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Electrical sustainability in Venezuela from the perspective of the new sector law

Climate change is one of the most important issues of our time due to the effects it has on multiple physical-natural variables such as extreme temperatures and atmospheric events, trophic chains and oceanic productivity, the availability of fresh water, among others, with the corresponding risks on infrastructure, food safety and people’s health.

The results of the Conference of the Parties (COP) No. 21, known as the Paris Agreement in 2015[1], and of COP 24 in Katowice at the end of 2018, confirm that one of the most important issues for countries signatories is short-term decision-making regarding mitigation and adaptation actions for the impacts associated with an accelerated change towards a hotter and drier climate globally. The mitigation actions, which consist of the reduction of carbon dioxide emissions associated with the burning of fossil fuel, should be directed at the economic sectors that contribute the most to these emissions, such as the production of electricity and that contribute 25% of global greenhouse gas emissions[2].

This decrease in the consumption of fossil fuels represents one of the most important driving factors for the energy transition, which Sánchez[3] defines as: “… the radical transformation of the current global energy supply and demand scheme, in which renewable energy sources and increased energy efficiency significantly displace fossil fuels from the market.” Basically, it is moving from power generation by burning fossil fuels (diesel, gasoline, natural gas) to a low carbon scheme by implementing renewable energy to meet the energy demand of the population, and promote their socioeconomic development.

Considering the above, the National Assembly of Venezuela approved in its first discussion the Organic Law Project of the Electricity Sector (LOSE) [4] in October 2016, as a reform to the Organic Law of the Electricity System and Service of 2011 [5] , with the intention of promoting a free market in the electricity sector and as a strategy for free competition, production and commercialization of electricity, thus guaranteeing the provision of a service of technical, reliable quality and at the lowest possible cost, with the mechanisms to allow the access to this service to the entire population, including low-income sectors.

For its part, in Latin America, a significant growth of solar energy as a source of renewable energy has been observed in recent years, with important changes in regulations to encourage its use[6]. Colombia is the country with the highest growth trend in the region and eighth in the world, in terms of renewable energy. In 2014, the Congress of the Republic of Colombia approved Law 1715 of 2014, “By means of which the integration of non-conventional renewable energies into the National Energy System is regulated” , which establishes the framework regulations for the promotion and development of Non-Conventional Sources of Renewable Energy in Colombia [7] .

In this essay, a comparative analysis of the Venezuelan LOSE and the Colombian Law 1715 is presented, from the point of view of its bioethical content and its consequences for sustainable development in both countries.

The new LOSE and electrical sustainability in Venezuela

A novel aspect of this legal instrument related to electrical sustainability in Venezuela is that the term sustainable development is declared as part of the purpose of the law established in its Article 1: “…establish the provisions that ensure all users of electrical service a provision of both technical and commercial quality, reliable and at the lowest possible cost; that they create the mechanisms to allow access to this service to the low-income population; and that allow the sustainable development of the national electrical system, to satisfy the electricity requirements of the country.” .

Considering the fundamental principles of bioethics applicable to the nature of this Bill, in this first article the principle of Justice is directly evidenced, in the sense that an assurance of quality and reliability is being declared to all users ( equity in the service), also considering the low-income sectors (equality and inclusion). This principle is also reflected in Article 4, which indicates that the authorities must carry out “…the actions and coordination necessary to grant the subsidies that may apply, aimed at enabling access to electrical service by the low-income population…” and“…grant direct subsidies to supplement the income of that population or to favor the development of specific economic sectors.”

Likewise, it is known that sustainable development encompasses at least three well-defined dimensions: ecological (environmental), economic and social. In this Bill, this concept is mentioned in the following articles:

“Article 5. The users of the electrical service and the Public Powers of the State will ensure that all electrical service activities are carried out under principles of quality, reliability, efficiency, transparency, equity, solidarity, non-discrimination, citizen participation, environmental sustainability, and economic and financial viability. (…)

9. The principle of environmental sustainability requires that the planning, execution and development of electrical service activities be carried out avoiding irreparable damage to the environment and making rational and efficient use of resources, in order to preserve them as much as possible for the future generations.”

