by deficits in rainfall, drought and positive temperature anomalies in the greater part of the country.  The Caroni River Basin, the main source of hydroelectric power generation of Venezuela, exhibited water flows below the historical average. . . .
National Institute of Meteorology and Hydrology of Venezuela

In spite of an electrical power generating capacity that grew during the Chavez presidency, with the completion of the Caruachi Dam project begun before his term in office, Venezuelan experts who understood the problem of concentrated supply in the Caroni River Basin and its dependence upon uncertain rainfall levels had warned the regime of impending disaster.  But to what effect?

Triunfalismo:  The Chavez Program for Expanding Electrical Power Infrastructure

There has been a lot of triumphant publicity from Hugo Chavez and his government trumpeting their investments in Venezuela's electrical power infrastructure over the past decade, which their propagandists continually tout as evidence of the regime's successes in delivering for the Venezuelan people, but it has been mostly just pure press manipulation.  The real story of actual progress made on the ground in the implementation of plans and programs announced by the regime says something quite different.  Finding credible information which quantifies the reality of Venezuela's electrical power problems is difficult, but the best source one can turn to for what comes closest to accuracy is Victor Poleo, a former Vice Minister for Energy during the first two years of the Chavez presidency, but who has now emerged as one of the regime's most significant, and more importantly most knowledgeable, critics on the subject of energy policy.

Victor Poleo, Venezuela's Vice Minister for Energy from 1999 - 2001

Poleo has described the overall impact of Chavez's energy policy as one filled with "tragic errors", which are especially troubling for the differences between the amounts of state funds appropriated for electrical infrastructure development and those actually spent.  According to Poleo, now at the Universidad Central de Venezuela, who has access to better information than practically anyone outside the government itself, the Chavez regime has, across the eleven years of its administration, put some $35 billion (U.S.) at the disposal of the electric sector for which projects totaling some $7 billion have actually been approved and, of that latter amount, only 30%, perhaps $2.1 billion by inference, has in fact been spent.  And the accounting is troubling:

. . . The efficiency of what was actually spent versus what was appropriated can barely be located between 25% spent on transmission and 50% on generation. . . . There was therefore no disinvestment in the strict sense of the term, that is to say, shortages of money delivered to the electric sector.  The flaw is that there was misappropriation of these funds by the political, militarized, and civilian class, who are tasked with conducting the affairs of the electric sector. . . .
Victor Poleo

Across numerous articles on his portal at Soberania.org, Poleo has delivered a comprehensive and authoritative critique of the Chavez government's complete mishandling of the administration of the electric sector that drives home some of the biggest of the regime's many failures, but in this case, one that has had a noticeable impact upon many Venezuelans.  And where is it all going?  According to a report Poleo has prepared with a panel of related experts, which has recently been made public, a complete collapse of the electric sector is predicted for this year.  And it is not political posturing either.  Even EDELCA's own experts pointed out in December that the collapse was possible by April if national demand was not reduced by 1,600 MW daily.

Victor Poleo has done perhaps as much as anyone to put the lie to the triumphalist public relations campaign the Chavez regime and their propagandists, such as Venezuelanalysis.com, have waged from the beginning with respect to the realities of the electric sector in Venezuela.  There has been a lot of noise, but very little of substance to the regime's energy policy.  And noise is not a good policy choice, nor good politics, when the material well-being of the citizenry is at stake.

We will have much to watch over the ensuing months as the electric power problem in Venezuela unfolds before us and, more importantly, before the Venezuelan people who are apparently aligning themselves behind the opposition in ways we have not seen previously.  The continuing problems of a failing electric power supply can only be expected to accelerate this trend.

StJacques


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Acknowledgement:  I would like to post a special message of thanks to Gustavo Coronel, who helped me in my search for credible source information I have used in this investigation.  StJ

Recommended Link: The Electricity Mess of Chavez for Dummies by Daniel Duquenal at Venezuela News and Views.

Update, Thursday, 6:27 p.m.:  Second recommended link - El "por ahora" se convierte en "¿y ahora?" ("For Now" becomes "What Now?") by Alek Boyd.  Though the entry is in Spanish, it contains a short video clip filmed during a blackout of a common citizen who has supported Chavez in the past who is now rethinking his earlier views and recognizes that backing Chavez was a mistake.  Alek has included sub-titles captioning the video in English.  I mentioned at the beginning that matters which affect the lives of ordinary Venezuelans are becoming the source of newfound opposition to Chavez.  Take a look and see for yourself.  StJ

13 comments:

AB said...

Hi St Jacques, for the record the video I posted comes from the BBC, they included the subtitles, not me.

Regarding Victor's excellent article, I was meant to do a translation, but haven't had the time to do justice to it, I tweeted about it though:

http://twitter.com/alekboyd/status/8722056660

Thanks for this anyway, will send it over to Victor.

StJacques said...

Thank you for the clarification Alek. And thank you for putting the video up on your blog. It presents the truth in the first person, which is as powerful a view of the reality of Venezuela under Hugo Chavez as we will see.

