ELECTRIC GRID COLLAPSE IN VENEZUELA: CONCEPTUALIZINGSYSTEMIC GRID FAILURE THROUGH A MODIFIED F.M.E.A. RISKASSESSMENT

by
Sofia Weir Pierin

A thesis submitted to Johns Hopkins University in conformity with the requirements for the
degree of Masters of Science in Energy Policy and Climate.

Baltimore, Maryland
May 2021iAbstract
A significant aspect of the degrading quality life in Venezuela is the collapse of electric
service, which has seen a long decline since the Venezuelan energy crisis of 2010. This
research argues that the Venezuelan electric grid is locked-into a state of collapse due tostructural deficiencies dating to before the energy crisis of 2010. This collapse has been poorly
explained by mainstream media and largely unexplored by the academic literature, though the
March 2019 full blackout event—with complete loss of service in all states lasting between 3
and 7 days—brought international attention to the degraded condition of the electric grid in
Venezuela. Most information surrounding the condition of the Venezuelan electric grid and the
March 2019 blackout is dominated by politicized content, with the majority of sources failing torecognize the 2019 blackout as an expression of a longer-term failure. Many reports imply
singular technical failures as causes for the blackout, rather than identifying the structural
deficiencies and vulnerabilities across the electric sector which contributed to this failure. The
painful stories of adaptation to dysfunctional public services emerging from the ongoing electric
crisis, in addition to the informational black-out regarding the deeply embedded causes of thiscollapse are the primary motivations for this research—developing new knowledge regarding
the Venezuelan electric grid collapse dynamics through a case study on the Venezuelan electric
sector. This work establishes a new methodology to address the lack of specific technicalinformation from the electric sector through a failure-modes and effects analysis risk
assessment, which successfully discovered additional contributing factors for grid collapse;
including overreliance on hydropower. This work also and identified the mechanisms of failure
leading to the currently degraded state of the Venezuelan electric grid. The understanding
developed in this paper represents a significant and important contribution to the body ofknowledge surrounding grid collapse in Venezuela, and can be utilized as a tool for improving
recovery planning efforts. Additionally, this methodology may be replicated for improvingiiunderstanding of other degraded electric systems, such as those in war-time or post-war
countries, in addition to other regions with weak electric sectors.

iii

Acknowledgements
I could not have put forth this work without the gracious support from my family, friends,
colleagues, acquaintances and others. There are a few who could not go without mention
here—Jeff Petty and everyone else at Shell Valley Consulting in Shell, Wyoming; they let me
guzzle their coffee and use their wi-fi for several months while working on this capstone project.
Also, the invaluable direction from Alejandro Lopez-Gonzalez of the Polytechnic University of
Catalunya—an expert on the subject of the Venezuelan electric sector—who guided me throughhis immense collection of work published online on the subject. Finally, of course, it goes
without saying that this Capstone could not have come to fruition without the guidance andsupport I received from my wonderful mentor, Dr. Liam Phelan, whose thoughtful feedback andpositivity enlightened my work beyond measure. Also, the patience and understanding from my
Capstone facilitator, Dr. Michael Schwebel, in addition to his grounded presence throughout thecourse, enabled me to carry out this work. To all who took part in one form or another—thankyou. My gratitude is endless.

iv

Contents
ACKNOWLEDGEMENTS ................................................................................................................................. IV
LIST OF TABLES............................................................................................................................................... VI
LIST OF FIGURES ............................................................................................................................................VII
1.1
1.2
2.

STATEMENT OF PURPOSE ...........................................................................................................................1RESEARCH OBJECTIVES ..............................................................................................................................2

BACKGROUND - CRISIS IN VENEZUELA ............................................................................................. 3
2.1

ELECTRIC CRISIS .........................................................................................................................................6

3.

LITERATURE REVIEW .............................................................................................................................. 84.

METHODS ................................................................................................................................................. 10
4.1
4.2
4.3
4.4
4.5

5.

RESULTS .................................................................................................................................................. 16
5.1
5.2
5.3

6.

FAILURE MODES ........................................................................................................................................16
EFFECTS ....................................................................................................................................................19
CONCEPTUAL MODEL .................................................................................................................................20DISCUSSION ............................................................................................................................................ 23
6.1

7.

GRID COMPLEXITY AND COLLAPSE ...........................................................................................................10
A BESPOKE FRAMEWORK FOR UNDERSTANDING .....................................................................................11
UTILITY OF MUCKERJEE AND SOVACOOL’S ENERGY SECURITY FRAMEWORK ........................................12
THE MERITS OF EXPLORATORY CASE STUDY RESEARCH ..........................................................................13
FLEXIBILITY, LIMITATIONS, CONTROLS ......................................................................................................14

AMPLIFYING OR DAMPENING FACTORS ......................................................................................................25

CONCLUSIONS ........................................................................................................................................ 28

WORKS CITED ................................................................................................................................................. 29
APPENDIX 1 – NATURE OF INFORMATION ................................................................................................ 35
Why is it so difficult to find information regarding the current state of Venezuela? ................................35
What are the primary modes of dissemination of information regarding Venezuela’s grid collapse? .35v

List of Tables
Table 1 - Stated Causes of Collapse as Found in Literature (Failure Modes) ............................16
Table 2 - Energy security constructs organized under five categories, with each category listed
as a column in the table. ...........................................................................................................19
Table 3 - Collection of important evidence supporting relationships between nodes .................23vi

List of Figures
Figure 1 - Venezuela's GDP in current prices from 1984 to 2019 in billion international dollars.
From (Plecher, 2020; Plecher, 2020). ........................................................................................ 4
Figure 2 - Conceptual Model of Grid Function in Venezuela......................................................22
Figure 3 - Conceptual Model of Electric Grid Collapse in Venezuela. ........................................29

vii

1.

