New Market Report: Venezuela Power Report Q3 2012

New Energy market report from Business Monitor International: "Venezuela Power Report Q3 2012"

by Bill Thompson

(WireNews+Co) - Boston, MA - 20 October 2012

BMI View: Venezuela's national energy production capacity fails to meet domestic demand, and while the government makes repeated claims that generation capacity will rise during 2012, there is no indication as to where this additional energy will come from. Major projects such as the Tocamo hydroelectric station will boost capacity, but delays and problems with funding continue to cause concern: in June 2012 the government claimed it would need an additional US$3.3bn to complete the plant. In the meantime, the government will rely on a combination of imported energy and programmed power cuts to cope with demand, while improvements to the transmission grid will also help reduce outages. Presidential elections are scheduled for October 2012 and these have the potential to dramatically alter Venezuela's appeal to international investors.

With outages commonplace, with Electricity Minister Hector Navarro revealing that the government applies 770 megawatts (MW) of 'programmed cuts' on a daily basis, energy shortages are a major problem for Venezuela and the government continues to encourage citizens to use electricity rationally. In Q212 the government repeated its promises to add 4,133MW of power to the grid before the end of the year, but delays to projects such as the Tacoma hydroelectric plant mean that many question how this goal will be realised. Losses in energy transmission are also a concern, although the government claims that improvements to the transmission grid will be in place by July 2012. Another concern is illegal electricity consumption: the government calculates that 30% of electricity is stolen.

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/451415_venezuela_power_report_q3_2012.aspx) (http://www.fastmr.com/prod/451415_venezuela_power_report_q3_2012.aspx)

During the period 2011-2016, Venezuela's overall power generation is expected to increase by an annual average of 2.43%, reaching 123.3 terawatt hours (TWh). Driving this growth is an annual 2.8% gain in hydropower use. Following an estimated 4.2% rise in real GDP in 2011, BMI forecasts average annual growth of 2.3% between 2011 and 2021. The population is expected to rise from 29.4mn to 33.7mn during the period 2011-2021, and net power consumption looks set to increase from 87.10TWh to 98.5TWh by 2016, rising further to 109.5TWh by 2021. During the period 2011-2016, the average annual growth rate for electricity demand is forecast at 2.50%, but this will slow somewhat later in the decade to an average 2.14% in 2016-2021. BMI estimates that the theoretical net import requirement by 2016 will be 12.68TWh, and as much as 15.74TWh by 2021.

Key developments in Venezuela's power sector this quarter include:

- In April 2012, the first phase of La Guajira wind farm become operational; the first phase of the Tacoma hydroelectric plant is also scheduled to begin operations before the end of the year.
- Venezuela's government announced that problems with power transmission would be resolved by July 2012, once the construction of new transmission lines is completed.
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