venezuela power market outlook to 2025 ...reference code gdpe0790icr | publication date june 2015...

REFERENCE CODE GDPE0790ICR | PUBLICATION DATE JUNE 2015

VENEZUELA POWER MARKET OUTLOOK TO 2025, UPDATE 2015 – MARKET TRENDS, REGULATIONS,

AND COMPETITIVE LANDSCAPE

Venezuela Power Market Outlook to 2025, Update 2015 – Market Trends, Regulations, and Competitive Landscape 2 © GlobalData. This report is a licensed product and is not to be copied, reproduced, shared or resold in any form.

VENEZUELA POWER MARKET OUTLOOK TO 2025, UPDATE 2015 – MARKET TRENDS, REGULATIONS, AND COMPETITIVE LANDSCAPE

Executive Summary

Venezuela’s Power Market Outlook

Venezuela’s economy, highly dependent on oil

exports, is influenced strongly by trends in global

oil prices. Between 2004 and 2008, its Gross

Domestic Product (GDP) increased at an average

of XX%. The following global economic crisis in

2009 and 2010 caused negative growth rates of

XX% and XX% respectively. While increased

government spending from 2011 to 2013 helped to

prop up the GDP, a sharp decline in global oil

prices in 2014 again caused a XX% contraction

that year. The residential sector is one of the

country’s strongest drivers of power consumption,

meaning that it increased even when economic

trends went downhill between 2000 and 2014.

Power Market, Venezuela, Gross Domestic Product ($bn) and Annual Power Consumption (TWh), 2000–2014

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

Annu

al p

ower

con

sum

ptio

n (T

Wh)

GD

P ($

bn)

GDP (constant prices) Annual power consumption Source: GlobalData; IMF, 2015 TWh: Terawatt hours

Annual power consumption grew from XX TWh in

2000 to XX TWh in 2014 at a CAGR of XX%.

Generation grew from XX TWh to XX TWh over the

same period and at the same CAGR, largely driven

by growth in thermal power generation.

Power Market, Venezuela, Annual Power Consumption and Generation (TWh), 2000–2014

2000 2007 2014

Ann

ual p

ower

con

sum

ptio

n an

d ge

nera

tion

(TW

h)

Annual power consumption Annual power generation Source: GlobalData, Power Database [Accessed on May 22, 2015]

Venezuela has more than XX rivers and some of

the largest in South America. As a result,

hydropower fulfills the majority of its power

requirements. It accounted for XX% of the total

installed capacity in 2014, followed by gas-based

thermal power with XX%, and oil-based thermal

power with XX%. Renewable sources such as wind

and solar Photovoltaic (PV) made up the remaining

XX%.


Table of Contents


1 Table of Contents

1 Table of Contents ....................................................................................................................... 4

1.1 List of Tables ...................................................................................................................... 7

1.2 List of Figures ..................................................................................................................... 8

2 Introduction ................................................................................................................................. 9

2.1 GlobalData Report Guidance ............................................................................................ 10

3 Venezuela, Power Market, Snapshot ........................................................................................ 11

3.1 Venezuela, Power Market, Macro-economic Factors ........................................................ 11

3.2 Venezuela, Power Market, Supply Security ....................................................................... 13

3.3 Venezuela, Power Market, Opportunities .......................................................................... 14

3.4 Venezuela, Power Market, Challenges.............................................................................. 14

4 Venezuela, Power Market, Market Analysis .............................................................................. 15

4.1 Venezuela, Power Market, Supply Structure ..................................................................... 15

4.2 Venezuela, Power Market, Key Market Players ................................................................. 15

4.3 Venezuela, Power Market, Financial Deals ....................................................................... 15

4.3.1 Deal Volume and Value Analysis, 2004–April 2015 ....................................................... 15

4.4 Venezuela, Power Market, Demand Structure................................................................... 17

4.4.1 Power Consumption by Sector, 2014 ............................................................................ 18

5 Venezuela, Power Market, Regulatory Scenario ....................................................................... 19

5.1 Venezuela, Power Market, Key Electricity Policies ............................................................ 19

5.1.1 Electric Service Law ...................................................................................................... 19

5.1.2 Electricity Restructuring Law ......................................................................................... 19


