Venezuela Power Report Q2 2011

In this report, BMI forecasts that Venezuela will account for 9.73% of Latin America regional power generation by 2015. In order to avoid continuing power rationing, the country needs to slow the rate of growth in electricity consumption and expand generating capacity. Imports from neighbouring countries may be the only solution to near-term power shortages. BMI’s Latin America power generation assumption for 2010 is 1,212 terawatt hours (TWh), an increase of 5.39% over the previous year. We are forecasting a rise in regional generation to 1,438TWh by 2015, representing an increase of 14.44% during 2011-2015.

Latin American thermal power generation in 2010 is assumed by BMI to have been 449TWh, accounting for 37.0% of the total electricity supplied in the region. Our forecast for 2015 is 496TWh, implying 8.52% growth during 2011-2015, trimming the market share of thermal generation to 34.5% thanks to environmental concerns that have led to the promotion of renewables, hydro-electricity and nuclear power. Venezuela’s thermal generation in 2010 is put at an estimated 36.5TWh, or 8.12% of the regional total.

By 2015, the country is expected to account for 7.13% of thermal generation. Oil has historically been the dominant fuel in Venezuela, accounting for an estimated 36.9% of 2010 primary energy demand (PED), now virtually matched by gas at 36.6%, and followed by hydro-electric energy with a 25.9% share of PED. Regional energy demand is forecast to reach 790mn tonnes of oil equivalent (toe) by 2015, representing 14.53% growth during 2011-2015. Venezuela’s estimated 2010 market share of 11.36% is set to ease to 10.71% by 2015. There are no immediate plans to build nuclear reactors in Venezuela. However, in November 2008, the country’s president, Hugo Chávez, announced that, at some stage, Russia plans to aid Venezuela in the construction of its first nuclear power plant.

Venezuela is ranked last, behind even Mexico, in BMI’s updated power sector Business Environment Ratings, in spite of its considerable generating capacity and low level of energy import dependency. The underdeveloped competitive landscape, regulatory issues and the threat of asset renationalisation conspire with country risk factors to deliver a particularly low score that may be insufficient, even over the longer term, to allow Venezuela to challenge Mexico.

BMI now forecasts average annual growth of 2.43% in Venezuelan real GDP between 2011 and 2015, with an increase of 1.90% assumed for 2011. Population is expected to expand from 29.3mn to 31.0mn over the period, with GDP per capita forecast to decrease by 15%. Electricity consumption per capita is expected to increase by just 4% during the period. The country’s power consumption is also expected to increase from an estimated 83TWh in 2010 to 94TWh by 2015, thanks to government efforts to cap demand. A potential supply surplus of almost 11TWh is possible by 2015 after system losses, assuming a forecast 2.1% annual average increase (2011-2015) in electricity generation.

Between 2011 and 2020, we are forecasting an increase in Venezuelan electricity generation of 22.2%, which is near the bottom of the range for the Latin America region. This equates to 12.8% in the 2015-2020 period, up from 8.4% in 2011-2015. PED growth is set to ease from 10.4% in 2011-2015 to 9.7% in 2015-2020, representing 23.8% for the entire forecast period. An increase of 14% in hydro-power use during 2011-2020 is one key element of generation growth. Thermal power generation is forecast to rise by 31% between 2011 and 2020. More details of the longer-term BMI power forecasts can be found later in this report.

Executive Summary
SWOT Analysis
Venezuela Power Business Environment SWOT
Venezuela Political SWOT
Venezuela Economic SWOT
Industry Overview
Global

Table: Global Summary, 2008-2015
Latin America

Table: Latin America Power Generation, 2008-2015 (TWh)

Table: Latin America Thermal Power Generation, 2008-2015 (TWh)

Table: Latin America Primary Energy Demand, 2008-2015 (mn toe)

Table: Latin America Gas Consumption, 2008-2015 (bcm)

Table: Latin America Coal Consumption, 2008-2015 (mn toe)

Table: Latin America Nuclear Energy Consumption, 2008-2015 (TWh)
Market Overview
Primary Energy Demand
Power Generation
Power Consumption
Regulation And Competition
Pricing
Power Transmission
Business Environment
Latin America Power Business Environment Ratings

Table: Latin America Power Business Environment Ratings
Venezuela’s Power Rating
Rewards
Risks
Legal Framework
Infrastructure
Labour Force
Foreign Investment Policy
Tax Regime
Security Risk
Industry Forecast Scenario
Venezuela’s Power Outlook
Generation
Gas-Fired
Oil-Fired
Coal-Fired
Nuclear Energy
Hydro-Electric
Renewable Energy
Power Costs
Transmission

Table: Venezuela’s Power Sector, 2008-2015

Table: Venezuela’s Thermal Power, 2008-2015

Table: Venezuela’s Non-Thermal Power, 2008-2015

Table: Venezuela’s Power Costs, 2008-2015
Assumptions And Methodology
Key Risks To BMI’s Forecast Scenario
Long-Term Power Outlook
Macroeconomic Outlook

Table: Venezuela - Economic Activity
Power Outlook: Long-Term Forecasts
Global Snapshot

Table: Global Summary, 2013-2020
Latin America

Table: Latin America Electricity Generation, 2013-2020 (TWh)

Table: Latin America Primary Energy Demand, 2013-2020 (mn toe)

Table: Latin America Thermal Power Generation, 2013-2020 (TWh)

Table: Latin America Hydro-Electric Generation, 2013-2020 (TWh)

Table: Latin America Nuclear Generation, 2013-2020 (TWh)
Venezuela Country Overview
Methodology And Risks To Forecasts
Competitive Landscape
Edelca
EDC
BMI Methodology
How We Generate Our Industry Forecasts
Power Industry
Cross Checks
Sources

- Edelca
- EDC

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