Power shortage threatens metal production

Venezuela Power Crisis squeezes Guri hydropower amid drought, triggering electricity rationing, industrial shutdowns at Sidor, Alcasa and Venalum, load shedding, and emergency thermal generation by Corpoelec to bridge megawatt shortfalls and stabilize the grid.

In the grip of severe drought and power shortfalls, Venezuela is likely to shut down power-intensive metal production units in a bid to conserve energy.

Venezuelan newspaper El Mundo quoted the nation's minister of electricity as indicating that basic industries including aluminum, steel and bauxite plants would be closed down, if required, to prevent excess load on the Guri hydropower plant in Guyana amid warnings of a power collapse risk nationwide across the grid.

The Siderúrgica de Orinoco CA (Sidor) steel mill and the aluminum smelters of CVG Aluminio del Caroni SA (Alcasa) and CVG Industria Venezolana de Aluminio CA (Venalum) have borne the brunt of the decision, with output already being reduced considerably, while in Brazil an aluminium group ditched a power concession over costs and regulation.

Since last October, the Venezuelan government has been looking to implement a 20% cut in power consumption in the wake of prevailing drought, even as rains in Ecuador lifted hydropower output nearby.

The country's main power source, the rapids on the Caroni River in the Orinoco basin, has lost force due to lack of rain. The Guri hydropower plant, which caters to 66% of Venezuela's power requirements, and three other hydropower projects are on this river, while leaders have sought to tap nuclear energy as a longer-term complement.

The government already has implemented power restrictions in casinos, shopping malls, and bingo halls, apart from forming a commission to ration energy. It also plans to distribute energy efficient light bulbs across the country. The president has announced a 50% cut on power consumption in his palace, and has asked citizens to stop using air-conditioners at night and conserve precious water. Industrial establishments have made alternate arrangements to tackle the situation, including talks on a Russian-built nuclear plant to diversify supply, with steelmaker Sidor installing five generator sets to offset the effects of power rationing.

Venezuela, which was a surplus power generating state prior to the drought, has an installed capacity of 23,000 MW, including thermal power from natural gas, fuel oil, and diesel-based sources. Present shortfall is in the range of 1,524 MW, and dry-season shortfalls remain a risk ahead. However, the country's economy driver, the oil industry, is yet to be hit by the power crisis.

Meanwhile, efforts are on to ramp up thermal energy production in the country on a small scale, as coal demand underscores a changing mix. Corporación Eléctrica Nacional (Corpoelec), the state power utility, is looking to add 80 MW of power generating capacity by initially augmenting output from its Tachira Plant from 10 MW to 30 MW. Subsequently, it will add another 60 MW to the El Vigía substation in Merida. The expansion operation is likely to be completed by June this year. The present power restrictions in the country are expected to continue until May.

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