Table of Contents


5.1.3 Law for the Rational and Efficient Use of Energy ........................................................... 20

5.2 Venezuela, Power Market, Energy Efficiency .................................................................... 20

5.3 Venezuela, Power Market, Renewable Energy Development ............................................ 20

6 Venezuela, Power Market, Capacity and Generation Overview ................................................ 21

6.1 Venezuela, Power Market, Cumulative Installed Capacity by Fuel Type, 2014.................. 21

6.2 Venezuela, Power Market, Cumulative Installed Capacity and Annual Power Generation,

2000–2025 ........................................................................................................................ 22

6.2.1 Cumulative Installed Thermal Capacity and Annual Thermal Power Generation, 2000–

2025 ............................................................................................................................. 25

6.2.2 Cumulative Installed Hydropower Capacity and Annual Hydropower Generation, 2000–

2025 ............................................................................................................................. 28

6.2.3 Cumulative Installed Renewable Capacity and Annual Renewable Power Generation,

2000–2025 ................................................................................................................... 31

7 Venezuela, Power Market, Transmission and Distribution Overview ......................................... 35

7.1 Venezuela, Power Market, Transmission Overview........................................................... 35

7.2 Venezuela, Power Market, Distribution Overview .............................................................. 36

7.3 Venezuela, Power Market, Transmission and Distribution Future Plans ............................ 37

7.4 Venezuela, Power Market, Grid Interconnection ............................................................... 38

7.4.1 Electricity Import and Export Trends, 2000–2014 .......................................................... 38

7.5 Venezuela, Power Market, Electricity Trading ................................................................... 40

8 Venezuela, Power Market, Competitive Landscape: Snapshot of Top Power Generating

Companies ............................................................................................................................... 41

8.1 Key Company in the Venezuela Power Market – Corporacion Electrica Nacional SA

(CORPOELEC) ................................................................................................................. 41


Table of Contents


8.1.1 Company Overview ....................................................................................................... 41

8.1.2 Business Description ..................................................................................................... 41

8.1.3 SWOT Overview ........................................................................................................... 42

9 Appendix................................................................................................................................... 47

9.1 Market Definitions ............................................................................................................. 47

9.1.1 Power ............................................................................................................................ 47

9.1.2 Installed Capacity .......................................................................................................... 47

9.1.3 Electricity Generation .................................................................................................... 47

9.1.4 Electricity Consumption ................................................................................................. 47

9.1.5 Thermal Power Plant ..................................................................................................... 47

9.1.6 Hydropower Plant .......................................................................................................... 47

9.1.7 Nuclear Power............................................................................................................... 47

9.1.8 Renewable Energy Resources ...................................................................................... 48

9.2 Abbreviations .................................................................................................................... 48

9.3 Bibliography ...................................................................................................................... 49

9.4 GlobalData’s Methodology ................................................................................................ 49

9.4.1 Coverage ...................................................................................................................... 49

9.4.2 Secondary Research and Analysis ................................................................................ 49

9.4.3 Primary Research and Analysis..................................................................................... 50

9.5 Disclaimer ......................................................................................................................... 51


Table of Contents


1.1 List of Tables

Table 1: Power Market, Venezuela, Gross Domestic Product ($m), Population (million), and Annual Power

Consumption (TWh), 2000–2020 ................................................................................................. 13

Table 2: Power Market, Venezuela, Completed Deals, 2004–April 2015 .................................................... 16

Table 3: Power Market, Venezuela, Annual Power Consumption (TWh), 2000–2025 ................................. 18

Table 4: Power Market, Venezuela, Cumulative Installed Capacity by Fuel Type (%), 2014 ....................... 21

Table 5: Power Market, Venezuela, Cumulative Installed Capacity (GW) and Annual Power Generation

(TWh), 2000–2025 ...................................................................................................................... 24

Table 6: Power Market, Venezuela, Leading Thermal Power Plants, 2015................................................. 26

Table 7: Power Market, Venezuela, Cumulative Installed Thermal Capacity (GW) and Annual Thermal

Power Generation (TWh), 2000–2025 ......................................................................................... 28

Table 8: Power Market, Venezuela, Leading Hydropower Plants, 2015 ..................................................... 29

Table 9: Power Market, Venezuela, Cumulative Installed Hydropower Capacity (GW) and Annual

Hydropower Generation (TWh), 2000–2025................................................................................. 31

Table 10: Power Market, Venezuela, Leading Renewable Power Plants, 2015 ............................................ 32

