Archive for January 16th, 2010

The electric crisis in Venezuela: Cancelling Alto Caroni and nationalizing the elctric sector

January 16, 2010

Forgotten in the debate about the electric crisis are two decisions made by the Chavez administration which are key in understanding the current electricity shortage, independent of how many Guri turbines are out of order which is the real problem even if Chavez continues to blame El Niño for the gallery: The first one is the decision to halt the construction of four (not three as I indicated earlier) dams in the Alto Caroni and the decision to nationalize the private electric sector.

The Alto Caroni dams: The Alto Caroni dams was a hydroelectric project for building four dams in the Upper part of the Caroni River (Guri is in the lower part). The four dams were in an advanced stage of design and practically ready to be started when Chavze arrived in power. They were Tayucay (1.800 MW), Eutobarima (2.700 MW), Aripichi (2.800 MW) and Auraima (2.700 MW) for a total of 10,000 MW in ne generation capacity.

It was Jorge Giordani, named czar of Venezuela’s economy last night after ruining it for eleven years, who argued then that Venezuela had energy for 500 years and that the Alto Caroni was not an option that should ever be needed. Giordani, an electric engineer as an undergraduate, said that the environmental impact of these dams was too large and instead the Government should focus in the use of thermoelectric power plants that use gas. However, the Tocoma project in the lower Caroni was never canceled, it was delayed and it was not until 2006 that the bidding was opened to begin the excavation of the dam.

Chavez however did not cite this issue when he said it was the oligarchy (?) that wanted this project in the Alto Caroni, which would have increased our dependence on the Caroni are and saying imagine what a crisis we would be in because El Niño. Which clearly shows he does not understand the issue, first of all these dams would not exist as of yet, if Tocoma which was further ahead in the planning is not ready (2012? more like 2014), these would not be ready. But Chavez seems to think that it is the flow of the Caroni river that matters, not the potential energy stored in the water of the dam. Once the dam is filled, the flow is unaltered by the presence of the dams, in fact that is one of the reason why dams are built to save flow from the rainy season for the dry season.

The reason hydroelectric power is attractive is simple: Cost. The large cost in a hydroelectric plant is building the dam. Once it is over maintenance should be cheap (If you do it!). In countries like Venezuela it is even cheaper to bulid dams, because there is no ost associated with buying out the land.

There are typically three issues associated with the environment in building dams: indigenous populations, wildlife and water quality. Water quality is not relevant here as these dams are not used for drinking water. The usual problem is that building the dam alters the quality of the water and may deteriorate it. The largest history in building dams in other countries in terms of wildlife has been species which may become extinct and altering fish traveling patterns. The latter is once again not relevant here. The former is, but when Guri was built it was determined that there were no threatened species, the problem was more helping the migration of species present in the area.

However, thermoelectric power plants are also problematic in terms of the environment and long term imply not only a higher cost, but a long term fuel commitment, read less oil for export which the way we are going may become an issue soon in any case. (Mark my words!)

But in any case, the environmental record of the Chavez administration is simply abysmal, thus even if seem to have forgotten this argument, they can longer claim given everything they are allowing to take place in Venezuela, from the huge increase in CO2 emissions due to cheap gasoline, to gold mining to the Maracaibo Lake eutrification. Only in giving relevance to the problem of Venezuela’s indigenous populations can the administration claim success, even if it has been more hot air than anything.

(PS: There is a lot of BS with Caracas, EDC has capacity of 2,300 MW (or had) Caracas uses less than 2,000, thus bringing “barcazas” to Caracas as the VP said just means they want current power somewhere else.}