And I am willing to help Victor Poleo tell his story to English language readers. The man deserves to be heard.

StJacques

 

Marcos Urbina said...

An inminent collapse

Regardless of of the electrical problems in Venezuela being too old, profesional societies and guilts, university ingeneering schools in Venezula plus excellent specialists, had been warning from time back about a near electrical sector collapse, the problem wasn’t addressed properly at the time.

This early warning was addressed –aimed- at the national government, on the grounds of continous black outs taking place in Venezuela; lack of appropiate manintence –or this was totally absent- and investment are the ones to blame here. Government officials have turned the deaf ear as these problems were presented by experts, consisting on viable formulas for appropriate solutions, thus facing this disaster, while direct responsabilty lays on president chavez.

This show how public affairs have been managed by irresponsible, negligent, and insensitive officials, and here again, in the middle of this storm, not to mention lack of comptroller of accounts and expenditures.
The president of this nation usually fails to respect law, decision, judgement or ruling about the electrical matter while problems have been obviated, cleared away, not sticking faithfully to the rule; also omiting electrical principles, rather have turned to improvise.
Future plans for a better infrastructure were set apart, while those conceived and visualized a long time ago, have been abandoned; irracional occurrence and witticism has taken over, with tottaly disconnected uncertainty, is officially announced to Venezuelans by top government officials.

A scheme for new thermoelectic plants, along with maintenance given to turbines at Guri dam, were discarded proyects as well as proyects aimed at proper maintenance to be performed at equipment, like transformers, and transmission lines -electric power transmission which is the bulk transfer of electrical energy, from generating plants to substations located near to population centers.

The government would blame the mishap on environmental facts, but the truth is 35.000 million dollars bound to electrical necessities were wasted or you question if it was worth the purchase of inadequate at such high a price.

Top put it like this: portions of this equipment are stored today at warehouses in Zulia state; would appear like abandoned.

Venezuelans fear more corruption and bribery to come if government officials would carry out their new plan to accelerate, hurry urgent thermoelectrical plant constructions, being too hard, if impossible to track down fraudulence, scam and deshonesty.

We are talking here about figures something like 35.000 million dollars or more that were pulverized by alleged corruption and scam, a budget bound to electrical area’s provisión.
It’s necessary a real comptroler office –or controler- that would deal with expenditures and rendered to audit accounts so Venezuelans can track down the huge amounts of money, enough to keep this from happening and hundreds of Venezuelan families in rural areas submitted to such hideous punishment like black outs are.

A collapse on electrical power can’t be hindered by carrying out a rationing on the electrica issue, and I’m sincere here; rather the huge proportion of the electrical problem Venezuelans are facing is dealing with a big electrical collapse because we tend to disregard old programs and plans.

StJacques said...

Marcos,

That was an excellent commentary, which presents so much information and at so many levels that I think it stands by itself.

Your second-to-last paragraph has the following:

"... We are talking here about figures something like 35.000 million dollars or more that were pulverized by alleged corruption and scam, a budget bound to electrical area’s provisión.
It’s necessary a real comptroler office –or controler- that would deal with expenditures and rendered to audit accounts ...
"

Yes; this is very well put. I translated another article by Victor Poleo over the weekend, it was his January interview with Revista Zeta, which supports every point you have made above, especially with respect to the accounting. I'm waiting to hear from Mr. Poleo as to whether he wants to publish it at Soberania.org or not. If he does I will publish an entry here announcing and commenting upon it, if not I will publish the full translation instead.

Thank you for stopping by Marcos. You are obviously very-well informed and it is good to hear from you.

StJacques

 

Marcos Urbina said...

Well, Mr. StJacques, I wish you'd read this. Probably you haven't heard of this.

Venezuela is a country that has always been, and still is practically submerged in oil -meaning by this, huge reserves laying underground, as well as plentiful natural wealth.

Nonetheless, you’d wonder why electricity won’t reach for its population necessities.
This is the high bill Venezuelans has to pay, like a prey of an influence peddler; a high price for compensation indeed, and many years from misshandling resources while delighting other countries with favors and the home country’s necessities unattended.
But you would figure out Venezuela’s electrical problem should be associated to its 23.300megawatt installed capacity, meaning this has been sufficient to sustain current 17.250 megawatts demand at this Latin American country, and of course, no failures are not supposed to occur.

Despite huge power capacity mentioned above, actually power electrical plants only generated –produced- as much as 15.650 MHz during last January, obviously one third below capacity. There exist another source that would contribute, like a severe drought going on at this región during these season, where Guri dam –Venezuela’s main dam- is located.

But according to the journal “La Vanguardia,” Chavez has been the only one to blame for this disaster as he never organized due maintenance programs, and the plants to lack maintenance for years now, both at Guri as well as in thermo electrical plants.

According to experts, both used and new turbines are halted, waiting installation, or this being delayed.

It’s necessary an estimate $20.000million U.S. dollars investment on Venezuelan electrical power plants, but a four hour black out decreed was passed on a daily basis by Chavez instead.