Table 11: Power Market, Venezuela, Cumulative Installed Renewable Capacity and Annual Renewable

Power Generation, 2000–2025 .................................................................................................... 34

Table 12: Power Market, Venezuela, Transmission Line Length (Ckm), 2000–2020 .................................... 36

Table 13: Power Market, Venezuela, Distribution Line Length (Ckm), 2000–2020 ....................................... 37

Table 14: Power Market, Venezuela, Annual Electricity Imports and Exports (TWh), 2000–2014 ................. 40

Table 15: Power Market, Venezuela, Corporacion Electrica Nacional, S.A., SWOT Profile, 2014 ................. 43

Table 16: Abbreviations .............................................................................................................................. 48


Table of Contents


1.2 List of Figures

Figure 1: Power Market, Venezuela, Gross Domestic Product ($m), Population (million), and Annual Power

Consumption (TWh), 2000–2020 ................................................................................................. 12

Figure 2: Power Market, Venezuela, Annual Power Consumption (TWh), 2000–2025 ................................. 17

Figure 3: Power Market, Venezuela, Cumulative Installed Capacity by Fuel Type (%), 2014 ....................... 21

Figure 4: Power Market, Venezuela, Cumulative Installed Capacity (GW) and Annual Power Generation

(TWh), 2000–2025 ...................................................................................................................... 23

Figure 5: Power Market, Venezuela, Cumulative Installed Thermal Capacity (GW) and Annual Thermal


Figure 6: Power Market, Venezuela, Cumulative Installed Hydropower Capacity (GW) and Annual

Hydropower Generation (TWh), 2000–2025................................................................................. 30

Figure 7: Power Market, Venezuela, Cumulative Installed Renewable Capacity (GW) and Annual Renewable


Figure 8: Power Market, Venezuela, Annual Electricity Imports and Exports (TWh), 2000–2014 ................. 39



Introduction

2 Introduction

Venezuela is a developing country and a leading global exporter of oil. It is a federal presidential

republic, comprising XX states, and is considered one of the most urbanized countries in Latin

America.

Venezuela is one of the founding members of the United Nations (UN); the Organization of

American States (OAS); the Organization of the Petroleum Exporting Countries (OPEC); the World

Trade Organization (WTO); ALBA, formerly the Bolivarian Alliance for the Peoples of Our America;

and the Union of South American Nations (USAN). The US is Venezuela’s most important trading

partner, and is the recipient of XX% of its total exports (CIA, 2015).

With an estimated Gross Domestic Product (GDP) of $XXm in 2014 (at constant prices) or $XX

billion (at current prices), Venezuela registered an estimated real growth of XX% for that year. The

economy contracted by XX% in 2009 during the global economic recession. As a result, oil prices

witnessed a sharp decrease from $XX per barrel to around $XX per barrel. The global recession

caused the major drivers of aggregate demand including consumption, investment, and

government spending to decline. The GDP again rose from 2011 until 2013 on the back of an

increase in global oil prices. However, the government’s perusal of unorthodox economic policies

and declining oil prices resulted in a sharp downturn of economic fortunes in 2014.

In 2014, the services sector accounted for an estimated XX% of GDP, followed by the industrial

sector with XX% and the agricultural sector with XX%. Venezuela possesses sizable gas reserves,

estimated at XX trillion cubic feet (tcf) at the end of 2013. The country has one of the world’s

largest oil reserves, with a total holding of XX billion barrels as of 2011 (BP, 2014). Around XX% of

export revenues in Venezuela come from oil (CIA, 2015).

The Ministry of Electrical Energy is responsible for exercising general control over the electricity

sector, while the Foundation for the Development of Electric Service (FUNDELEC) is the main

regulatory body. Hydropower is the primary source used for power generation. The Simón Bolívar

hydropower plant, also known as Guri, is the main hydropower plant, supplying a large share of

Venezuela’s electricity. The government has plans to set up a number of gas-fired plants due to the

presence of sizable gas reserves. In coming years, there are also plans to set up a number of

wind-based plants. The first phase of the 100 Megawatt (MW) Paraguana wind farm commenced

operations in 2013.



Introduction

2.1 GlobalData Report Guidance

The report opens with an executive summary that captures the key growth trends in the

Venezuelan power market.

Chapter three provides a snapshot of the key parameters affecting the power sector in

Venezuela and key points about the power market.

