Venezuela struggling to restore thermal power units

Venezuela´s state-owned utility Corpoelec and state-owned oil company PdV are struggling to restart thermal generating units in the wake of successive catastrophic blackouts triggered by a breakdown of the Opec country's main hydroelectric complex.

Barely 6GW of Corpoelec's 34GW of total installed thermal and hydroelectric generation capacity was operational as of mid-April, according to an internal electricity ministry grid assessment commissioned by new electricity minister and Corpoelec chief executive Igor Gavidia after his 1 April appointment.

Venezuela's grid will be "unstable and vulnerable to major failures and resulting national blackouts for several years until necessary repairs and modernization are completed," the grim report indicates, estimating that up to $15bn of generation and transmission investments are required to restore the grid.

Since the first of the blackouts swept Venezuela on 7 March, most of the country remains with sporadic if any power supply and related municipal water service. Western Venezuela is particularly hard hit.

The April grid assessment reviewed by Argus states that Venezuela needs at least 13GW of electricity to meet current estimated national demand without resorting to supply restrictions.

Corpoelec reported 3GW of operational thermal capacity nationally in early April, with the other 3GW consisting of hydropower generated in Bolivar state by the 10GW Simon Bolivar (Guri) complex and the 2GW Caruachi and 2GW Macagua complexes located downriver from Guri. Hydro assets in the Andean states of Táchira and Mérida are off line, the report adds.

The assessment cautions that with only 16pc of Corpoelec's thermal assets of 19GW currently in service, Venezuela cannot offset new breakdowns of its hydro generation and transmission assets. Corpoelec's decades-old 765kV transmission system linking Guri to the rest of Venezuela has collapsed some 30 times since 2016.

The assessment also warns that Venezuela is at imminent risk of more blackouts that could leave most of the country in the dark for over a month if the only operational transformer feeding the critical 765kV Guri substation breaks down.

Two of the Guri substation's three large-capacity auto-transformers have been out of service since the first blackout on 7 March left 21 of 23 states without electricity for over a week.

"A failure of the Guri substation's only operational auto-transformer could cause a blackout nationally that could last up to 40 days until new transformers are imported and installed," the report adds.

The western state of Zulia, which hosts PdV's oldest fields, is dark for up to 20 hours a day because "only 300MW or 12pc" of its local installed thermal capacity of 2.5GW was operational as of mid-April.

Zulia´s thermal assets include the 1.4GW Termozulia complex near Maracaibo, which is capable of generating only 300MW at best. Idle thermal units in Zulia, including 660MW Ramón Laguna, 266MW Rafael Urdaneta, 61.6MW Casigua, 36MW Santa Barbara, 32MW Concepción and 40MW San Lorenzo, are out of service for lack of parts and feedstock, mainly diesel and natural gas.

Electricity supply for PdV's core operations including its export terminals at the 940,000 b/d CRP refining complex in Falcón and the Jose processing and terminal complex in Anzoátegui state have depended on Corpoelec's fragile grid for nearly a decade as the oil company´s own generation capacity broke down from lack of maintenance.

Since successive blackouts last month disrupted PdV's operations, the company has redoubled efforts to repair and recommission dedicated generation assets in its operational areas, an oil ministry official told Argus. The company has managed to resume tanker loadings at Jose this month, but little progress has been made elsewhere because of the combined impact of structural gas and diesel supply deficits, US sanctions, financial duress and a scarcity of skilled electrical engineers and workers.

PdV owns and operates 31 thermal units with total capacity of nearly 2.9GW, of which 20 units with a combined capacity of 1.7GW are out of service and a remaining 11 with capacity of 1.2GW currently generate only 770MW.

Corpoelec is prioritizing supplies for PdV, but at the expense of supply to urban and rural areas in the interior of the country, and non-oil manufacturing and commercial activities, the electricity ministry said.

Venezuela´s president Nicolas Maduro blames the blackouts on sabotage coordinated from abroad, and several Corpoelec officials have been arrested.