Introduction

1.1

Statement of Purpose
The purpose of this research is to carry out a case-study analysis of the current state of

the electric grid in Venezuela—understanding vulnerabilities related to energy policies, technicaldeficiencies and sociopolitical conditions as interrelated causes of the systemic collapse of the
Venezuelan electric grid. This work analyzes recent changes to the Venezuelan electric
sector—resulting from political, social, and technical factors—and attempts to discover theactual mechanisms of electric grid collapse while taking into account commonly cited causes.
As a result, this work dives into many different types of literature, including the limited academic
work on the subject, a vast collection of grey literature (news media with varying types of bias),state-controlled media, independent blogs, and social media posts.
This research proposes to utilize existing literature and online content which gives
insight into perceptions of causes of grid collapse, to draw a clearer and more comprehensive
conceptual model of the conditions which interacted to result in the Venezuelan electric gridcollapse. Organizations such as the Center for Strategic and International Studies (Rendon,2020) and the Council on Foreign Relations (Angelo, 2020) have focused their attention on thepotential “day after scenarios” which look at different available pathways for recovery andreconstruction in Venezuela. Such studies continue to rely on limited information regarding themechanisms contributing to grid collapse, and as such are constrained in their ability to directly
construct an approach to rebuilding critical public services. This work proposes to provide
valuable detailed information regarding the electric system collapse dynamics in an effort toinform stakeholders, planners, and external parties tasked with developing a “day after” plan forelectric system recovery. Additionally, this work provides a foundation upon which larger

1analysis can be built, in particular regarding electric grid collapse dynamics in a generalized
context.

1.2

Research Objectives

The specific objectives of this research project are:
1. To catalog causal factors for electric grid collapse in Venezuela, including those related
to:a. Policy/political factors
b. Social or societal factors
c. Physical/technological factors
2. To understand interconnections between the causal factors for electric grid collapse in
Venezuela, including:a. The relations between these factors
b. The nature of the relations between these factors
3. To create a conceptual model which documents the causal factors and theirinterrelatedness2

2.

Background - Crisis in Venezuela
Venezuela remains in a multi-year state of crisis on several levels; suffering from lack ofaccess to public services, political fracture, and economic fallout. Although Venezuela boasts
some of the world’s most copious natural resources—including the world’s largest provenpetroleum reserve (NSEnergy Staff, 2020), high freshwater hydrologic resources per capita(WorldBank, n.d), and substantial mining deposits (Rendon, 2020)—it has suffered from total
economic collapse. This collapse is evidenced by several criteria: Venezuela’s extended periodof hyperinflation (Krauze, 2018), the country’s diminished GDP, market contraction across all
major formal industries, and unemployment reaching nearly 50% by 2020 (Biller & Laya, 2019).
Hyperinflation is defined as inflation surpassing 50% per month or 1000% per year (Frankel,
2010). Venezuela has been experiencing higher-than-average inflation since the mid-eighties
and in recent years inflation has spiked. Currently, Venezuela is undergoing one of the longest
episodes of hyperinflation in history, which began in November 2016 and has continued to date;as of May 2021, this hyperinflation has lasted 54 months with no clear decelerating tendencies.
This level of hyperinflation is third only to Greece’s 56-month-long hyperinflation crisis during
WWII and Nicaragua’s 58-month-long hyperinflation crisis during the Nicaraguan revolution(Hanke, 2019). Additionally, the Venezuelan GDP has experienced significant collapse sincereaching a peak in 2013 (Plecher, 2020) as illustrated in Figure 1. Venezuela’s economic
conditions are frequently described as “the worst outside of wartime countries”, or post-war
economies—which illustrates the divergence of Venezuela’s extensive crisis from the usualmodels of collapse revolving around internal armed conflict.

3

Venezuela: Gross domestic product (GDP) in current prices from 1984 to 2019 (inbillion international dollars)

Figure 1 - Venezuela's GDP in current prices from 1984 to 2019 in billion international dollars. From (Plecher, 2020;
Plecher, 2020).

The deepening economic crisis has quickly turned into a humanitarian crisis; with 96% ofVenezuelans living in poverty and 97% of Venezuelans experiencing food insecurity (Kirschner,2020). In addition to the humanitarian and economic crisis, Venezuela is also experiencing
severe political crisis. According to the U.S. State Department’s report on human rights abuses
in Venezuela, the current regime’s poor human rights record since Maduro took office in 2013
has included severe political repression, accounts of torture and inhumane treatment ofprisoners, extrajudicial killings, lack of political liberties and freedoms of expression, andgovernment corruption among other issues (U.S. State Department, 2019). In 2019, the UN
Human Rights Council established an Independent Investigative Fact-Finding Mission in
Venezuela with ongoing investigations which this year reported findings regarding thegovernment’s coordinated, top-down, and systematic human rights violations (United Nations
Human Rights Council, 2019). This report referred to “evidence of unlawful executions, enforced
4

disappearances, arbitrary detentions and torture” which amount to alleged crimes against
humanity occurring in the country since 2014 (UN News, 2020). As this situation unfolds, theFact-Finding Mission will continue to build documentation for an official presentation of evidence
to the Human Rights Council scheduled for 2022 (Valiñas, 2021). In 2017, Venezuela started amulti-year process of political fracture and the establishment of a parallel government, startingwith the legislative branch in 2017 and culminating with the executive in 2019 (Bull & Rosales,2020). This represents an ongoing dispute for power between the previous President of the
National Assembly (Juan Guaido) who claimed interim acting presidency, and Maduro (BBCNews, 2020). As of May 2021, this contention for presidential title continues, with countries
around the world taking distinct stances regarding the identity of the legitimate president.
Because of the ongoing severity of conditions in Venezuela, the situation has quickly escalated
to create one of the world’s worst refugee crises, with 5.4 million Venezuelans (UNHCR, 2020)
or more than 16% of the population (Bahar & Dooley, 2019) having fled the country. This
represents a critical loss in human talent, or brain drain which has further damaged Venezuela’s
capacity to recover from this multi-level crisis (Garcia Zea, 2020). In addition to the loss ofskilled professionals to emigration, Venezuelan government corruption has led to the inefficientuse of remaining human resources. In the early 2000s, Venezuela underwent systematic
nationalization of critical economic sectors, including oil reserves and extraction assets (with theremainder of the petroleum industry already having been nationalized), agriculture, finance,
heavy industry (glass, steel, and cement), gold, telecommunications, power/electricity,transportation and tourism (Reuters Staff, 2012). These nationalizations enable the Venezuelan
government to develop centralized control over critical sectors and consolidate economic
capacity, which in turn enabled those in power to leverage influence and alliance-building
through nepotism (Carroll, 2008) (Frias, 2011), kleptocracy and other forms of corruption(Lansberg-Rodriguez, 2014). This move coincided with the widespread replacement of skilled
professionals in industry with underqualified political loyalists—particularly within Petroleros de5Venezuela, S.A. (PDVSA); the nation’s primary income-generating venture (G., 2012) which isalso institutionally linked to the national electric sector.

