Chavez Turns to Cubans for Help With Energy Crisis

(rest of the article)
Government investments

However, in order to assist with the recovery of the electricity service, the government is also planning large investments. Chavez said that during March, investments in infrastructure should see an additional 540 megawatts enter the system, or 800 megawatts in the first half of the year, with an aim of 4,000 megawatts for the whole year. Venezuela’s overall consumption is currently 17,000 megawatts.

He said that efforts would be oriented towards Merida state and those regions most affected by the shortages. Merida now has daily two hour long scheduled power cuts, and according to Chavez the government will install 60 additional megawatts in one substation there, which will be ready by 28 February.

Chavez gave further details of specific infrastructure investments, such as upgrades of various thermoelectric plants around the country by 40-80 megawatts, the modernisation of a plant in Carabobo state, incorporating 320 megawatts by the end of March, and adding 175 megawatts to Guayana’s supply. Venezuela’s heavy industries, based in Guayana, have suffered large production decreases due to the lack of energy.

Electricity minister Ali Rodriguez said the government hopes to reduce dependence on hydropower, currently at 70%, to 50%, by increasing the output and number of thermoelectric plants. This will involve an overall investment of over $4 billion, he said.

The government has also been receiving advice from Argentina, Brazil and Cuba, and has signed agreements around electricity with Russia and China. Among the possible plans with these countries, Venezuela is considering a joint wind farm project with Argentina.

“The Argentinians… will arrive on Thursday to help with the creation of new programs for the electricity service,” Chavez said.

Rodriguez also explained that Brazil is restoring the turbines of Venezuela’s main dam, and two of the thermoelectric plants which will be installed to help Venezulea’s large steel plant, Sidor, meet its energy needs, will come from Russia.

Opposition press and spokespeople have generated some controversy over Cuba’s involvement, with opposition papers suggesting that the Cubans are “inexperienced” and calling the Cuban Minister of Information Technology and Communications, who is directing the advice commission “repressive” and “the great censor” (El Nacional, 3 February 2010).

Rodriguez responded that Cuba “has a lot of expertise on the subject of energy saving and efficiency… they’ve carried out extraordinary work in replacing inefficient apparatus, substituting light bulbs and have established a generation plan that …prevents a problem in one place affecting other areas.”

According to Rodriguez, the Venezuelan government has increased electricity generation by 52% over its 11 years of management and reduced the demand on the main hydropower station from 87% to 70%.

Initially, at the beginning of January, the government launched an energy saving plan, involving early shop closing times, replacing incandescent light bulbs with fluorescent light bulbs, and penalising electricity bills by 20% when high energy users failed to reduce usage by 20%. However, the plan only saw a reduction of 4% in total energy use, and as the drought continues, the government explained that more drastic measures are necessary.

http://www.venezuelanalysis.com/news/5127

More on the shortage:
As a consequence of the electricity shortage, the decree announced “a state of emergency regarding the national electricity service… for a period of sixty (60) days…which authorises the minister of electricity to take extraordinary measures”.

Such measures include taking urgent steps so that both private and public entities pay debts owed to Corpoelec, an acceleration of the installation of energy infrastructure, adopting economic and technical measures to conserve the electricity service, and making agreements with “independent national or foreign providers to buy electricity exclusively to address national demand”.

The decree instructs the ministers of education, higher education, communication and electricity to elaborate an education campaign around saving energy.

To address the large rate of illegal or tapped use of electricity, mostly in poor neighbourhoods, by informal street workers, and other businesses, the decree instructs relevant authorities such as police, judiciary, state and municipal governments to support the reduction of unauthorised connections and assist with “the regularisation of the service to those users connected to the network without a contract”.

During his announcement late last night Chavez also said the government has decided to reward and penalise electricity use, with residential users (defined as using less than 500kWh) who reduce consumption by 10-20% receiving a 25% discount on their bill, and a 50% discount for over 20% reduction. Those who don’t reduce use by 10% will receive a 75% surcharge, and those who increase their usage by 10% will receive a 100% surcharge, and by 20%, a 200% surcharge applies.

