Edelca: “National Collapse in 120 Days!”
President Hugo Chavez says that the national rolling power outage launched without any prior notice on 12 January 2009 is “a necessity like a diet when you’re too fat, or someone… has high blood pressure and must diet.”
Chavez also insists that Venezuela’s power crisis is not his fault. The real culprits are “El Niño” and “the Fourth Republic” – the old political/economic guard that lost power over 11 years ago.
Chavez certainly knows how to flog a dead horse. But it won’t help him – or Venezuela – in 2010-2011.
Venezuela’s national power crisis is much worse than President Chavez admits.
Venezuela, quite possibly, could be poised for that Black Swan event we mentioned in an earlier post.
A report by Corpoelec hydro-power subsidiary Edelca warns that Venezuela must cut power consumption by at least 1,600 MW immediately to prevent “national collapse in 120 days” which, per Edelca’s timetable, would be around end-April 2010.
“National collapse” would be sparked by the forced shutdown of at least 5,000 MW of Venezuela’s hydro-power generation capacity.
The lights would go out in large swaths of Venezuela including Caracas for days, weeks, perhaps even for months, according to Edelca’s report.
Even worse, Edelca’s best-case forecast is that Venezuela will only barely avoid “national collapse” – assuming that it starts raining by March and the emergency conservation plan launched on 12 January 2010 is effective – but when has the Chavez regime been effective at anything besides destruction, corruption and bullying?
However, the dry season has only just started. What if “El Niño” isn’t gone by March? What if the regime’s cloud bombing over the skies of the 94,500 km2 Caroni River basin fails to create any rain?
There is a minimum water level, about 271 meters, at which the Guri Dam has a zero power generation deficit. The Guri reservoir’s level dropped under that zero-deficit redline in August 2009. But President Chavez didn’t order Corpoelec to start rationing power until end-October 2009.
Guri’s water level at 1 December 2009 was 264.33 meters compared with 270.05 meters at 1 December 2008, a drop of 5.72 meters over the previous 12 months.
However, the drop in Guri’s water level appears to have accelerated in December 2009. Edelca measured a drop of eight centimeters in the 24-hour period from 24 December to 25 December.
And as of the first week of January 2010, approximately, Guri’s level had fallen to about 262 meters just as Venezuela’s annual dry season started.
Edelca’s report predicts that if it doesn’t rain in the coming months, Guri’s water level could drop to 260 meters or less by mid-February, 253 meters by end-March, 245 meters by end-May and 240 meters before end-June 2010.
Incredibly, these estimates appear to factor in the new rolling blackout program to cut consumption by 1,600 MW.
Without the enforced blackouts, “national collapse” will occur by end-April. With the rolling blackouts, Venezuela has until June before the lights go out.
If the cloud bombing doesn’t work, Chavez always could try importing Native American rain dancers from New Mexico or Arizona, or ask indigenous Shamans from the Amazon to wake up the rain gods.
When the Guri reservoir’s water level hits 240 meters, Edelca has to shut down 5,000 MW of Guri’s power generation capacity including turbine units Nos. 11, 12, 15, 16, 17, 18, 19, and 20, which would leave in service only units 13 and 14, and 1 to 10 (Guri’s oldest turbines).
The three largest consumers of Edelca’s hydro-power are the basic steel and aluminum industries (1,840 MW overall, including 800 MW at Venalum, 500 MW at Sidor and 300 MW at Alcasa), the greater Caracas region (1,600 MW) and Zulia (1,450 MW).
The regime has imposed power consumption cuts of 559 MW on the basic industries. But further cuts are likely.
To achieve the desired reduction in consumption of at least 1,600 MW, the Chavez regime has ordered the national four-hour rolling blackouts every other day. But it likely won’t be enough. Soon every other day will be every day, and the four-hour outages could be increased to six hours or more.
About 30% of the power generated nationally is either stolen or is lost as a result of the decrepit state of the national power grid. But the regime’s power reduction initiatives announced on 22 December 2009 and 12 January 2010 do not include any measures to curb power theft and start repairs of the national power grid.
It’s obvious that the heaviest cuts in power consumption, after the basic industries, will be imposed on Caracas (1,600 MW) and Zulia (1,450 MW), where about half of Pdvsa’s crude production operations are located.
Corpoelec and Pdvsa say the rolling power outages nationwide will not disrupt oil production/refining and gas production activities. But these official assurances are more Bolivarian crap.
The rolling power outages certainly will disrupt Pdvsa’s production and refining operations. In fact, the invcreasingly frequent power outages suffered across Venezuela since 2007 have been disrupting Pdvsa’s production and refining operations for many months. But the four-hour rolling outages will only make things worse for the oil and gas sectors. In fact, Venezuela’s crude oil production could drop below its current level of just over 2.1 million b/d by April or May.
When Pdvsa’s crude production reaches 2 million b/d, exports will fall under 1 million b/d and the national gas supply deficit will balloon because 90% of Venezuela’s gas reserves are associated with crude oil deposits.
Chavez says the Fourth Republic is to blame because the old guard focused on hydro-power generation capacity and ignored the need for more thermal power generation capacity. But Chavez is a liar.
Chavez admits that as soon as he became president in 1999 he canceled plans to expand the country’s hydro-power capacity. However, the Bolivarian regime hasn’t done anything to expand Venezuela’s thermal power generation capacity except blow hot air – dozens of thermal generation projects worth billions on paper have been announced since 2001-2002, and again since 2006, 2007, 2008 and 2009. But less than 25% of these thermal generation projects have been finished and placed into service.
Worse still, the regime didn’t make plans to expand the power grid’s transmission capacity. As a result, even if the new thermal plants were online today, Corpoelec would be unable to increase the power load because the transmission grid is already dangerously strained.
Edelca’s report warns that the power crisis won’t start to ease until (a) it rains sufficiently to fill the Guri and other hydro-power reservoirs again, and (2) at least 23 new thermal power generation plants are finished and commissioned over the coming 30 months.
These 23 new power generation projects will add 4,310 MW of new generation capacity to the national grid, including 1,250 MW in 2010 (5 projects), 2,650 MW in 2011 (15 projects) and 410 MW in 2012 (3 projects).
But a review of the list of planned projects reveals more Bolivarian bulls***. For example, the first 400 MW of generation capacity scheduled to come online is at Planta Centro, specifically Unit 1, in February 2010. However, it’s common knowledge in the power industry that the 2,000 MW Planta Centro is a pile of junk that needs to be torn down and replaced with a new combined cycle thermal power plant.
Venezuela’s state-owned power sector has over 23,000 MW of installed power generation capacity. But Edelca’s report says that average power demand in 2009 was 14,100 MW, of which 9,870 MW was supplied by Guri and 4,230 MW by other power utilities. Guri, which has an installed generation capacity of 10,000 MW, accounted for 63% of total power demand with 6200 MW.
Power demand and power generation capacity are not the same thing. But still, whatever happened to some 9,000 MW of generation capacity? Why is so much generation capacity offline? Other estimates put the figure lower, at about 7,500 MW of generation capacity offline, but even this lower estimate is extraordinarily high, representing almost one-third of the country’s total generation capacity.
Power industry experts say at least $20 billion of investment and five years of hard work are needed to “catch up.” Where’s the money? Where is the comprehensive expansion plan?
What will President Chavez do in the event of a “national collapse” of the power sector? Will he deploy Bolivarian troops, reservists and red-shirted thugs to keep the peace? Will Chavez hunker down deep in his self-described “cave in Miraflores” and plead with his “Santero” priests to save his sorry butt? Or, like trapped rats do, will Chavez do anything it takes to keep his hide intact?