Venezuela’s Biggest Power Plant Sputters Amid Crisis

[ChangoLoa]

By Steven Bodzin

Jan. 22 (Bloomberg) -- Planta Centro, Venezuela’s biggest fossil-fueled power plant, is operating at less than a fifth of its designed capacity, exacerbating a power crisis that has shuttered businesses from aluminum plants to shopping malls.

The plant operated at 273 megawatts of power yesterday, or at about 14 percent of its 2,000 megawatt capacity, according to a daily report from Venezuela’s grid manager, the National Electric System Administration Center, known by its Spanish acronym CNG. The plant hasn’t produced at more than 26 percent of capacity in at least three months, according to the center.

Venezuela is suffering its most severe electricity crisis in six years because of growing demand and a drought that cut water levels in the hydro dams that provide 73 percent of the country’s power. Guri Lake, the biggest reservoir, is at 52 percent of useful capacity, according to the CNG daily report.

“The plant needs a total overhaul, a cleanup or maybe a complete replacement with a more modern plant,” Miguel Lara, who headed Venezuela’s power planning agency from 1999 to 2004, said yesterday in a telephone interview.

Venezuelan utility Cadafe, which ran Planta Centro until handing it over to state oil company Petroleos de Venezuela SA, said in 2003 it planned to spend $100 million to boost capacity to 1,600 megawatts from 900. Two years later, Cadafe said the plant was operating at about 500 megawatts and it would spend $400 million to overhaul the plant. This year’s federal budget allocated 13.8 million bolivars ($3.2 million) to the project.

‘Didn’t Take Actions’

“They didn’t take the actions they planned,” Lara said. “If it rains they will delay the investments again.”

The government is investing in power plants other than Planta Centro and has brought 4,622 megawatts of new generation online since 2001, Energy Minister Rafael Ramirez told reporters yesterday in Caracas.

“We invested $8 billion in the electricity sector,” he said.

Chavez’s ally Ali Rodriguez visited Planta Centro twice this week as his first acts since being named electricity minister Jan. 15, the state-run Bolivarian News Agency reported. Rodriguez replaces Angel Rodriguez who was fired for power rationing problems.

Planta Centro’s low output has utilities in Valencia, the country’s manufacturing center, rationing electricity, the local newspaper El Carabobeno reported on Jan. 20. Customers are being blacked out for three hours at a time, the newspaper said.

The country’s electrical system is at risk of a “collapse” by April and the government may have to extend power rationing, Patrick Esteruelas, a Latin America analyst at Eurasia Group in New York, said in a note to clients on Jan. 19.

Chavez halted production lines at state-run aluminum and steel companies in December to save electricity. Customers of Edelca, the utility that serves the country’s heavy industries, used 20 percent of Venezuela’s power in the first 11 months of last year, according to CNG’s November monthly report.

Link:
http://www.bloomberg.com/apps/news?pid=20601207&sid=aoBir.DHHlgY