“Article 12. The State will ensure the autonomy of the functions of policy, regulation, supervision and provision of electricity services, and will implement the necessary mechanisms to achieve it administratively and financially, without prejudice to the necessary coordination between the bodies in charge of each one. of these functions, in order to universalize a quality, reliable, safe and sustainable electrical service.”

“Article 14. The short and long-term planning of the expansion of the National Electric System will be carried out in such a way that the projects that are foreseen are economically and technically viable and environmentally sustainable; that the demand be satisfied under principles of economic efficiency (…) and that the plans to cover the national and regional electricity demand can be adapted to the changing needs that emanate from the economic, financial, technical and environmental conditions of the country.”

Article 5 more explicitly establishes the environmental sustainability of electricity service activities. This can be directly associated with environmental protection and minimization of impacts, which is related to the principles of Precaution and Responsibility, in that compliance with the applicable guidelines and regulations is expected to prevent environmental deterioration and achieve a compatible balance. with life on the planet. Again, in said article and in Article 12, the principle of Justice is explicitly evidenced by proposing “…equity, solidarity, non-discrimination, citizen participation…” and the universalization of the service.

In Article 14, reference is made to environmental and economic sustainability (eco-efficiency) in the planning of the service, proposing to act in such a way that the satisfaction of the electricity demand contemplates the opening to different forms of primary energy production (renewable energies as possible sources) to be considered in the Electricity Service Development Plan (Art.18). Likewise, it is proposed that this demand be satisfied under the foundations of economic efficiency, adaptable to the needs of society as the nucleus of the country’s development. In a way, this makes a reference to the principle of Autonomy applied in this case to society as a whole, by proposing that service coverage plans adapt to the freedom of citizens to decide what those needs would be.

The principle of Autonomy can also be associated with what is established in Article 43, in that electric power generation activities are open to the free participation of multiple actors, such as natural or legal persons who can decide to carry out projects of self-generation or cogeneration to satisfy their energy requirements, subject to the regulations and norms dictated by the Law.

Law 1715 in Colombia

For its part, Colombia has made regulatory advances in relation to clean energy since the 1990s [8]. Even since 2010, goals have been established in relation to the progressive incorporation of non-conventional energy sources as part of its energy matrix for 2015 and 2020.

Law 1715 of 2014, prior to the Venezuelan LOSE Project, aims to “…promote the development and use of non-conventional sources of energy, mainly those of a renewable nature, in the national energy system, through their integration into the market electricity, its participation in non-interconnected areas and in other energy uses as a necessary means for sustainable economic development, the reduction of greenhouse gas emissions and the security of energy supply.”(Art.1). Similar to the Venezuelan LOSE, sustainable development is explicitly declared in its environmental and economic dimensions in multiple articles, making direct reference in this case to the principles of Precaution and Responsibility, already described in the analysis of the Venezuelan regulations.

Likewise, although it does not explicitly mention low-income or less favored sectors, it refers to the principle of Justice with the inclusion of non-interconnected areas (municipalities, towns and villages not connected to the National Interconnected System) for their economic development.

In its Article 2, in contrast to the LOSE that mentions ” different forms of primary energy production” , the development of non-conventional sources of renewable energy (wind, solar, micro hydroelectric, geothermal, tidal) is explicitly declared as of social interest and national convenience (which gives it an organic character), and in its Article 4 it defines self-generation as the activity carried out by natural or legal persons mainly to meet their own needs (principle of Autonomy), and even allows the sale of surpluses in the terms determined by the Law.

Law 1715 does not expressly contemplate the granting of subsidies as in the LOSE, but rather incentives. In Article 9, literal b, an incentive scheme is proposed for non-interconnected areas to migrate from fossil fuel to renewable energies, and through Article 10 the Fund for Non-Conventional Energies and Efficient Energy Management is created to finance programs and efficient energy management, alluding again to the principles of Justice and Precaution.

What are the commonalities?

Although the words “ethics” or “bioethics” do not appear expressly in the text of these regulations, the allusion to the principles of Justice, Precaution, Responsibility and Autonomy is very similar between both laws in multiple articles related to equity, equality and inclusion in the scope of the service; minimization of impacts associated with the generation of electricity; economic and environmental balance; and the freedom to decide how to satisfy the electricity demand to achieve social and economic development.

