Oil at $21 per barrel, a looming credit event, goods shortages, very high inflation, political conflict…oh, and the place where most of our electricity comes from is drying up. Almost forgot that one.

We’re starting to find some stories about how low is the level of the Guri reservoir in the news. Expect many, many more in the months to come.

How bad is it? Have a look:

image

Those purple marks well below all the other lines, that’s 2016. It’s the worst it’s ever been. We’re even lower than in 2003, which was the previous record low.

According to the Guri manual, we should be rationing. And we probably are. But even with rationing, and even in the middle of a economic contraction that means weaker demand for electricity, the rate of decline (the slope) does not seem slower for 2016.

So what do you do then? Well, normally you balance the load using thermal power plants. Except we know who got those contracts. So more efficient consumption? Except power prices remain fixed, in nominal terms, with three-digit inflation.

So…we’re down to Plan D: praying for the rains to arrive in April. In an El Niño year.

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Economist and Consultant in Economics and Public Policy at ODH Grupo Consultor in Caracas. Barbara is the co-author, with Richard Obuchi and Anabella Abadi, of "Gestión en Rojo" published by IESA. She loves everything related to oil and energy (except for corruption, pollution and inefficiency). Fan of Fargo, GoT and House of Cards.

22 COMMENTS

  1. Flip, …flip, …flip. “Ah! Here it is!” Meet at 3 AM wearing black-face and robes, near bonfire. Once assembled, partake in ceremonial dance, then proceed to toss three dead cows into reservoir for cleansing purposes. ( Chapter 9, paragraph 14, Santero Economics) “That should do it!”

  2. Always a good sign when what separates us from the middle ages is signing ‘Que llueva, que llueva, la vieja esta en la cueva”…….

  3. The Opsis website, which used to have a lot of useful information on Guri, with water levels and such, went offline several years ago. I had assumed that Chavismo had made Guri data disappear from the accessible parts of the Internet. Apparently Guri data is still there. I didn’t locate the graph, but I did locate the current level of 253.69.

    Good searching, Barbara! You found what I had assumed was lost.

  4. Everything will be solved once Salas is appointed as minister of Electrical Energy.

    Because, you know, the crisis is just perception.

  5. Tell me Bárbara, did you like the second of Fargo? because i didn’t. Well only Kirsten Dunst acting. Nothing like the first season.

  6. That’s not to mention the dire disrepair of the Guri turbinos, which even two years ago were acting up. Word from friends in the energy sector is they haven’t been properly maintained for going on fifteen years because most of the qualified engineers went the way of CADAFI. If black outs don’t start happening soon, then there really is a God. But bad as the energy sector is (the power grid is supposedly held together with duct tape), an even greater emergency is happening in the hospitals and pharmacies, where limbs are being unnecessarily amputated and cancer patients are dying and mental health patients are going without and operations are simply not being performed for the lack of medicines. The medicine crisis is really something that CC needs to address. My daughter is doing her residency in Caracas and dreads going to work because there is no freaking medicine, not even IV to combat dehydration.

  7. Two comments:

    1) This is the result of the overwhelming planning and maintenance policies of the bolivarian government. During my master program at UCV, the hydrology professor telled us many, many times about the lack of criteria for a fair management of the reservoir and the absolute lack of a coordinated strategy for the watershed conservancy (the primary reason for the existence of Canaima National Park. No, it was not the tepuis and the Angel Falls), and the diversification of the energy generation matrix.

    Also at the momment, late 2010-early 2011, it was very known the poor maintenance of the machinery at the hydroelectrical power plants of the Caroní river, with only half of the installed capacity working properly. The answer was to allow massive imports of electrical machinery, diesel-powered plants in particular, growing the bank accounts of the bolichicos resulting in the biggest fraud in our history, and an absurd burning-whatever-you-have-at-a-hand policy to produce electricity in homes, malls, and factories.

    So, people of Maracay, when you wonder why the massive transportation systems planned for the city and environs were not thought around electrical, environmentally friendly units the answer is: Electrical shortage, let’s burn diesel, it’s cheap. The same applies for the restructuration of Transbarca in Barquisimeto and why its catenaries are nowadays a nice and very expensive old-shoes hangings.

    Of course this issue of policy coordination between things so elementaly tied like energy, environment and economy is not the hardest point in these Revolución times.