2.1

Electric Crisis
Overall, Venezuela has experienced a complicated set of interacting systemic failures;

but one which perhaps has had the cruelest impact on the country’s population has been thelong and slow collapse of the electric system. The electricity crisis in Venezuela was first
officially announced by then-president Chavez in 2010 (El Universal, 2010), when severe El
Nino droughts significantly reduced the nation’s available hydroelectric capacity, the majority ofwhich was served by a handful of hydropower generation facilities situated along a single river.
Venezuela’s fully vertical electric sector which had been newly nationalized and reorganized(Frias, 2007) was presumably unprepared for this crisis, and had been increasingly dependenton hydropower generation facilities. Information about the exact quantities of electricity
generated by hydropower in Venezuela and in particular by the Guri hydropower plant is muddy
and unverifiable. The Guri hydropower facility was once one of the largest in the world, and has
undergone several renovations and additions—with additional hydropower facilities being sited
within the reservoir of the same name (Guri). Sources vary in account, but claim that 60%(Zapata, 2019) or 80% (Smilde, 2019) of the country’s electricity is generated by Guri alone—although this could be in reference to the Guri reservoir which serves three other hydropower
facilities; this is still an astounding metric.
After the announcement of the energy crisis in 2010, attributed by Chavez to droughts
rather than overuse or overreliance on Guri, Chavez announced a rolling blackout program tospan the whole country and urged citizens to reduce usage by 20% to avoid fines. The official
emergency declaration allowed CORPOELEC (the nationalized electric industry) to circumvent
standard public contract award processes for generation stations in an effort to rush additional
capacity installations (El Universal, 2010). In spite of the continuous program of rolling6

blackouts, supposed rushed installation of new capacity, and drastic reduction in economic
activity leading to reduced electric demand, this issue resulting from lack of installed capacity
continued intermittently throughout the following decade.
Venezuela’s electric grid reached its breaking point in Spring 2019, when a blackout
blanketed over all 23 states, lasting as long as a week in some locations (Laya & Rosati, 2019).
Since then, the electric grid has experienced regional failures with intermittent blackout eventsand planned rolling blackouts on a continuously occurring basis (Soto, 2020). This has resulted
in chronic loss of life due to power loss and equipment damage at hospitals, intermittent loss ofaccess to clean drinking water, intermittent loss of access to communication systems, loss of
refrigeration equipment (in a country already ravaged by food shortages and food insecurity), toname a few—occurring on a nationwide scale (Gutierrez & Ramos, 2019).

7

3.

Literature Review
In Venezuela, credible information and data is in many cases unavailable; “many typesof data, from GHG emissions, to number of deaths by suicide, to air quality have been
suppressed by the government since the 2010s, some as early as 2011 (Pierin, 2020).” There isa chronic lack of credible information and data available regarding specific electricity metrics,
and scientific or environmental data in general (Torres, 2019). As I wrote in my August, 2020
paper regarding the existing literature on the Venezuelan electric crisis (Pierin, 2020):“Most reports on the current Venezuelan energy crisis acknowledge simply that rolling
blackouts ‘have become a daily occurrence’ (Laya & Rosati, 2019) or ‘are common’(BBC News, 2019) but fail to acknowledge the timescale of the matter--that rolling
blackouts and energy sector insecurity has been present on a nationwide level for over a
decade. Some reports acknowledge [energy security] issues occurring in 2010 but do
not detail occurrences in the period 2010-2019 (Jones, 2019), and others treat the major
blackouts in 2019 as a singular technical issue (Sequera & Buitrago, 2019), failing to
acknowledge the ongoing and systemic issues altogether.”

There is a significant body of journalistic work that deals with political instability and economiccrisis in Venezuela (Rapier, 2017), (Walsh, 2019), (Speckhard, 2021) in addition to someacademic and professional work regarding societal crisis conditions (Bull & Rosales, 2020)(Briceño-Ruiz, 2019) and anthologies which give detailed accounts across different subjects(Naim et al, 2019), (Lowenthal & Smilde, 2019). The academic study of Venezuela’s energy
sector is limited mostly to analysis of the oil industry (Hassan, 2019) and oil politics (Cederlof &Kingsbury, 2019) (Burges, 2007). A discussion on the nature of knowledge available and a more
specific elaboration of the categories of authors and organizations publishing information
regarding the Venezuelan electric sector is provided in “Appendix 1 – Nature of information.”
Additionally, consulting the “Works Cited” section in this document shows a cross-section ofavailable references on the subject. Together, these demonstrate that a vast majority of
published work on the subject is journalistic or informal, with very little academic work on thesubject of the electric sector or grid collapse in Venezuela.
8There is a major deficiency in the body of academic knowledge on the subject of theelectric sector or electricity crisis with little to no academic work which seeks to uncover andunderstand the mechanisms of grid collapse in Venezuela—this literature review found only one
detailed academic treatment of the electricity crisis (Martin, 2019). Though this work whichappeared in the Spanish Journal of Strategic Studies was peer-reviewed, it is a purely analyticalwork, meaning it doesn’t build theory or employ a method; thus it is a largely self-supporting
work which draws connections with few supportive sources. Understanding underlying
structures which interact to create or dismantle a functioning electric grid, which is a valuable
subject for academic study, would be highly impactful for policy planners. Unfortunately, thisliterature review illuminates a significant lack of work on identifying structures and systems atplay in the functionality of an electric grid or electricity program. Because of the limited nature oftechnical data available, a high-level analysis of the electric grid functionality and collapse
dynamics in Venezuela is needed.
This study synthesizes and organizes information from previous research andjournalistic work in order to develop a framework for understanding the electric grid’s current
state, in addition to the dynamics of overall dysfunction of the electric grid. High quality
analytical work surrounding Venezuela’s electric grid collapse represents a significant
contribution to developing improved understanding of the dynamics of the Venezuelan crisis
overall, which can in turn provide valuable information to policy- and decision-makers. In
particular, an approach to developing a day after scenario for reconstructing the Venezuelan
electric grid must have access to a conceptualization of the dynamics of the Venezuelan electric
grid’s ongoing failure. As such, the Venezuelan electric grid collapse and key contributing
factors may be utilized as a starting point for professionals working in the field of policy planningand international development. Additionally, it is clear that a functioning electric grid is a criticalfactor of production and is singularly important to Venezuela’s long road to recovery.

