Venezuela’s Faulty Power Grid Risks Derailing Economic Comeback
(Bloomberg) --
Venezuela announced emergency measures to stabilize its power grid after electricity consumption hit a nine-year high this week, reviving memories of blackouts and rationing that once crippled the economy.
The Electricity Ministry didn’t detail the measures, but urged the private sector to conserve power and reiterated a ban on energy-intensive crypto mining. It said rising temperatures and increased economic activity were fueling excessive consumption, which it said reached more than 15,500 megawatts on Thursday.
The renewed strain on the power system threatens to complicate the government’s push to revitalize the oil, mining and industrial sectors after years of underinvestment in its hydroelectric dams and transmission lines.
Much of the country is already subject to rolling blackouts, especially outside the capital Caracas. In the western oil-producing state of Zulia for example, residents face outages lasting six hours a day or more.
“We are working hard to recover and stabilize the system. We all need to cooperate,” Electricity Minister Rolando Alcalá said on state TV on Thursday. “The national electrical system is the engine, the core factor, for all development activities in a country.”
Recurring ads on state TV use animated characters to ask Venezuelans to unplug home appliances when not in use.
The measures recall the worst of Venezuela’s crisis in 2019, when a massive blackout darkened the country for nearly a week, paralyzing hospitals and airports. Outages remain common, with factories outside Caracas frequently disrupted by sudden voltage drops and extended cuts causing some to ask staff to work overnight.
The latest warnings cloud investment plans announced since Nicolás Maduro’s ouster in January, including efforts by acting President Delcy Rodríguez to open Venezuela’s oil industry to foreign operators and revive crude production.
Venezuela’s government blamed lingering US sanctions for worsening strains on the power grid, which it says has restricted access to financing and spare parts needed to maintain and upgrade the country’s aging electricity infrastructure.
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