Region's Giants Run Risk of Blackouts
By Andrés Cañizález
Brazil, Mexico and Venezuela are the region's energy giants, but they could face electricity rationing if they do not implement sustainable options immediately. The sector requires huge investments, more rainfall for hydroelectric production and sustainable plans for the future.
CARACAS, (Tierramérica).- Three Latin American energy leaders, Brazil, Mexico and Venezuela, face a future of severe electricity supply crises due to the lack of public and private investment in the sector, the failure to implement sustainable plans, the scant diversification of energy sources and the adversity posed by drought.
In the next few years, the Latin American energy sector will require enormous investments and a reversal of the excessive dependence on hydroelectric energy, replacing it with environmentally-friendly options like wind-generated electricity.
Venezuela and Mexico, countries that export petroleum and electricity, are on the verge of confronting difficulties in supplying energy to their domestic markets, as is the case in Brazil.
Although government officials blame the problem on climate-related factors, such as drought, hydroelectric production does not draw the necessary investment to ensure energy supplies, while demand grows each year.
Brazil experienced a severe electrical energy shortage in 2001, which resulted in eight months of rationing, and the country remains in a state of alert. Venezuela could be confronting its most difficult energy situation in May, and while Mexico does not have immediate plans for energy rationing, the country needs long-term policies if it hopes to prevent future blackouts.
The Venezuelan case is a paradox. With an electricity generating capacity of around 19,000 megawatts, the country last year began an ambitious plan for connecting powerlines to Brazil to export electricity to its giant neighbor.
But shortly thereafter, it was forced to import electricity from Colombia in order to make up for the reduced output at the Guri hydroelectric plant on the Caroní River when water levels fell. The Guri is the source of more than 60 percent of the electricity consumed in Venezuela.
Until March, the lack of rainfall meant that the water level of the hydroelectric reservoir remained at 250 meters, just above the record low of 246 meters and much less than the normal level of 270 m. If it does not rain in May, electricity rationing will be necessary in a country that survives by exporting energy, admitted authorities.
The government began a publicity campaign earlier this year to promote the voluntary reduction of electrical consumption by households and industry, though the results of that effort are not yet known. The Venezuelan people, meanwhile, are anxiously hoping that the next few months bring the much-needed rains.
The predicted energy crisis is due to the government's inability to create and sustain investment in the sector and to protect the environmental boundaries of the country's main dam, located in the southeastern state of Bolívar, where illegal mining occurs at the heads of the rivers, as well as deforestation of the Venezuelan Amazon, energy analyst Milko Luis González, of the Central University of Venezuela, told Tierramérica.
In Brazil, meanwhile, President Fernando Henrique Cardoso has highlighted the "educational role" played by the energy rationing imposed from June 2001 to February 2002 in ending the waste of electricity. Eighty percent of the people consulted in a recent survey expressed that they would continue to follow energy-saving measures.
Brazil has an electrical generating capacity of 75,893 megawatts, of which 82 percent comes from hydroelectric sources, 15 percent from thermal sources (diesel, coal, natural gas), and just 2.59 percent from nuclear plants.
Alternative energy sources, such as wind, provide marginal amounts of electricity in Brazil and Mexico, while in Venezuela they do not even figure into official statistics.
Rationing in Brazil was the consequence of two years of insufficient rains, according to the authorities. But energy experts say the problem arose due to lack of necessary investment, the excessive reduction of margins of security, and the fact that the privatization process of the hydroelectric plants was conducted poorly because it did not establish commitments for the sector’s expansion.
The inter-ministerial Chamber of Electrical Energy Crisis Management (CGE), headed by the chief of the presidential staff, Pedro Parente, attempted to confront the crisis through a 20-percent cutback in consumption in Brazil's southeast, northeast and central west.
Although rationing officially ended in February, the CGE acknowledges that the crisis has not been overcome, and new consumption controls could be imposed if the country does not receive enough rain.
Brazilian civil society organizations question the complete privatization of the electrical energy sector, which "constitutes a maximum risk," in the opinion of Roberto Pereira D'Araujo, director of the Institute for the Strategic Development of the Electrical Sector (Ilumina).
Even in the United States, just 10 percent of electricity is produced independently, while 90 percent is generated by private concessions that must comply with strict expansion goals, auditing rules and industry regulations, said D'Araujo.
No sudden collapse of electrical services is expected in Mexico, but the government's Energy Secretariat warns that without investment in infrastructure, the country will have to implement rationing measures in five or six years.
Nearly 100 percent of Mexico's 100 million inhabitants have access to electricity, a service that has mushroomed since 1960, when just 44 percent of the population had electrical service.
The government estimates that the sector requires 67 billion dollars of investment in generation, transmission, distribution, maintenance and engineering for the sector over the next eight years, a period in which consumption is expected to expand 6.3 percent annually.
The official goal is to boost the national electrical system's generation capacity from 37,650 megawatts to 65,000 megawatts, a 42-percent increase.
Nearly 70 percent of Mexican electricity is produced by thermoelectric plants, which depend on petroleum, natural gas or coal, 24 percent by hydroelectric plants, and the rest comes from geothermal, nuclear or wind sources.
The aim of Mexico's plan is to prevent a supply crisis, but the emphasis on non-renewable sources, like fossil fuels, instead of environmentally-sustainable sources, does not guarantee the electrical industry's continued development.
The government of President Vicente Fox is seeking to give the private sector a greater role through a reform of regulations that limit their participation in the electrical industry, following a proposal of his predecessor, Ernesto Zedillo.
Although Fox's idea is that the state would conserve "sovereignty over this resource," the initiative does not have majority support in parliament, where several legislative bills on energy reform circulated last year, but no definitive version came to light.
* Andrés Cañizález and contributors to this report, Mario Osava (Brazil) and Diego Cevallos (Mexico) are IPS correspondents.