Collapse of Venezuela's electricity system: Informing revitalization efforts through energy transition opportunities

Abstract

Venezuela’s electricity sector has been facing a deep crisis. By 2020, the electricity production plummeted to 74.5 TWh, a drastic 43% reduction with respect to the peak of 132.5 TWh registered in 2013. The reasons behind the collapse of Venezuela’s electricity sector are multifactorial and widely described in the literature. However, there is a lack of discussion on how to overcome the electricity crisis, considering the new opportunities provided by the ongoing energy transition paradigm. In this paper, a review of existing views to recover Venezuela’s electricity system is provided. Two public-available detailed plans: the Venezuelan Electricity Sector Recovery Plan (VESRP) and the National Assembly’s Country Plan Electricity (CPE) are described and analyzed in detail. It is concluded that both proposals are pragmatic attempts to restore the reliable hydrothermal model that prevailed until 1998. However, there is a lack of insight about the economic and environmental opportunities of building a decarbonized electricity matrix in account of the existence of huge renewable energy resources. Fulfilling a balance between reconstructing Venezuela’s historic electricity system and building a new decarbonized system is of major significance. Urgent humanitarian needs and the demands of Venezuelan citizens call for the restoration of electricity supplies as fast as possible, but also with a modern system that ensures a low long-run marginal cost that enables competition and ensure economic growth.