Chapter four provides analysis of the power market.

Chapter five details the regulatory scenario of the power market and the inward foreign

investment scenario in Venezuela.

Chapter six provides information regarding Venezuela’s cumulative installed capacity and

annual generation trends as a whole and by individual generation source.

Chapter seven describes Venezuela’s power transmission and distribution infrastructure and

includes information on interconnectors with neighboring countries. It also details electricity

imports and exports and upcoming grid-related projects.

Note: all 2014 market numbers provided in the report are estimates, except where actual data were

available.


Snapshot


3 Venezuela, Power Market, Snapshot

3.1 Venezuela, Power Market, Macro-economic Factors

Venezuela’s economy is strongly dependent on petroleum exports. Its GDP grew by an average of

XX% (constant rates) between 2004 and 2008, but declined between 2009 and 2010 due to the

international financial crisis. Higher government spending between 2011 and 2013 saw the GDP

grow by an average XX% during this period, followed by a XX% dip in 2014 due to a decline in

global oil prices. This downturn is expected to continue and GDP is likely to decline further at a

negative average of XX% between 2015 and 2020.

The population however has seen regular growth, rising from XX million in 2000 to XX million in

2014 at a Compound Annual Growth Rate (CAGR) of XX%. During the 2015–2020 period, it is

expected to grow at a CAGR of XX% to XX million by 2020, bringing with it important implications

for power consumption as the residential sector is one of the top consumers of power.

Annual power consumption increased from XX Terawatt hours (TWh) in 2000 to XX TWh in 2014 at

a CAGR of XX%. A CAGR of XX% is expected between 2015 and 2020 to XX TWh by 2020, driven

by residential sector consumption.


Snapshot


Figure 1: Power Market, Venezuela, Gross Domestic Product ($m), Population (million), and Annual Power Consumption (TWh), 2000–2020

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Pop

ulat

ion

(mill

ion)

and

ann

ual p

ower

con

sum

ptio

n (T

Wh)

GD

P ($

m)

GDP (constant prices) Population Annual power consumption

Source: GlobalData; IMF, 2015



Capacity and Generation Overview

6 Venezuela, Power Market, Capacity and Generation Overview

6.1 Venezuela, Power Market, Cumulative Installed Capacity by Fuel Type, 2014

Hydropower sources dominated the power market in 2014, accounting for XX% of total capacity,

followed by gas-fired plants with XX%. Oil-based thermal plants accounted for XX%, while the

remaining XX% came from renewable power such as wind and solar PV plants.

Figure 3: Power Market, Venezuela, Cumulative Installed Capacity by Fuel Type (%), 2014

Hydropower

Gas (thermal)

Oil (thermal) Renewables

Source: GlobalData, Power Database [Accessed on May 21, 2015]

Table 4: Power Market, Venezuela, Cumulative Installed Capacity by Fuel Type (%), 2014 Fuel type Share

Hydropower

Gas (thermal)

Biomass

Oil (thermal)

Source: GlobalData, Power Database [Accessed on May 21, 2015]


Appendix


9 Appendix

9.1 Market Definitions

9.1.1 Power

Power refers to the rate of production, transfer or energy use, usually related to electricity. It is

measured in Watts (W) and often expressed in kilowatts (kW) or Megawatts (MW). It is also known

as real power or active power.

9.1.2 Installed Capacity

Installed capacity refers to the generator’s nameplate capacity as stated by the manufacturer, or

the maximum rated output of a generator under given conditions. It is given in Megawatts (MW) on

a nameplate affixed to the generator.

9.1.3 Electricity Generation

Electricity generation refers to the process of generating electricity from other forms of energy. It

also refers to the amount of electricity produced, expressed in Gigawatt hours (GWh).

9.1.4 Electricity Consumption

Electricity consumption is the sum of electricity generated, plus imports, minus exports and

transmission and distribution losses. It is measured in Gigawatt hours (GWh).

9.1.5 Thermal Power Plant

A thermal power plant is a plant in which turbine generators are driven by burning fossil fuels.

9.1.6 Hydropower Plant

A hydropower plant is a plant in which the turbine generators are driven by falling water.

9.1.7 Nuclear Power

Nuclear power is the energy released from the fission of nuclear fuel in a reactor.