9

4.

Methods
The primary concern in developing a methodology for this case study is to discover,analyze, and appropriately consider the multiple interacting systems in a way which provides a
sufficiently complete view of the situation. Additionally, the methodology must take into
consideration the nature and quality of information utilized for the development of a conceptualmodel of grid collapse dynamics. With the objective of developing a conceptual model whichcatalogs interacting societal, political, and technological factors contributing to the Venezuelan
electric grid collapse, this research intends to provide some macro-level perspective regarding
specific interacting elements of the electric sector in Venezuela with a focus on the current stateof the electric grid.

4.1

Grid Complexity and Collapse
Although complexity and complex adaptive systems have been studied extensively ininterdisciplinary academic works (Waldrop, 1994), electric sectors are dynamic, interconnected
and complex systems which have received surprisingly spare attention considering their criticalrole in society. Similarly, the complex phenomenon of grid collapse has not received significant
academic study although it has occurred regularly in countries facing extended periods of war or
disorder such as Afghanistan (Gencer, Irving, Meier, Spencer, & Wnuk, 2018), Lebanon(Ghanem, 2018), Yemen (Al-Akwaa, 2019), and others. It is possible to build understanding ofelectric grid collapse by understanding the individual, highly heterogenous elements which
contribute to collapse and the ways in which these elements relate to one another. For thisreason, it is useful to understand how a variety of interconnected factors interacted to create theelectric grid collapse—factors which, if existing independent or exclusive of one another, may
not have necessarily resulted in the current level of crisis. In such an analysis, it is critical toidentify strong interconnections, and amplifying and dampening feedback loops. Since complex
systems are characterized by lack of proven causality, it follows that an event such as grid10

collapse may not be possible to predict; however, an ex-post facto analysis is still useful for
grids which have experienced collapse, since they enable a comprehensive understanding forthe purpose of recovery planning. This research draws conclusions about the dynamics of gridcollapse in Venezuela by developing understanding of the interactions between interconnected
elements of this complex system.

4.2

A Bespoke Framework for Understanding
To meet the research aims articulated earlier I created a bespoke methodology thatcombines energy security constructs with a failure mode and effect analysis (FMEA). Thismethodology brings two key strengths: first, it is appropriate for the subject of study, i.e.,
uncommon grid failure; second, it supports the research in the face of limited access to reliabledata sources relating to the subject of the study. The individual elements of the complex electric
system may be studied and understood through a variety of lenses, but of particular interest is
through energy security constructs as defined by Muckerjee and Sovacool (2011). These
constructs bring clarity to the process of identifying failure modes by providing an intermediarystep between a single observed event or condition such as sabotage or domestic terrorism(failure mode) and a large-scale compound failure (electric grid collapse). This paper reviews
available information sources and from there develops an ex-post-facto FMEA risk-assessment
to identify and analyze key contributing factors to Venezuela’s electric grid collapse. By defining
Muckerjee and Sovacool’s energy security constructs as effects in the FMEA, and utilizing
stated “causes” of the electric grid collapse from existing literature on the subject as failuremodes, the mechanisms of failure operating between failure modes and effects will be
determined. Illustrating the potential mechanisms of failure will implicitly demonstrate thefeasibility of each failure mode and the level to which each failure mode contributed to theelectric grid collapse.

11

4.3

Utility of Muckerjee and Sovacool’s Energy Security Framework
Mukherjee and Sovacool (2011) developed a multi-dimensional framework for analyzing

national-level energy security policy which provides a complete conceptual ideation of themoving parts interacting to create (or destroy) a nation’s energy security. Although energy andelectricity are not interchangeable, their function within, and impacts on, society are very similar;
with a fair amount of overlap between the two. They are both critical factors of production andnecessary precursors to nearly all economic products and services, and have become crucial
aspects of individual daily life. With the increase in electrification and the merging of criticalservices from energy-serviced to electricity-serviced, which is expected to continue to increasein coming years, the concept of electric sector reliability is beginning to approach the complexityof sector-wide energy security. Because of this, frameworks for understanding electric gridreliability must move beyond the physical and techno-focused frameworks and adopt more
complex and comprehensive ideations of electric reliability.
Typically, work regarding grid reliability is centered around resilience to disruptive
events, and focuses on hardening against single high-impact events or regularly occurring lowimpact outages (Panteli, Trakas, Mancarella, & Hatziargyriou, 2017). This paper applies acomprehensive energy security framework to the analysis of grid reliability—which takes into
account factors beyond just the narrow reliability concept focused on technical aspects of thegrid. This enables the consideration of a sector-wide approach, structured by broader societal
trends in economics and politics.
Utilizing the energy security constructs as a starting point for the FMEA risk analysis
provides a complete set of categories which enable the discovery of a sufficient quantity ofcontributing factors to the Venezuelan electric grid collapse. A traditional vulnerability analysis
for power system functionality focuses on vulnerability to external threats or disruptions; thispaper shows how the majority of contributing factors to the electric grid’s collapse in Venezuela
12are structural and internal to the electric sector rather than external disruptive events (such as
weather events, terrorist attacks, etc.).

