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Weekly Report - 14 April 2011 (WR-11-15)

TRACKING TRENDS

VENEZUELA | Energy shortage. A nationwide power cut on 7 April served notice of the continued fragility of Venezuela's electricity system. The blackout was caused by a forest fire damaging a transmission line in Carabobo state, according to the electricity minister, Alí­ Rodrí­guez. Power was restored relatively quickly but the opposition wasted no time in predicting that rationing could be on the cards again this year. Aside from being deeply unpopular, the rationing in 2010, after a severe drought, put a brake on business and industry. A repeat this year would undermine any nascent economic recovery.
Vice-President Elí­as Jaua insisted on state television that the blackout was “an isolated event" and was not the prelude to “a power grid collapse", but despite his assurances there are concerns that the government only managed to add 1,700MW of new generation capacity last year, just one-third of the amount promised by President Hugo Chávez , meaning that demand is perilously close to supply, allowing no room for manoeuvre in the event of another severe drought lowering the water level in the Guri dam. Chávez is promising investment of US$3bn to US$4bn to boost capacity this year.
Rodrí­guez last week called on the population to curb consumption which he called excessive and among the highest per capita in the world (Chávez last year called on people to restrict themselves to three-minute showers) but experts claim that private usage only amounts to 22% of total national usage, with oil and basic industries using half of the total.

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