Recovering 130 years, the great challenge of the Venezuelan electricity industry

Today, Venezuelans spend half their lives in the dark, an image that is the best example of the energy crisis the country is going through. On the other hand, there is an industry, the electricity industry, which has set foot in the 19th century and which is also the main burden for economic recovery. Whoever governs, governs.

This is undoubtedly the most visible effect. Citizens in the dark who have to leave the metro in the middle of a blackout or wait patiently by candlelight, but there is also a whole industry that can no longer work, that has no energy to power it and that, as if that were not enough, has as its backbone one of the sectors that needs most electricity to function, the oil industry.

That is why Venezuelan politicians of both sides are determined to promise an almost magical recovery, impossible for experts to see as empty promises. These are some of the keys to the energy crisis and its impact on a hypothetical economic recovery.

"Venezuela is 130 years behind, at the end of the 19th century. It is shocking but there is no way to describe what is happening," electrical engineer and professor at the Central University of Venezuela (UCV) Víctor Poleo told Efe.

According to him, in order to understand the "current agony" of the sector, it is estimated that the active thermoelectric capacity is between 1,500 and 2,000 megawatts, when the installed capacity is 15,000 megawatts, that is, barely 10%.

The problem, as he explains, "is circular", because if the oil industry does not extract crude oil and it is not refined, thermoelectric diesel cannot be obtained.

"The problem is circular, there is no thermoelectricity because there is no thermoelectric fuel and there are no thermoelectric fuels that generate thermoelectricity," Poleo explains.

On the other hand, there is hydroelectricity, which in Venezuela, he explains, has a great privilege: the Caroní River, "in which a capacity of around 15,000 megawatts is installed, particularly in the Guri," one of the largest power plants in the world.

This plant alone has 10,000 megawatts installed, in addition to Caruachi, with 2,200, and Macagua, with another 2,300. In total, 15,000 megawatts have been installed.

However, the data available to experts such as Poleo, which is never made public by the authorities, says that they currently only have a real capacity of 6,500 megawatts, to which thermoelectricity is added to reach a total of about 8,500 megawatts.

According to estimates, Venezuela's energy demand is around 12,000 megawatts, so that Venezuelan electricity generation is sufficient to cover approximately 70% of demand.

According to figures from the International Monetary Fund (IMF), which make up for the lack of official data, Venezuela's GDP fell by 65 % between 2014 and 2019, a devastating drop that has left the country with virtually no industry or trade.

How is this expressed in the electricity supply? Well, according to Poleo, the deputy minister of energy and mines between 1999 and 2001, the estimates made at the beginning of the century, by this time, would be around 25,000 megawatts, if economic activity were to continue.

However, today it is 12,000, the most eloquent sample of the productive failure that the Venezuelan engineer sums up in one sentence: "There is a residential demand, four light bulbs for lighting, but no electricity to produce goods".

This means that anyone who wants to open a factory of any kind in Venezuela would first have to face a fundamental dilemma: he does not have the energy to start it up.

For this reason, he maintains that Venezuela is "at a point like the end of the 1800s, when electricity began" in the country and had to adapt progressively to the different factories that began to open.

A recent report by a group of experts to which Efe had access estimates that reactivating the Venezuelan electricity system would cost an estimated $15 billion, with a variation that could take it up to $18 billion.

In any case, a preliminary programme has been established for recovery in some 36 months, i.e. three years, based on the priority assets for thermal generation and including the most important assets for the state-owned company PDVSA.

Any political promise that does not address these two factors of time and investment therefore seems at the very least illusory.

Sabotage, imperial attack and boycott are the three favourite enemies of Nicolas Maduro's government. He blames them for the situation of the electricity system, but for Poleo they are just three "excuses that have no scientific, engineering or technological basis".

In his opinion, the system was "simply ruined", with a double purpose: "to steal money by inducing an electricity crisis and to domesticate the population".

As an example, he cites the Tocoma power plant, "which was never finished". It had an estimated cost of $2.5 billion, was due to be completed in 2007 and "was over-billed by about $15 billion".

For the engineer, what the Venezuelan authorities have sought is "to appear to be solving a problem," that of lack of energy, when "in reality they were making it worse, and under that excuse, politically they managed to domesticate the population, asphyxiate it, and financially they managed to find excuses to steal.

And, meanwhile, the factories remain paralysed and the citizens in the dark, like the grandparents or great-grandparents of most of those who today tread the planet.