Venezuela imposes nationwide power rationing

OREANDA-NEWS. February 12, 2016. The Venezuelan government has imposed nationwide electricity rationing, formalizing routine power cuts that the government blames on El Nino and critics assert is a consequence of widespread mismanagement.

"The power grid has no spare generation capacity. The risks of national blackouts lasting hours or even days, and resulting social disturbances, have really never been greater than this year," an official of state-owned utility Corpoelec told Argus.

Starting today for an initial 90-day period, Corpoelec is cutting power supplies twice daily during peak consumption periods of 1-3pm and 7-9pm to all commercial establishments, including shopping centers, banks, grocery markets, pharmacies and other businesses.

Businesses are responsible for generating their own power during these periods. Business chambers Consecomercio and Conindustria say their members lack independent supply.

Industrial companies including the oil sector are excluded from the rationing for now. But Venezuela's electricity minister Luis Motta Dominguez Motta suggested that Corpoelec could expand its mandatory twice-daily supply cuts to the manufacturing sector later in 2016 if El Ni?o intensifies a drought now in its third consecutive year.

Corpoelec already routinely cuts power for up to eight hours a day in some parts of Venezuela since 2010. Up to now, the politically sensitive capital of Caracas had been explicitly exempted from rationing since the government first declared a national power emergency at end-2009.

Motta said the Pacific warming trend known as El Ni?o is largely to blame for regional blackouts last month and in October 2015 that forced state-owned oil company PdV to shut downstream assets, including its 940,000 b/d CRP refining complex and its 146,000 b/d El Palito refinery.

Although the oil industry has some independent sources of supply, much is not operational.

Motta dismissed longtime critics who blame the state-owned power grid's persistent operational problems on insufficient maintenance, systemic corruption and poor management.

"The government, not El Ni?o, is solely at fault for the national power grid's structural collapse," Fetraelec power union president Angel Nava says.

Independent local power experts currently advising the opposition-controlled national assembly tell Argus that El Ni?o is not a significant factor in the power crisis. Among other factors, they point to over-exploitation of the Guri reservoir that fuels the 10,000MW Simon Bolivar hydropower complex in remote Bolivar state.

Guri is currently at its lowest level since daily measurements first started in the late 1950s, Motta said.

The reservoir's water level was 252.24 meters above sea level on 5 February compared with 253.29m on 28 January, Corpoelec said.

"Guri's water level presently is falling by over three meters every 30 days and the seasonal dry period has not started yet," the Corpoelec official tells Argus. The worst of Venezuela's dry season historically has been April-June.

If Guri drops to 240m, Corpoelec would be forced to shut down at least half of the complex's current operational capacity of about 8,000MW, without sufficient thermal capacity to make up the loss.

The potential loss of up to 4,000MW generated by Guri would disrupt PdV's upstream and operations nationally, according to an internal Corpoelec assessment of the oil company's power needs.

The energy ministry and PdV declined to comment.

Corpoelec ‘s installed power generation capacity is 34,400MW, of which only around half is operational.

Power consumption nationally was over 18,000MW as of 31 January 2016.