    2) It would have been nice to include the whole data series. As El Niño is a 5-7 years cycle the series would have shown the recurrent crisis in 2002 (not very remembered by the electricity but by the Caracas water input shortage, the one that was succesfully surfed by Jacqueline Faría, currently remember by the unhappy phrase of “let’s enjoy those nice queues” of the food shortage of today), 2010, and the current one in 2015-2016. Three strikes, out! I hope that applies too.

      • Pues Rodrigo,

        El profesor de la cátedra de hidrología del posgrado entonces, José Rafael Córdova, es posible que tenga parte de esos registros. Otra persona que sí debería tener los registros es José Aguilar, quién ha escrito varios artículos y ha dado conferencias sobre el asunto (aparecen registros en la red desde 2010 cuando la crisis eléctrica de entonces).

        Del profesor Córdova es el único que pudiera decirte dónde ubicarlo en persona, aunque también lo puedes ubicar en la Central, en el edificio donde está el Laboratorio de Hidráulica.

        En internet ubiqué dos archivos que discuten el tema y presentan gráficas históricas desde 2000 a 2010, uno de EDELCA y otro elaborado por José Aguilar. Conclusión que por encima sale de ambas es que sí, la sequía es recurrente, pero el manejo ha sido deficiente por la pobre y poco coordinada operación del parque termoeléctrico. Es más, hay un listado en el archivo de EDELCA que menciona un montón de centrales térmicas planificadas para 2012 y si de la veintena que mencionan han llegado a construir 8 a la fecha (7 años después) es mucho.

        A José Aguilar no lo conozco, pero es bastante relevante en los medios por lo que indica la pesquisa en google. Su twitter es @800GWHMWH

        Acá no se pueden esos colgar archivos, pero por un correo te pueden llegar.

  8. If we can stand “El Bachaqueo”, $250 billion dollars unaccounted, the fiasco at the Colombian border, the trickery at the TSJ, even Crashtor Maldonado and 16 years of a lot more stuff..(do you remember La Guaira Bridge?). Then why not another power crisis that by the way was expected to happen due to El Niño?.

    If one thing Chavismo has achieved is to inject powerful amounts of dumbness in people’s mind. In the 4th Republic, a lot of things would have been burned prior to stand such amount of ineptitude. Of course, not necessarily advocating for La Salida but LORD HAVE MERCY!!!

    Back in 2010…

    http://www.aporrea.org/actualidad/n156182.html

  9. Solution: Raise electricity rates to the level “the market will bear”. People will reduce consumption, and you will raise the money to at least start the rehabilitation of the system.

    • Your solution doesn’t take in count this little problem: Most the consumers even aren’t registered as ones by any of the electrical distribution companies, so raising the price won’t reduce the use of the energy.

      With no money to import counters, the pay-for-what-you-use or even a decent cadastral registry to apply a flat-tariff-per-household policy, no consumer-oriented measures will be effective.

      • I was only being half serious. My solution (while I believe it makes sense from a market perspective) isn’t used even in countries that function well, much less Venezuela.

  10. I dont have the Guri data but one thing I know is that a lot of refined products that could now be part of Venezuelas oil exports bringing much needed forex revenue is being burned in Venezuelan plants to maintain electric supplies to big Cities and which formerly would have come from Guri . The cost to the country is not only in terms of the public money getting stolen but of the hundreds of thousand of bls of products which cost a lot to refine and which are being consumed at a total loss to the countrys finances.

    • Yup. It’s called “loss of opportunity” cost. But, then I doubt that Luis Salas could grasp that, being as how it is a “Capitalistic” concept.

  11. I would love to see a post on this website on the breaking point for people who can leave the country. When is all hope lost? When should you pack your bags and get the hell out (assuming you have the means and passports, etc.)? Many people say Venezuela is well past the point of no return –something that I agree with more and more– nevertheless, every time the opposition makes the slightest of ‘wins’ people start dreaming as to the many reconstruction and transparency efforts that will have to take place to rebuild the country. Do you know what I’m getting at? Yes, this may be an El Nino year and there might be incredible power cuts during the very dry summer months. It will be bad; the situation will get worse–such is life in this tropical wonderland. When is the moment when you should simply bail and leave to start building a new life and company in some other country? Could 2016 be the year? Venezuela will default on its debt, oil is in the shit hole, we don’t have food or medicine, and we’re soon to have no electricity! It’s fucking Africa!! It’ll take two generations to grow Venezuela back into a rich country

  12. I would like to see a story on the state of the Venezuelan oil fields and refineries. I understand they are in equally bad condition, and that the Paraguana complex is still shut down following a blackout 2 weeks ago.

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