Appendix


9.1.8 Renewable Energy Resources

Renewable energy resources are those that provide energy that is naturally replenished but limited

in the amount of energy available per unit of time. Biomass, geothermal, solar, small hydro and

wind are examples of renewable resources.

9.2 Abbreviations

Table 16: Abbreviations CADAFE Compañía Anónima de Administración y Fomento Eléctrico

CAGR Compound Annual Growth Rate

CCGT Combined-Cycle Gas Turbine

Ckm Circuit kilometer

CORPOELEC Corporación Eléctrica Nacional

FUNDELEC Foundation for the Development of Electric Service

GDP Gross Domestic Product

GW Gigawatt

GWh Gigawatt hour

IIRSA Initiative for the Integration of the Regional Infrastructure of South America

km kilometer

kV kilovolt

kWh/m2/day kilowatt hours per square meter per day

m/s meters per second

MW Megawatt

OAS Organization of American States

OPEC Organization of the Petroleum Exporting Countries

PDVSA Petróleos de Venezuela S.A.

PV Photovoltaic

tcf trillion cubic feet

UN United Nations

WTO World Trade Organization

Source: GlobalData


Appendix


9.3 Bibliography

BP (2014). BP Statistical Review of World Energy June 2014 [database]. British Petroleum.

Available from: http://www.bp.com/content/dam/bp/excel/Energy-Economics/statistical-review-

2014/BP-Statistical_Review_of_world_energy_2014_workbook.xlsx [Accessed on May 22,

2015]

CIA (2015). Venezuela: The World Factbook. Central Intelligence Agency. Available from:

https://www.cia.gov/library/publications/the-world-factbook/geos/ve.html [Accessed on April 28,

2015]

IMF (2015). World Economic Outlook Database, October 2014 [database]. International

Monetary Fund. Available at:

http://www.imf.org/external/pubs/ft/weo/2015/01/weodata/weoselco.aspx?g=2001&sg=All+coun

tries [Accessed on May 22, 2015]

9.4 GlobalData’s Methodology

GlobalData’s dedicated research and analysis teams consist of experienced professionals with

advanced statistical expertise and marketing, market research and consulting backgrounds in the

energy industry.

GlobalData adheres to the codes of practice of the Market Research Society (www.mrs.org.uk) and

Strategic and Competitive Intelligence Professionals (www.scip.org).

All of GlobalData’s databases are continuously updated and revised. The following methodology

has been followed for the collection and analysis of data presented in this report.

9.4.1 Coverage

This report covers Venezuela’s power market, examining the market structure and providing

historical generation, capacity and consumption forecasts until 2025. It also looks at the market’s

regulatory structure, import and export trends, competitive landscape and leading active and

upcoming power projects.

9.4.2 Secondary Research and Analysis

The capacity, generation and consumption data is collected and validated using a number of

secondary resources including but not limited to:


Appendix


Government agencies, ministry websites, industry associations, the World Bank, IMF, and

statistical databases

Company websites, annual reports, financial reports, analyst reports and investor

presentations

Industry trade journals, market reports and other literature

GlobalData’s proprietary databases such as the Capacity and Generation Database, Power

Plant Database and Transmission and Distribution Database

Further to this, the following secondary information is collected and analyzed to project

Venezuela’s power market scenario to 2025, analyzing factors such as:

Macro-economic scenario

Government regulations, policies and targets

Government and private sector investment

Contract and deal announcements

Utility expansion plans

The sector’s historical track record

Other qualitative insights built through secondary research and analysis of company websites,

annual reports, investor presentations, industry and trade journals, and data from industry

associations

9.4.3 Primary Research and Analysis

Secondary research is further complemented through primary interviews with industry participants

to verify the market numbers obtained through secondary research and obtain first-hand

information on industry trends.

The participants are drawn from a diverse set of backgrounds, including power producers,

equipment manufacturers, industry associations, government bodies, utilities, distributors, and

academia. The participants include but are not limited to C-level executives, industry consultants,

academic experts, business development and sales managers, purchasing managers, plant

managers, government officials and industry spokespersons.


Appendix


9.5 Disclaimer

All Rights Reserved.

No part of this publication may be reproduced, stored in a retrieval system or transmitted in any

form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior

permission of the publisher, GlobalData.

This report is a licensed product and should not to be reproduced without prior permission.

venezuela power market outlook to 2025 ...reference code gdpe0790icr | publication date june 2015...

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