4.4

The merits of exploratory case study research
Bennett and Elman (2007) state that rigorous case studies focused on process tracingare particularly useful for deviant-case phenomena. Exploratory case study research should
precede more rigid, causality-seeking research—thus this paper develops initial knowledge andattempts to develop a descriptive theory about the grid collapse dynamics in Venezuela. This isa case which deviates significantly from cases with similar cascading failures; which are in mostcases caused by singular catastrophic events (such as storms or cyberattacks) as modeled bymost resilience studies. This also deviates from the next category of cascading failure whichhave received little study—electric grid collapse in war-time countries (as is the case in
Afghanistan and Syria) which experience long declines in grid function, reliability, and stability;
the effects of which can linger for decades (as is the case in Lebanon).
Perhaps surprisingly, grid collapse is not well-defined in the literature. For this study I
employ a working definition, as follows: the locked-in status of failure to provide electric service
as proposed. It is characterized by unexpected or unprovoked failure events, recurring failuresand softening of resilience, cascading failures, chronic load-shedding, and generally poor
service resulting in regular outages to users across a grid. 1

1

A more constructive definition could read as follows: grid collapse is the chronic absence of electricity
security; however, this theoretically oriented wording doesn’t advance this study’s effectiveness orcomprehensiveness. Thus, the operational definition of grid collapse detailed at the start of this paragraph will suffice.
Regardless of which definition of grid collapse is most acceptable, an important threshold to establish for either would
be: to what degree do these conditions have to occur in order to be considered a grid collapse? This question merits
detailed study, but is beyond the scope of this work.

13

4.5

Flexibility, Limitations, Controls
This case study involves the collection of mostly unstructured data of qualitative naturein order to discover the interrelated factors contributing to electric grid collapse in Venezuela. It
is important to maintain a balance between structure and flexibility, which has led to theselection of a relatively low-constraint methodology. The primary underlying structure for thismethodology is the utilization of energy security indices developed by Mukherjee and Sovacool(2011).
The assumptions present in this case study include:•

The Venezuelan electric grid is currently in a state of collapse;•

The Venezuelan electric grid functions like a complex system with many
interdependencies and amplifying/dampening feedback loops;•

The factors which contributed to the current state of collapse are discoverable, but linear
causality is not discoverable;•

There is a limited set of factors which are responsible for the bulk of the contribution to
the grid collapse, and this limited set will sufficiently explain the state of failure;•

Observing macroscopic conditions in the Venezuelan electricity and adjacent industries
will provide useful information for understanding the grid collapse;•

Developing a model which simplifies the complex system for the purpose of analysis will
provide useful results.
The primary product of this paper’s research is to create a conceptual model which

traces and illustrates connections between specific policy actions, societal conditions,
technological factors, and energy security indices with the Venezuelan electric grid collapse.
This can be considered as an initial way to map feedback loops, loose causal structures,interactions with societal conditions and cause-and-effect functions centered around the14

Venezuelan grid collapse. The validity of this conceptual model will be supported by thearguments developed through the FMEA risk-assessment in this case study. This method
provides a framework for accomplishing the key objectives of identifying key causal factors, andunderstanding how they interact and to what degree. Since this method includes mapping both
physical conditions and sociopolitical conditions thought to have contributed to the electric gridcollapse in Venezuela, this conceptual model takes both an ideational view and a material view
on Venezuelan electric grid collapse and its key causal factors. Additionally, this analysis adopts
a contextualized critical approach by studying existing failures in a complex system.

15

5.

Results

5.1

Failure Modes
From an extensive analysis of existing academic literature, grey literature, white papers,

blog posts, government communiques, and official statements on the subject of Venezuela’s
electric grid, a compilation of the most regularly stated reasons for the electric collapse as ofMarch 2019 are detailed in the table below:
Table 1 - Stated Causes of Collapse as Found in Literature (Failure Modes)

Stated Causes of 2019 Failure/Collapse as Found in Literature (Failure Modes)
Failure mode

Exemplary source(s)U.S. government cyber-attack/sabotage(Phillips, 2019), (CORPOELEC, 2019), (VTV, 2020)

Domestic and international terrorism(VTV, 2020) (Ojeda, 2019)

Chronic mismanagement – lack of(Jones, 2019) (Reuters, 2019)

investment and insufficient maintenanceBrain-drain of experts(Dube, 2019) (Martin, 2019)

Government corruption(TalCual, 2020) (Martin, 2019)

Critical damage caused by wildfire(Argus Media, 2019) (Jones, 2019)

These were the most frequently-cited reasons for the 2019 failure event; however, additional
explanations of failure, in the short-term and long-term, include:•

Drought•

Overuse of Guri

Rigorous, albeit superficial journalistic sources typically cite the diverging “explanations” of gridcollapse—the Venezuelan government’s claims of U.S. government sabotage or terrorism,versus a simplified take on ex-CORPOELEC employees’ points of view on the subject: claiming
16

some combination of chronic mismanagement, brain drain of experts, and/or rampant
government corruption as the causes for sector-wide collapse (BBC News, 2019) (Jones, 2019)(Reuters, 2019) (Sequera & Buitrago, 2019).
The primary distinction to draw when understanding the feasibility of the failure modes
contributing to the grid collapse is that there are two fundamental elements of the March 2019
grid event:
1. The disruptive event which initially triggered the cascading failure;
2. The structural condition of the grid which failed to respond resiliently to the disruptive
event, and enabled a grid-wide cascading failure event.
The disruptive event triggering failure in March 2019 could be reasonably explained by one ofthe direct-interference failure modes, which are:•

U.S. government cyber-attack/sabotage•

Domestic and international terrorism•

Critical damage caused by wildfire

It is possible that these events have occurred in Venezuela, as they are not characterized as
being particularly out-of-place. However, experts have analyzed the possibility of a coordinatedinternal sabotage on the central operation of the electric grid or Guri hydropower plant—it has
been stated that this would be highly unlikely without leaving significant evidence, which hasn’t
been presented by any party, including the Venezuelan government (Argus Media, 2019),(Martin, 2019). Further discussion on the feasibility of these direct-interference failure modes
should center around the possibility of these debilitating the grid to the level of total collapse.
The direct-interference failure modes are not feasible pathways for total grid collapse because,
when provided as standalone explanations for failure, they assume proper resilience andreliability measures. In such a situation, it is likely that these disruptions would cause some17

