Venezuela's power crisis threatens economic recovery despite vast energy potential

Maria hoped that on her birthday, the only candle she would need was the one on top of her cake. But on May 5th, when I called to wish her well, the lights were out in her Maracaibo home—the second-largest city in Venezuela, on the country's western coast. She had reasoned that surely they wouldn't cut power two days in a row, especially after weeks of blackouts every other day. She was wrong. The electricity stayed off from 8 p.m. until midnight. When it came time to sing the long, traditional Venezuelan birthday song, her family sang in darkness, saved only by the candles Maria had learned to keep on hand and the battery-powered lamps she'd bought years ago to cope with the suffocating heat of a city where temperatures average around 30 degrees Celsius.

Maria's experience is not unique to Maracaibo. A 2025 survey by the Catholic University Andrés Bello in Caracas found that nine out of every ten Venezuelan households reported regular electricity interruptions. Four out of ten said the cuts happen daily and stretch for hours. The crisis is not new—the government began rationing electricity in 2009 under Hugo Chávez, and declared an official "electrical emergency" in 2010 that was supposed to enable necessary investment in the sector. More than fifteen years have passed. The blackouts have only worsened. In the first three months of 2026 alone, there were thirty-six protests across Venezuela over power failures, with twenty-four occurring in March, according to the Venezuelan Observatory of Social Conflicts.

The government of interim president Delcy Rodríguez blames the crisis on rising temperatures and increased economic activity. The energy minister, Rolando Alcalá, explained in early May that as Venezuelans earn more income, they buy more appliances, driving up demand. He cited a peak demand of 15,579 megawatts, attributing the rise to reactivation of commercial and industrial sectors. But Miguel Lara, an engineer who spent three decades coordinating Venezuela's electrical system operations until 2004, points out that this represents only a 5 percent increase from 2025's demand of roughly 14,724 megawatts. If such a modest rise in demand is causing blackouts lasting up to eight hours daily in some cities, how can Venezuela achieve the economic and oil recovery promised by Rodríguez and U.S. President Donald Trump?

The answer lies in a fundamental mismatch between theoretical capacity and actual capability. Venezuela theoretically has the ability to generate about 36,000 megawatts of electricity. In reality, only 13,000 to 13,500 megawatts are available. The country's renewable sources—primarily hydroelectric dams—can generate around 17,000 megawatts, but the transmission system can only handle a maximum of 10,000 megawatts. The remaining 3,000 megawatts come from thermal power plants operating at roughly 13 percent of their capacity. The system, Lara says bluntly, has reached its limit. It cannot absorb any new demand, neither in power generation nor in transmission capacity. "The electrical system is in a critical phase and perhaps is already continuously deficient," he told me. "It has arrived at its limit. It cannot support the incorporation of any new need for supply."

This constraint threatens not just daily life but Venezuela's entire economic strategy. The country holds the world's largest known oil reserves, yet oil production depends entirely on electricity. Susana Brugada, Chevron's corporate affairs manager in Venezuela, explained that the company's oil fields are directly connected to the national grid. When the power fails, wells shut down instantly. "Each power outage can knock out 40 wells in the blink of an eye," she said, "and when the light returns, those 40 wells don't automatically come back online." Most of Venezuela's crude oil from the Orinoco Petroleum Belt relies on the national electrical network. Without reliable power, the ambitious plans to increase oil production—including Trump's proposed $100 billion investment—are impossible. "Without electricity, there is no way to make the drills function, and they are the fundamental pieces to begin production," Lara explained. "For refineries and all processes, from exploration to commercialization, moving pipelines and driving everything forward, you need motors."

The human and economic toll is mounting. In Valencia, the country's third-largest city, blackouts stretch five to eight hours daily. Ernesto Abbass Sosa, president of Valencia's Chamber of Commerce, described the situation as a challenge facing every business owner. Shops and service establishments must still pay rent, taxes, utilities, and salaries even when they cannot operate. The physical and mental exhaustion of the population, he noted, undermines productivity and social cohesion. Many businesses now post updates on social media about whether power is available and have extended operating hours to compensate for lost time. Some have begun acquiring generators and solar panels, but these are expensive stopgaps, not solutions.

The scale of recovery needed is staggering. Lara calculates that restoring a reliable electrical system capable of supporting 15 percent annual demand growth and 10 percent annual GDP growth would require approximately $45 billion and six years of sustained investment, professional management, and structured planning. The first two to three years might stabilize the system and recover some of the existing but non-operational capacity already installed. Yet even this assumes political will and competent execution—neither guaranteed. Lara notes that the deterioration was not inevitable. The entire electrical system built in Venezuela during the second half of the twentieth century cost about $48.25 billion. The Chávez government invested $117.04 billion between 1999 and 2025. Yet eighty percent of current supply still comes from infrastructure built before Chávez took power. The money was squandered on unsuitable projects: power plants purchased from Cuba that never functioned, equipment installed in locations without fuel, and the Tocoma hydroelectric facility, which consumed $9 billion—three times more than an identical project elsewhere—and remains non-operational sixteen years after its planned completion date.

Meanwhile, the prospect of millions of Venezuelans returning from abroad—eight million have emigrated—would only deepen the crisis. "The country does not have electricity for all the people who live here now," Brugada said. "Imagine if half of those who left came back. That is four million people, equivalent to the population of Caracas. There is no way to supply more people with electricity." For now, Maria will continue to rely on her battery-powered lamps and ventilators. Her next birthday will likely be celebrated the same way—in darkness, waiting for a system that has no clear path to recovery.