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Venezuela upheaval could crack open power sector

Venezuela upheaval could crack open power sector

Caracas, 9 January (Argus) — US intervention in Venezuela's oil market could open its electricity sector up to investment as dilapidated power infrastructure has long held back crude production. Interim Venezuelan president Delcy Rodriguez plans to propose changes to multiple laws, including one governing the electricity sector, she said on 7 January. "We want to update the national electrical service law," Rodriguez told her cabinet. "The Venezuelan we dream of is a Venezuela that demands an electricity service that is in better conditions." The US Department of Energy several hours earlier included as one of its aims in Venezuela "to improve the electricity grid, which is essential to increasing oil production, economic opportunity, and the daily quality of life for the Venezuelan people". The US on 3 January seized Venezuelan leader Nicolas Maduro in a dawn raid before taking him to New York to face drug trafficking charges. The supreme court later swore in vice-president and energy minister Delcy Rodriguez as the new president, with whom the US says it will hold sway in energy policy. Venezuela has seen increasing power outages in recent years, including one in neighborhoods near the site of the recent US raid. The outages have damaged refineries and hurt efforts to increase crude production , which at about 1mn b/d is less than a third of Venezuela's peak output. The situation first began to worsen after late former Venezuelan president Hugo Chavez nationalized multiple utilities and then consolidated this by changing the electricity law in 2010. Multiple private-sector and state utilities had participated in the market before then, although it was dominated by state-generating company Edelca and transmission, distribution and commercialization company Cadafe. But by 2010, Chavez declared Venezuela to be in a nationwide "electrical emergency", a designation that remains in place. Venezuela cut working hours in March 2025 to try to reduce power demand. Renewable in name Venezuela now depends primarily on the Guri hydropower plant with 10GW of nameplate capacity in southern Venezuela, which had provided about 60pc of demand before 1999. Thermoelectric generators such as Planta Centro and others provided more baseload power, but these are now mostly off line because of a lack of funds and fuel. While Venezuela's power generation on paper would appear to be almost fully renewable, the frequent outages mean that residents sometimes resort to fuel-burning generators when supplies are available or burn wood or trash for light or cooking. Of Venezuela's nameplate 34GW in generation capacity, only about 18GW are usable, a study from Venezuelan university the Universidad Metropolitana estimates. The electricity sector has also seen a series of leadership changes and corruption allegations, with many of the same hands in power. Nervis Villalobos, a trusted official under Chavez and the first president of Corpoelec and deputy electricity minister who left the government in 2007, is being tried for corruption and money laundering in Spain. He has also faced money laundering and similar charges in the US. The energy minister during Villalobos' time, Rafael Ramirez, is a fugitive of Venezuelan law. Alejandro Betancourt — tapped as president of the private-sector company Derwick to provide generation during the electrical emergencies — is also un investigated by Spanish authorities. But if Venezuela's power sector can improve, it will join a region increasingly focused on increasing regional cooperation and trade in electricity. Brazil had already resumed some power imports from Venezuela in early 2025, as Venezuela has excess power in some regions that it can more easily move to Brazil than internally. Brazil, Venezuela's neighbor to the south, is also expanding its efforts to better integrate the power grids of South America to reduce emissions and increase regional energy security, including with Boliva . By Carlos Camacho Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.