The commercial sector, Chavez said, should reduce its consumption by 20% in relation to the same month last year – 10% in the first month and 10% more in the next. Failure to comply will result in service suspension of 24-48 hours, and if the violation is repeated, an indefinite suspension.

http://www.venezuelanalysis.com/news/5127

Peter, you don't get it either! lol

It is obvious that the Venezuelan government is doing more than just
talking to Cuba. However, Cuba has had to deal with shortages in the
past, some due to drastic changes in the economy (the collapse of the
soviet union) where instantly the economy was cut in half, and where
they couldn't afford oil for agricultural production, because the US
conditioned the remaking of Russia with at the time not trading with
Cuba. Because of limited foreign exchange Cuba was forced to deal with
shortages, and it did so in ways that rationed what was their rather
than raising prices, and having the rich who pay for it having, and
those who can not going with out. Similarly in Venezuela shortage of
electricity would generally lead to a rise in prices, which the rich
could afford and the poor could not. And so by rationing it, while
trying to provide future sources of electricity they are trying to get
through this.

Again this article is incredibly biased. Though their is real problems
with government beaurocracies in provision of electricity in some
cases, in capital intensive industries where the cost of entering the
market and the scale needed to compete is high, their is little
competition in the free markets. Thus sometimes it is cheaper and more
efficient to provide it through the government, b/c the government can
sell it at closer to cost rather than at the huge profits that can be
demanded under markets that aren't competitive (for instance a patent
on medical goods provides a private monopoly which allows companies to
charge double the price it will go for once the patent runs out). The
same thing happens with electricity. If a private company owns the
dam, and the cost of building a dam ensures lack of competition, the
private company may make incredible amounts of money, whereas if it
were public you could sell the good far closer to cost. In all these
cases you have to weigh the degree of private versus public interest.
I live in Manitoba Canada, and our dams are public and our electricity
sells for cheaper than basically anywhere in North America, b/c though
Manitoba Hydro still makes a profit, it does not make the same degree
of profit that comes generally with natural monopolies. It also means
that the profit distribution in Manitoba Hydro is more equal b/w
workers and managers, also a good thing. We are a developed country
and so we don't suffer from shortages, and we have a range of skilled
workers to adequately do their jobs.

Their is real problem with beaurocracy in Venezuela, especially given
the failures in education prior to Chavez and the dislike for Chavez
among the old educated elite. They need to overcome this through some
reaching out to the old elite, through education of the poor, and in
some cases it may be most efficient to privatize things with price
controls (in cases where natural monopolies might otherwise exist).
Their is no easy answers in underdeveloped countries, and when we
present biased information we don't help the situation.

Of course their is more nuance to this story than others would
suggest. The main stream media will pick up Chavez's discussion with
Cuba on how to deal with the energy crisis but ignore, the more
comprehensive approach taken by the country. First of the energy
crisis is a result of 30 some years of disinvestment, and investment
in infrastructure has actually increased under the Chavez
administration, when the economy went from 25 years of actual
percapita decline in GDP to the growing again. It is also not
mentioned that the shortages are due to a major drought and when you
depend on hydroelecticity as Venezuela does, and you are not a rich
developed country, you are more effected by obscure circumstances.
Very little of us for instance are blaiming Haiti right now anyways
for the people that are in need because we know that they are a poor
country, and are struck by abnormal circumstances. Similarly if the
inadequacy to solve the problem is caused by pro-US policies as in
Haiti, it does not disparrage the US, whereas if the problems happen
to a government that is not supportive of the US we ignore the good
things that are happening and focus on the problems.

To focus particularly on Chavez relationship with Cuba in dealing with
the problem is also misleading.
" On Sunday, president Hugo Chavez announced the creation of a special
fund of $1 billion for the strengthening of the national electricity
system; implementing 59 generation and distribution projects, and 50
operation and maintenance projects...
Also yesterday the minister for Energy, Ali Rodriguez, reported that
Unit 5 of Termozulia, a large thermoelectric plant in Zulia state,
began functioning, adding 140 megawatts to the electricity grid. The
government also inaugurated a new thermoelectric plant in Merida
state, which will generate 12 megawatts and benefit 33,500 people in
the area.

