The collapse of Venezuela's electricity sector from an energy governance perspective

Abstract

This paper analyzes the historical evolution of the Venezuelan Electricity Sector (VES) from the 1940s to the present. The objective is to identify the causes that have led to the current chaotic situation in power supply and propose corrective measures. This analysis is conducted within the framework of the literature on energy governance and extractivism in Latin America (LA). The VES has been conditioned upon the general objectives of energy policy in Venezuela. What has been called extractivism in the 20th century has been prolonged with the neo-extractivism of the 21st century. The country's oil revenues allowed for a highly interventionist energy governance policy, which was implemented hierarchically without the participation of VES stakeholders. On the other hand, the lack of market mechanisms and company financing schemes have led to inefficiencies in the operations of the sector. Finally, the lack of stable regulation, political uncertainty, and the absence of control mechanisms have contributed to the collapse. Due to the importance of electricity for the stability of Venezuela, it is necessary to propose a new and more participative energy governance strategy which also entails to rethink the VES structure and regulation.