Government mismanagement, not sabotage, caused Venezuela's massive blackout, experts say.

BY ENERGY ADVISOR
Inter-American Dialogue 

Blackouts in Venezuela on Sept. 3 left nearly 70 percent of the country without electricity, including many parts of Caracas, and caused major transportation disruptions. President Nicolás Maduro blamed the outage on sabotage by political opponents and quickly announced the creation of a security force to defend the country's electrical system, but others have blamed the outage on a lack of investment in infrastructure. What was behind Venezuela's latest power system breakdown? Will the blackout push the government to invest more in power infrastructure? What factors have prevented Venezuela from addressing its longstanding electricity problems, and what changes are most needed to ensure more reliable electricity service?

Iñaki Rousse, former vice president of Electricidad de Caracas and international consultant on electricity: The Venezuelan electrical system attained major support between 1950 and 1998 for moving from rural and isolated Venezuela to urban and integrated Venezuela, and thus the country as a whole, with limited resources (approximately $50 billion at 1998 prices), built the most sound and technologically advanced electrical system in Latin America. Service in most regions was comparable to industrialized countries and covered some 96 percent of the population. All of this was possible thanks to a professional management, respectful of the criteria of planning, engineering design, quality of construction and maintenance. Between 1998 and 2013, with financial resources of at least $58 billion dollars at 1998 prices, the Venezuelan electrical system showed the worst measures of management in all of America. The chain of production (generation-transmission-distribution) until 1998 was designed based on the standard of firm capacity, meaning that a single isolated failure of an installation would not affect service. Beginning in 1998, the substitution of planning by improvisation, the deprofessionalization of the sector, the use of unskilled foreign engineering and the neglect of maintenance policies have left the system unable to respond to a simple failure without affecting service. The 765 kV network is made up of three independent lines that feed the 400 and 230 kV systems. This system was designed so that in the event of the unavailability of one circuit, the other two could transport 100 percent of the demand, and in case of a second simultaneous event, the available line could bear 50 percent. Based on the almost nonexistent technical information from the authorities, what happened was the failure of one of the lines that leaves the San Gerónimo substation. If the national system had been operating under the operational safety limits, without overloading the 765 kV network, and if it had completed maintenance programs on the lines and associated substations, the system should have worked, isolating the failure. The power flow should have adjusted to the available facilities without affecting service. The talk of sabotage is only a pretext for hiding the state of deterioration of the Venezuelan electrical system.

Dan Hellinger, professor of political science at Webster University in St. Louis: The widespread electrical blackout is bad news politically for the Chavista government. While raising the specter of sabotage, President Maduro himself admits that systemic problems contributed to the outage. 'We must consolidate the balance between generation and consumption, focusing efforts on system security against calculated sabotage,' he tweeted. The widespread nature of the blackout was due neither to sabotage nor poor maintenance but rather to the design of the grid. The problem affected a portion of the grid where 50 percent of the country's electricity passes. Infrastructure problems and overconsumption, combined with prolonged drought, produced severe electrical outages in 2009, prompting the government to launch efforts to upgrade transmission equipment and create more public consciousness about energy conservation. Despite perceptions of profligate electricity use, Venezuelan consumption of kilowatts per capita, according to World Bank data, is approximately the same as Chile's. With a government desperate to recover popularity, and an opposition determined to blame every malady on the ruling party, reactions are predictable. The incendiary charges of electoral fraud, with limited evidence, that Henrique Capriles launched after the April election, have ratcheted up political tensions and encouraged the extremist sectors in the opposition. The opposition claims an explosion that killed 40 people at the Amuay refinery in 2012 was due to poor maintenance; the government says a suspicious quick release of gas points toward sabotage. Sabotage of the electrical grid would not require a bomb; a computer virus would do the trick. Sorting truth from fiction in polarized Venezuela is difficult.

José Aguilar, Chicago-based international electrical systems consultant: Both the Venezuelan government and some critics are wrong in their responses to the nation's largest-ever blackout, which occurred on Sept. 3. The government's response, their 'standard excuse' of sabotage by the political opposition, is simply preposterous. Likewise, to cite a lack of investment is irresponsible. Since 1999, $85 billion (in 1998 U.S. dollars) has been allocated toward the grid's infrastructure, mainly for power generation. This large expenditure has been plagued by mismanagement, cost overruns, corruption, delays and lack of a proactive maintenance culture, which translates into dismal availability for the thermal generating fleet of 60 percent. This is not a formula for success. The root cause is that the government's induced policies are stifling energy for the country's industrial and commercial base, both private and state-run companies. The crisis is induced because the present government of Venezuela received almost 20,000 MW of installed capacity in 1999, with a reserve operating margin of close to 4,000 MW. By 2012, this margin had evaporated and turned into a nearly 3,000 MW deficit, even though the government received all the plans and technical road maps to proceed and maintain the electrical service. The government also cancelled 12,000 MW worth of hydropower works and went thermoelectric without building the required supportive infrastructure. The country guarantees no-bid contracts by decree, which continues to drain the country's oil revenues. To solve Venezuela's energy crisis, the country must go through a regime change, since it is incapable of rectification, coupled with transparency, hard work and ethics. Venezuelan citizens are called wasteful users by the government, yet users are completely defenseless. The 2010 electrical law prohibits access to the grid information, which the government has hidden since Nov. 16, 2010. This aberrant law could send someone to prison for up to 16 years. By contrast, a rapist would only go to jail for 14 years. When this law is abolished, the ugly truth will come to light.

Republished with permission from the Inter-American Dialogue's weekly Energy Advisor