The plant in Merida, one of the areas most affected by the blackouts
over the last few months, cost BsF 22.7 million.

In addition, the government is planning to add 1,692 megawatts between
now and May, and 2,315 megawatts in the second half of the year.
Chavez urged the relevant ministers to speed up the installation and
purchase of electricity generation plants.

“It’s about making more effort to purchase new plants from Russia,
China, Japan and Germany, and bring them here, “ he said.

He added that due to the prolonged effects of the El Niño phenomenon
and the consequent lack of rain, it was important to save electricity
and water to prevent the level of Venezuela’s main dam and electricity
source, Guri, arriving at a level of collapse. Guri provides 70
percent of Venezuela’s electricity needs.

Recently the government launched an energy saving plan, involving
early shop closing times and replacing incandescent light bulbs with
fluorescent light bulbs, among other things, with the aim of reducing
electricity consumption by 20%. Rodriguez said that so far consumption
has reduced by 4%." http://www.venezuelanalysis.com/news/5114

Right on Chavez!! Do good on your people!! If the Imperialist bakers don't like it kick them out!!

jubal, your not getting it are you? Chavez and Castro don't care what happens to their people. Castro for instance has over time taken all the money that he stole from the people and taken it out of Cuba-He owns Cuba! Cuba's money is in foreign banks!!!! Do you understand what that means? The Castro family is one of the richest in the world, but yet Cuba is bankrupted-I wonder why?

The only think that would benefit both Cuba and Venezuela is for the Castros and Chavez to disappear and give the countries back to the people!!!

As for the energy crisis in Venezuela it's the result of communism, that spends the countries resources to expand that damn ideology, not to mention that in rationing everything, they keep people down.

I grew up with the power outages and when I left Cuba in 79 there were still happening and are happening today.

Urban Gypsy is right-the embargo should be lifted once and for all, so that the senile old men, who own Cuba, won't be able to blame it anymore for the Island's problems. If you notice, the regime won't give in to demands of respect to humans rights. They say they want the embargo lifted and they want to talk, but they don't face up to crimes against humanity. On the other hand, neither did China and they now own the US debt. I say lift the embargo!!!

Both Cuba and Venezuela could benefit from bringing in alternative energy production methods to their countries, like wind, solar, and wave energy.

I'll bet the newly discovered huge oil reserves under Haiti undoubtedly extend under Cuba, but Cuba doesn't have the sufisticated technology that America has to create 3D images of minerals and deposits miles under the ground, so perhaps they don't realize that they are sitting on a cash cow.

Venezuela could help Cuba to get at that oil.

Curtis, communism doesn't produce, it just destroys.

On the subject of Ramiro Valdes-We Cubans know him well and he has no knowledge of electricity other then for electroshocks-the preferred method of torture of the Castro regime. He was sent to Venezuela, because he is an expert on repression and torture. God help the Venezuelan people!!

well said:
Lopez said the electricity crisis should be resolved by Venezuelans and not Cuba's vice president. ''I don't think that Mr. Valdez is the most suitable for the job because of what's he's done in Cuba is impose rationing,'' he said ''He's not en expert in investment, maintenance and production.''

Socialist policies and corruption were at the heart of the problem, which was only exacerbated by the drought. It makes no sense to employ "more of the same" to fix it. What they need is more maintenance, better engineering, and real solutions to the energy problem. A nuclear plant would be a better solution than bringing in yet another socialist who hasn't solved Cuba's energy problem.

Hell, they produce boatloads of oil, but can't refine it. You'd think they could use refineries first, then use their own available energy sources to run generators to produce electricity to complement the hydroelectric dams, and nuclear plants additionally and even sell the excess in good years.