disturbance to service, but the level of collapse of service illustrates severe issues withresilience and reliability, which could not have been caused by any direct-interference events.
The first two failure modes have been presented exclusively by sources with ties to the
Venezuelan government including politicians, leaders of nationalized industry, or governmentcontrolled media (see Table 1 for sources). The third failure mode in this category (criticaldamage caused by wildfire) has been framed as a disruptive event which contributed tocascading failure by taking out lines leading from the single transformer station which serves theentire Guri hydropower complex (serving 60%-80% of the country’s electric demand). In context,
this failure mode was introduced as a trigger which initialized a cascading failure, and thechronically weak condition of the electric grid was also addressed. Thus, this failure mode ismore feasible as a contributing factor to the grid event in March 2019, but when mentioned
alone fails to illustrate the entire story. Outside of the March 2019 failure event, it is necessary
to consider the state of the grid’s reliability or function without any significant disruptive events.
During the period from 2010 to 2019, the grid saw deteriorating service with increasing
incidence of planned load shedding in the form of rolling blackouts. This period also saw a highfrequency of failure events with no clear trigger or disruptive source.
The three failure modes which are not characterized by a disruptive event, but rather an
institutional decay or long-term damaging factor are:•

Chronic mismanagement•

Brain-drain of experts•

Government corruption

None of these failure modes provide a specific mechanism of failure which connects these
conditions to resulting vulnerabilities in the electric grid or structural problems in the electric
sector which led to failure. This illustrates the superficiality of these failure modes when framed
as explanations for Venezuela’s grid collapse. These failure modes demonstrate the18shortcomings of existing literature to fully describe the grid collapse dynamics; by describing
only conditions which have occurred in Venezuela—chronic mismanagement, brain drain, andgovernment corruption—but failing to illustrate how those conditions contributed to grid collapse.
Additionally, brain drain and government corruption are phrases that are well-described on theirown—they have a clear actor and action—but chronic mismanagement, even when qualified
with lack of investment or maintenance fails to provide very much useful information about thesituation other than that it is in consistently poor condition. Chronic mismanagement is a phrase
often used by media to ambiguously describe Venezuela’s persistent failures, with uses
including: “PDVSA’s chronic mismanagement” (Hanke S. H., 2020), “chronic mismanagement of
the economy” (Brodzinksy, 2015), “chronic mismanagement of public utilities” (Zuñiga, 2017),
and an ephemeral “chronic mismanagement” framed as one of “Venezuela’s multiple crises”(Financial Times Editorial Board, 2019). This is not a cohesive failure mode, mechanism offailure, or failure effect, and thus is likely a composite of multiple of these. Overall, the failuremodes as presented in existing literature as explanations for grid collapse are insufficient, as
they do not describe the mechanism of failure or the resulting effects on the electric sector,
representing a significant knowledge gap. This is significant enough that it should not be left up
to the imagination—the mechanisms of failure which connect failure modes to effects must be
discovered in order to properly and fully explain the dynamics of grid collapse in Venezuela.

5.2

Effects
The set of energy security constructs developed in Muckerjee and Sovacool (2011) areorganized under five categories as follows:
Table 2 - Energy security constructs organized under five categories, with each category listed as a column in thetable.

Energy security constructs from Muckerjee and Sovacool
Availability
Affordability
Technology
Sustainability
development

19

Regulation

Security ofsupply andproduction
Dependency
Diversification

Price stability

Innovation andresearch

Land use

Governance

Access andequityDecentralization
Low prices

Safety andreliability
Resilience
Energyefficiency
Investment

Water

Trade

Climate change
Air Pollution

Competition
Knowledge

The electric sector in Venezuela faces challenges in each of these categories; however, not allof these challenges are equally important to the grid collapse. The energy security constructs
which are more directly related to the grid collapse are:•Security of supply and production; dependency; diversification•

Price stability; decentralization; low prices•

Safety and reliability; resilience; energy efficiency; investment•

Governance; trade; competition;

In this modified FMEA risk assessment, these constructs are established as effects, with
failure modes defined above as the stated causes of grid collapse found in literature. In order tounderstand the mechanisms of failure connecting failure modes to effects, the effects are firstrecorded, and inductive reasoning is used to map out the mechanisms of failure until reaching aconclusive initial point or an existing failure mode.

5.3

Conceptual model
The conceptual model of grid failure is recorded in this study as a conceptual model ofgrid function, only to provide consistent positive/negative phrasing between energy security
constructs, and the failure modes originating negative effects on these constructs, eventuallyleading to negative effects on grid function. However, this conceptual model is not intended todemonstrate the entire function of the electric grid, but rather to illustrate the dynamics of gridcollapse/failure in Venezuela.
20

The conceptual model (see Figure 2 below) indicates that the effects as defined by thisFMEA interact significantly with one another, and that some are more closely related to gridcollapse in Venezuela, with others having more distant or less significant impacts. Perhaps thethree most important effects related to grid collapse were found to be security of supply andproduction, which was well-connected with 6 edges (connections to other failure modes andeffects); investment and employment, also with 6 edges; and safety and reliability, with 4 edges
and a direct impact on grid function. With 31 total nodes, this conceptual model discovered
several additional failure modes that were not mentioned in journalistic works, found mostly inindependent blogs and in the standalone academic piece on the subject (Martin, 2019).
References from sources such as Los Sin Luz and Grupo Ricardo Zuolaga (Zuolaga, 2021),
Construyen Pais and Ecopolitica Venezuela (Gonzalez, 2020) by Alejandro Lopez-Gonzalez—
an ex-CORPOELEC employee, a prolific academic writer on the subject of sustainability andauthor of hundreds or thousands of blog posts on the subject of environment, energy andelectricity in Venezuela; and the Jose Aller Blog—dedicated to the Venezuelan electricity crisis,
were the most instrumental in developing the conceptual model. These blogs, when absorbed
from a macro-perspective without focus on anecdotal information, provides critical structural
insight into the organization and overall condition of the electric sector in Venezuela. The
introduction of 11 discovered failure modes (see Figure 2) illustrates the importance ofdeveloping clearly traced failure mechanisms and the utility of this exercise as a means todiscover important information about grid collapse in Venezuela.

21

Figure 2 - Conceptual Model of Grid Function in Venezuela

22

6.

