Energy & Environment
Venezuela is shutting down for a whole week — thanks to a crippling electricity crisis Updated by Brad Plumer on March 17, 2016, 1:20 p.m. ET @bradplumer brad@vox.com
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 No luz is never a good thing. (Juan Barreto/AFP/Getty Images)
Commuters in Washington, DC, thought they had problems when the city's Metrorail system closed for 24 hours on Wednesday for emergency repairs.
But that's nothing compared with what's happening in Venezuela, where the entire country is shutting down for a week to cope with yet another crippling electricity shortage.
On Wednesday, President Nicolás Maduro announced that all workers will need to take an extended five-day Easter holiday to conserve power. The country had already been rationing electricity due to reduced output from its hydropower dams. Stores have had to cut their hours. Residents have been left in the dark for days at a time. It's a disaster for a country already reeling from a recession, high inflation, and food shortages. (The crash in global crude oil prices has hit oil-rich Venezuela particularly hard.)
Partly this is a story about drought. Nearly 65 percent of Venezuela's electricity comes from hydropower, and a lack of rainfall this winter has led to critically low water levels at its crucial Guri Dam. The massive El Niño in the Pacific deserves some blame here.
But the much bigger story here is that Venezuela's socialist government has badly mismanaged the electric grid for years. Since 2000, the country has failed to add enough electric capacity to satisfy soaring demand, making it incredibly vulnerable to disruptions at its existing dams. Venezuela has been enduring periodic blackouts and rationing ever since 2009 — and there's no sign things will improve anytime soon.
How Venezuela mismanaged its electric grid — leading to periodic blackoutsTo understand how Venezuela, a country with the world's biggest oil reserves, can keep suffering from energy shortages, we have to look closer at the country's grid. The vast majority of the country's electricity comes not from fossil fuel generators but from hydroelectric dams — particularly the massive 10.2-gigawatt Guri Dam in the eastern part of the country:
/cdn0.vox-cdn.com/uploads/chorus_asset/file/6205327/Screen%20Shot%202016-03-17%20at%2011.13.44%20AM.png) <img alt=" " src="https://cdn1.vox-cdn.com/thumbor/CDbwcT0afgZPuYifishMLSIrRIg=/cdn0.vox-cdn.com/uploads/chorus_asset/file/6205327/Screen%20Shot%202016-03-17%20at%2011.13.44%20AM.png"> ( Energy Information Administration)Most of the time, hydropower is a clean, reliable source of electricity. The trouble occurs when there's a drought and water levels in the reservoir fall too low to spin the dam's turbines. (The Guri Dam is very, very close to this point right now.)
This problem isn't unique to Venezuela. Any place that relies on dams faces this risk. California has seen its hydro output plummet in the past few years amid a historic dry spell. The difference is that California has excess electric capacity elsewhere — natural gas turbines, mainly — that it can fire up to compensate.
Venezuela, crucially, doesn't have a good backup plan if its dams fail. And that's where the years of mismanagement come in.
In the 2000s, after Hugo Chávez came into office, investment in new electric capacity in Venezuela dried up, particularly after he nationalized the grid in 2007. But demand for power kept soaring after the government froze electricity rates in 2002 and began subsidizing consumption. More and more people bought air conditioners, TVs, and so on. Today, Venezuela's per capita rate of electricity use is one of the highest in Latin America.
Those two trends have put a severe strain on the grid. "Between 2003 and 2012," notes the US Electricity Information Administration, "Venezuela’s electricity consumption increased by 49% while installed capacity expanded by only 28%, leaving the Venezuelan power grid stretched." It doesn't help that many households connect to the grid illegally, tapping into existing power lines.
The first big crisis hit in 2009-'10, when an extended drought caused water levels at the Guri Dam to plummet. Rolling blackouts ensued, and the government struggled to cope, forcing companies to take a week-long holiday, fining large electricity users for excessive consumption, and ordering businesses, factories, and mines to reduce output. Chávez's popularity plummeted to the lowest point of his presidency.
In the months after, the government scrambled to fix the situation, spending $1.5 billion to install backup diesel generators throughout the country. It wasn't nearly enough. A year later, experts were warning that only a quarter of those generators were even operational, due to a lack of maintenance and fuel. And the country's transmission lines remained in shoddy shape, unable to handle major fluctuations.
So the electricity crisis never really receded. Further blackouts hit in 2011, in 2012, in 2013, in 2014, in 2015, and now again in 2016. And there's no end in sight.
What would it take to fix Venezuela's grid? Money, basically./cdn0.vox-cdn.com/uploads/chorus_asset/file/6205651/GettyImages-143079017.jpg) <img alt=" " src="https://cdn1.vox-cdn.com/thumbor/rYxLOIiRtLueBKIkypxEwijZI-s=/cdn0.vox-cdn.com/uploads/chorus_asset/file/6205651/GettyImages-143079017.jpg"> (Independent Picture Service/UIG via Getty Images)The Guri Dam in the state of Bolívar, Venezuela.Back in 2011, the Inter-American Dialogue asked a number of the country's energy experts how Venezuela could fix its electricity woes. They all basically said the same thing — "a well-executed investment plan." Venezuela needs upgrades to its existing dams, reliable sources of backup power during droughts, and a sturdy grid. That all costs money. No way around that.
Granted, that's easier said than done. Experts say one big reason for the lack of investment, for instance, was that electricity rates were kept artificially low after 2002. Reversing this situation, and hiking people's power bills, is never going to be a popular move. Yet the alternative is just as ugly.
There have been a few minor moves in the direction of reform: In 2014, the government did begin to pare back subsidies for electricity consumption in some regions. But during the latest crisis, Maduro hasn't laid out much of a long-term plan. Instead, he's largely blamed El Niño and mysterious "saboteurs" for the shortages. And the government has mainly focused on short-term rationing, just as it has during previous crises.
"We’re hoping, God willing, rains will come," Maduro said in a national address Saturday, according to Bloomberg. "Look, the saving is more than 40 percent when these measures are taken. We’re reaching a difficult place that we’re trying to manage."
Read more: Venezuela has bigger oil reserves than Saudi Arabia — yet there's no toilet paper in stores
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