Venezuelan fragile economy is being debilitated by such law recently passed while impairing people’s support to government in office. As “Caraqueños” have rejected such power rationing measure in the Capital, but the remainder Venezuelans didn’t escape this.

Chavez has recently came up with a brilliant “solution” to this electrical problem, as he imported, or better to say, brought in an electrician / electrical engineer named “Killer Electrician” Ramiro Valdes, a Cuban to do the hard work. This is nonsense, because Cuba has counted on 50 years to satisfy the country’s necessity without success; they’ve failed instead. Political analysts would wonder about the real goal at Valdés arrival into Venezuela.

Marcos Urbina said...

Let’s clear this up: Ramiro Valdes is an eminence, but only a prominence specialized in a field that would become anyone chilled, as this character is not only a current Cuban vice-president, but he also apart displays as a top rank member withing the cuban structure government, as the third most important man in significance within the Cuban regime administration. He has been twice in the position of Internal Affairs and master minder of G2, this later the most efficient and shadowy secret services round the world. Besides, Ramiro Valdes is currently the person responsible for censuring Cuban citizen’s access to Internet in his post as Informatics and Communications bureau Minister.

Definitely, Valdes is in Caracas by reason of his long experience and familiarity within the electrical matter; yet a specialist ready to use of electricity in torture methods at Cuban jails.

In fact, a well respectable journalist reported in his chronicle at EL UNIVERSAL that some Cuban adviser technicians have made the electricity problem worse in Venezuela, as accidentally damaged six energy generators in four plants, at starting them without proper oil lubricant.

Cuba is aware about Chavez being the hen that lays the golden eggs here, and Venezuela suits to a T, as Cuba profits by Venzuelan shipping more than 36 million dollars yearly of subsidized oil, which means one half regular Cuban consumption.

No doubt this has been Cuban most important foreign trade, while Venezuela is receiving more than 60.000 Cuban experts, as well as food in “exchange.”

Cuba is an island under precarious economy and intensive care economy, and without Chavez assistance, the island would simply collapse, together with castrista regime. That’s why Cuba is clutched, sinking her teeth into the Venezuelan vein like a leech does.

According to serious polls –surveys- Chavez popularity is falling apart too quickly, becoming isolated each time after his vice-president and army chief both resigned recently, claiming Cuba’s meddling and interfering in the Venezuelan army.

On the other hand, Luis Alfonso Davila, former chancellor and old senate president in Venezuelan congress, has just composed a letter aimed at public domains in which it is requested the president’s immediate resign. Chavez former “kitchen cabinet”, the military who participated in an earlier coup, also joined in to write this letter requesting Chavez resign.

Terror and dread would be bigger in Havana than in Caracas, as a general black out ghost in Venezuela is still a threat, and experts reckon a whole black out is certain to take place provided current draught continues for three months more, bringing up a potential political instability both in Cuba and in Venezuela.
Too keep Chavez at power has become top priority for Castro’s regime; such big popularity if lost, can’t get back nor be recuperated in the short term, so this people guess, they’d better be prepared for the worst and would start censorship and repression in Venezuela, and extreme chavismo may well take over again. This is Ramiro Valdes’ job, a certainly skillful guy at this kind of stuff.

Actually, Venezuelan power and authority are handed over to Cuba, and while Venezuela surrender to Cubans, “The Economist” journal has refered that Cuban “advisers” are currently leading harbor, telecommunications operation, as well as police training, issuing ID’s and legal bussiness registration in this country. This why, Venezuela is referred to as “Venecuba.”

“La Vanguardia” tabloid was quoted as saying “There are about 30.000 Cubans on top, important business, as board of directors in dozens of state entities in Venezuela.”
This has been enough, a good chance so experienced Valdes to take advantage of this and ragain control at charge, attack and tighten opposition in the bustle of a controlling dictatorial government.

StJacques said...

Marcos,

You have posted a lot of very useful information here. I am most grateful that you took the time to write it all.

No one can give a perspective on these matters in Venezuela that is as accurate as one from a Venezuelan himself. This is history in the first person and it cannot be challenged.

I thank you for everything you have written and I hope to see you again.

StJacques

 

P.D. - Usted puede ponerse en contacto conmigo en la siguiente dirección de correo electrónico, en el caso de que algo urgente ocurre en Venezuela, que se siente debe ser publicado, o por cualquier otra razón:

stjacquesonline@gmail.com

 

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Redford said...

We are having the same problem in South Africa. Although you didn't see it there were rolling blackouts throughout the World Cup: because the country didn't have the capacity to provide for everyone during that period areas deemed less important to the event (mostly middle class suburban) were left without power as it was diverted to ensure the Football spectacle was uninterrupted. There have been power cuts in South Africa since 2004. It doesn't take years of electrician training to see that a complete absence of investment in infrastructure is going to result in major shortages somewhere. Now everyone is playing catch up and suffering the consequences due to the lack of forsight by the government...

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