Discussion
This research aims to build knowledge regarding the failure mechanisms and dynamics

of grid collapse in Venezuela. By developing a conceptual model through the bespoke
methodology developed herein, this work has discovered several failure modes and associatedfailure paths contributing to grid collapse. Evidence to support the more significant nodes in the
diagram are collected in the table below, organized by the effect (energy security construct) it
branches from.
Table 3 - Collection of important evidence supporting relationships between nodesCollected results demonstrating relationships between major nodes from conceptual
diagramSecurity and of • Supply: feedstock issues (natural gas, gasoil, and water)
supply and• Water: water supply for any cooling towers for thermal generation is
production
inhibited by electricity crisis—widescale water circulation issues.
Additionally, water supply for hydropower was over-depleted in 20072010 because of overreliance on hydropower, resulting in the energy
emergency declaration of 2010 (El Universal, 2010). Venezuela hascontinued to increase reliance on a dwindling hydroelectric supply(because of over-reliance, installed capacity has experienced increasing
failure and is unable to make necessary repairs).
• Gasoil: gasoil/diesel supply has been limited by several factors—
currently, a national shortage and quota on gas and diesel; Venezuela’s
diminishing petroleum sector activity (drilling and refining)• Natural gas: installed thermoelectric capacity is primarily heavy-duty
generation with dual-fuel capability (methane and diesel), however, these
are run exclusively on diesel because of a lack of investment in natural
gas transportation infrastructure.
• Production: poorly maintained generation facilities fail to guarantee securityof production• Factors driving poor maintenance: corruption, overreliance on oilrevenues – resulting in low allocation, brain drain, concentration of
economic power, centralized decision making, lack of availability oftransportation fuels, parts, tools, and materials (trade, hyperinflation,
political alienation, poor business climate)
Dependency• Cross-sector dependence on revenues: Subsidized electricity rate (poor cost
recovery through electric services) requires CORPOELEC (sector-wide,vertical government-owned electric company) to pull revenues from PDVSA
97% of the governmental revenue was from oil exports• Oil price crash of the early 2000s -> 2010s devastated government
revenue• Reduction in economic activity from other exports• Dependence on Guri hydropower plant located in the Caroni river23•Over-dependence on a single hydropower plant makes the electric
system highly vulnerable—this is a structural flaw in the electric gridplanning• Since nationalization of PDVSA in the 1970s, through the energy crisis of
the 2010s, the Venezuelan government’s revenue strategy of maximizing
oil exports dictated decisions about maximizing hydropower within theenergy mix in order to export as much oil as possible rather than utilizing
a portion for the domestic energy sector.
• Dependence on “transmission highway” leading out of Guri
• Mirrors and enhances the vulnerability of relying on a single facility forsuch a high proportion of the nation’s energy.
• Just a few facilities on the Bajo Caroni River (including Guri and thedysfunctional Tocoma) serve the majority of the country with a single
transmission highway.
• Dependence on diesel-fueled generators for deployable capacity—thesetypes of generators are best utilized as back-up capacity and improper
utilization for the generators causes increased failure rates, which in turnleads to reduced deployable capacity utilized and increasing utilization ofhydropower capacity
Diversification• Lack of diversification in energy mix• Within hydropower capacity, all are located on the Lower Caroni river• Within thermoelectric capacity, majority utilize diesel oil (lack of diversificationof deployable generation feedstock)
Price stability• Hyperinflation has a negative effect on price stability of goods and services
needed for the proper maintenance of a stable and reliable electric grid.
Decentralization • After the implementation of the electric sector nationalization, the regional
electric utilities were centralized to form a single electric corporation, called
CORPOELEC. This centralized decision-making and planning, resulting in
reduced energy security.
Low prices• Inefficiently low prices in the electric retail industry, which also has very low
collection rates, resulted in the requirement for PDVSA, which is part ownerof CORPOELEC, to serve as the primary financier for CORPOELEC.
Individual projects were also funded through joint-venture projects withforeign governments, which meant that the projects weren’t subject to public
procurement requirements.
EnergyInefficiencies related to the use of gasoil in dual-fuel generators cause theefficiency
generators to perform more poorly and increase the incidence of failure of thesefacilities, leading to the high proportion of inoperable thermal generating capacity(Lopez-Gonzalez, Domenech, & Ferrer-Marti, 2018)
Climate change Climate change may exacerbate the issues related to hydropower generation by
reducing or causing unexpected changes in water supply in the River Caroni,
which is the primary river at which hydropower generation facilities in Venezuela
are sited.
Governance• Corruption and poor governance over the electric sector are two heavily
interacting factors; the poor governance facilitates corruption, and continued
corruption allows poor governance regimes to continue.
• Lack of transparency in contracts, operation, planning, facilitated by public
contracts rule (Frias, 2007), which excludes any projects which form parts ofinternational agreements from being required to follow public procurement
rules. Many of the large energy projects--some of which were never24

TradeCompetition
Knowledge

completed, such as Tocoma, which is well-discussed by (Siverio, 2019),(Transparencia Venezuela, 2017), mentioned by (Martin, 2019), andannounced officially by the government by (CORPOELEC, 2013)—fell under
this regulatory loop-hole. An example includes the 2010 memoranda signed
between Lula and Chavez, declaring “cooperation in energy projects” thus
allowing future joint-venture energy projects to fall under procurement
loopholes—one such project is the Tocoma hydroelectric plant, which was
proposed to solve the lack of capacity causing electricity shortages. This
project was carried out from 2004-present in conjunction with Odebrecht,
with $9B spent to date, and the project is stalled at 95% completion becauseof lack of payment to one of the partnering firms (Transparencia Venezuela,
2017).
Political isolation and lack of functioning capacity has resulted in constricted
electric trade with neighbors—this is also exacerbated by the reduced petroleum
production—previously the lifeblood of Venezuela, utilized to maintain politicalallyships, to drive trade and investment, fuel social spending, and supplement
the nearly non-existent domestic tax revenue.
Nationalized and verticalized electric industry monopolized the electric sector
resulting in reduced competition.
Lack of data reporting makes oversight nearly impossible.

The discovery of additional failure modes and mechanisms of failure illustrate adevelopment of knowledge previously unknown within the academic context. This information
has been extracted from many informal and independent sources which together, provide aclear picture from which the structural deficiencies and vulnerabilities of the Venezuelan electric
sector was inferable. These structural conditions, vulnerabilities and deficiencies have beentranslated into failure modes, mechanisms of failure, and effects, and have been illustrated in
the conceptual diagram. Additionally, amplifying factors or interrelationships between nodes
have been note in the following section.

6.1

Amplifying or dampening factors
Almost every construct is affected by Venezuela’s failure to properly operate its

petroleum sector, failing to bring in revenue to the government. As previously noted,
Venezuela’s government revenue is dominated (97%) by petroleum exports and there are
currently no rigs drilling in Venezuela. The petroleum sector is geographically concentrated in25the Maracaibo Lake region of the state of Zulia—which incidentally has been the hardest hit by
the electric sector collapse. Thus, there is significant feedback between failure of the petroleum
sector and failure of the electric sector. Additionally, these failures tend to lock-in negative
effects on security of supply and production, creating a toxic amplifying feedback loop where
grid failure and oil sector failure not only amplify one another, but further amplify grid failure
through insecurity of feedstock supplies and irregular production.
This analysis revealed a dangerous dynamic between the over-utilization of hydropower
capacity and the over-utilization of dual-fuel generators with diesel as deployable generation. It
appears that the over-utilization of hydropower capacity began in the early 2000s—by 2007, theincrease in electricity usage nationwide had increased by nearly 50% over the previous decade(enerdata.net, n.d.). It appears as though installed capacity increased, though functioning
capacity remained stagnant and even decreased due to improper usage (e.g., over-use, lack offuel switching) and poor maintenance. Because of this, after 2010, demand was increasingly
met by the Guri power plant, leading to increased turbine failures within the Guri complex. This,in turn, required the deployment of diesel generation capacity, which is not being utilized as
designs require. There is an amplifying loop between over-exertion of Guri power plant andover-exertion and increasing failure of existing deployable thermal generation capacity.
The insecurity of supply and production of electricity in Venezuela is influenced byseveral factors and is characteristically locked-in because of the long period required for repairof existing capacity, or installation of new capacity, which historically has been impeded bycorruption. In this sense, corruption is locking-in the lack of security of supply and production.
Additionally, the lack of resilience of the electric grid has locked-in the grid collapse condition
because a grid in crisis must focus the majority of its resources on recovering critically damaged
or offline assets and cannot easily improve its functioning resilience or insecurity of supply; ittakes a greater amount of effort, resources, and energy to recover from disruptions because
26they may lead to additional failures. It also takes a much greater amount of effort to break out of
this locked-in condition.

27

7.

Conclusions
The proposed failure modes found during literature review constitute feasible

occurrences; but the majority of them seem to be simple phrasings meant to illustrate a limited
failure or to conceal the structural and broad nature of failure across the electric sector.
Because the Venezuelan electric sector behaves as a complex system, it is difficult to show thatany of the failure modes or effects were necessary conditions for Venezuelan electric gridcollapse. However, this conceptual model has indicated that this collapse illustrates a multimodal failure mostly characterized by inefficient structural operation of the sector, including poor
capacity and reserve planning/execution, poor resource allocation, multi-level corruption, andeven broader issues such as economic mismanagement of federal revenues and irresponsible
project financing structures. These facilitated the weakening and eventual collapse of theelectric sector. It is evident that the scale of impact that the disruptive events of early 2019 hadon the electric sector is a great cause for concern, as they were much broader in impact thenthey would have been in a resilient and reliable grid. An electric grid which cannot recover fromexternal sabotage, or from an uncontrolled wildfire, is critically unstable and lies on the brink ofcollapse from one end or another.
This degraded reliability and resilience has functionally locked-in the condition ofcollapse into a feedback loop, which involves continued corruption, lack of investment, and brain
drain, in addition to the existing structural inefficiencies of the electric sector, which continue toworsen because of amplifying feedback loops between overutilization of hydropower and overexertion of existing facilities. These interact with the current state of collapse by augmenting one
another and reducing the possibility of either one coming to an end without a significant
overhaul—which is beyond the capacity of the current sector, related institutions, and even thegovernment as the overarching decision-making agent.

28

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Appendix 1 – Nature of information
A notable aspect of the ongoing electricity crisis in Venezuela has been the lack ofaccess to transparent information regarding causes of the major 2019 blackout; with opposing
sides providing drastically different explanations regarding what occurred (Jones, 2019).
However, regardless of the trigger of the March 2019 blackout, it is clear that an electric gridwithout the necessary qualities to recover from a disruptive event—or an electric sector which
hinges on the proper function of a single power facility, transmission line, energy source, etc.,
has structural reliability issues which must be addressed.
There is consensus about information in Venezuela being highly polarized andpoliticized, and this is evidenced by the wide variation in information being presented. Below is asummary of the types of informational sources available and the conditions
Why is it so difficult to find information regarding the current state of Venezuela?
•

Structural conditions such as government ownership of media resources•

Continuous economic collapse is a major distraction and in some ways a deterrent fromseeking, demanding, reporting, etc.

•

Political repression of dissent (information about collapse can be interpreted as dissent),
as is evidenced by recent seizure of El Nacional (Reuters Americas, 2021)•

Highly polarized political climate and politicization of issues of collapse•

Lack of government reporting of information•

Lack of collection of relevant electric data•

Lack of general transparency in the electric sector

What are the primary modes of dissemination of information regarding Venezuela’s gridcollapse?
•
35

International media•

Via Foreign correspondents•

El Nacional•

El Universal•

The Guardian (typically a first-to-post source on Venezuelan issues within Western
media)••

Venezuelan state-owned media
•

VTV

•

TeleSUR

Non-affiliated Individual reporting or research••Groups formed to disseminate specific information••

Relevant information comes from expat former employees via blogs and twitter feeds

Los sin Luz – group Ricardo zuolaga

Opposition politicians•

Official investigation by National Assembly Committee before parallelization oflegislature•

Other Existing groups who have touched upon these issues•

Think tanks•

Other NGOs•

Opposition-biased expat media•

Venezuelan official government statements•

Generally highly limited to Twitter, many government websites are not functional, not
up-to-date, or simply don’t report relevant or properly contextualized information

36