Additionally, the fact that there is a legal framework that ensures the satisfaction of the energy demand for socioeconomic development, would be promoting the well-being and quality of life of people, individually and collectively (society), so the ultimate goal of these laws would also be in correspondence with the bioethical principles of Beneficence and Non-Maleficence.

Consequences for the Sustainable Development of the Region

Just as it has been determined that one of the climate change mitigation actions is the reduction of CO2 emissions from the burning of fossil fuel for energy generation through the implementation of energy efficiency strategies and the incorporation of clean energy into the matrix. of generation, there are very strong interests or barriers to the energy transition, such as: fuel and electricity subsidies, lack of legal framework, technical standards, training and research programs, lack of political will, among others[3].

Consequently, the existence of regulations that guarantee the quality, reliability and profitability of energy generation, hand in hand with an intelligent investment of oil income, that promote the use of renewable energies and energy efficiency, and that allow growth development and integration of less favored sectors of the population, would have very positive consequences in that it would greatly direct the development of the country towards environmental and socioeconomic sustainability, that is, to improve the quality of life in balance with the carrying capacity of the planet.

In conclusion, the Venezuelan LOSE Project of 2016 took as a reference several aspects of the Colombian Law 1715 of 2014, which is evidenced in the definition of the object of both laws, and the issues of openness to renewable energies, free participation of actors, definition of institutions and roles, adapted to the reality of each country. It is relevant to mention that although Venezuela was the first country to have a Ministry of the Environment and with a development of very high-level regulations until the 1990s, in the last decade Colombia has made much more significant progress in terms of sustainability, so much so that its national environmental authority was renamed the “Ministry of the Environment and Sustainable Development” .

In this sense, the economic model implemented in Colombia for the provision of public electricity service consists of a free competition market for generation and commercialization activities. The scheme proposed by the LOSE in Venezuela contemplates a similar model; the generation and commercialization activities of regulated free competition, and the transmission and distribution activities regulated by means of a new institutional framework with separation of roles between the different actors.

Undoubtedly, the satisfaction of electrical energy requirements is directly related to the quality of life and well-being of people and society. It was evidenced that the bioethical principles of Beneficence, Non-Maleficence, Justice, Precaution, Responsibility and Autonomy are perfectly applicable and necessary in the reform of the regulatory framework for the provision of electrical service, and specifically in the legal instruments that regulate and guarantee a supply sustainable electricity supply, within the framework of an inevitable global energy transition.

Bibliographic references

[1]. United Nations (2016). Report of the Conference of the Parties on its twenty-first session, held in Paris from November 30 to December 13, 2015. FCCC/CP/2015/10/Add.1

[2]. IPCC (2014). Climate change 2014: Synthesis report. Contribution of Working Groups I, II and III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change [Core Writing Team, RK Pachauri and LA Meyer (eds.)]. Geneva, Switzerland: IPCC.

[3]. Sanchez, JC (2016). The Energy Transition and its incidence in Venezuela. Friedrich Ebert Stiftung Foundation (FES). Venezuela.

[4] . National Assembly (2016). Organic Law of the Electricity Sector. Approved in first discussion on October 19, 2016.

[5] . National Assembly (2011). Law of Rational and Efficient Use of Energy. Official Gazette No. 39,823 of the Bolivarian Republic of Venezuela.

[6]. Moreno Leon, J. (2019). Renewable energy. In: Renewable Energies and Environmental Protection Forum. Metropolitan University, July 2019

[7] . Colombian Congress (2014). Law 1715 By means of which the integration of non-conventional renewable energies into the National Energy System is regulated. Published in the Official Gazette 49150 of May 13, 2014.

[8]. Torres, F. (2016). Analysis of the regulatory framework of the Colombian electricity sector, impacts on the electricity regulation of Law 1715 of 2014 (master’s thesis). National University of Colombia, Bogota, Colombia.

About the Author:

José Solano is a Chemical Engineer graduated from the Simón Bolívar University, Caracas – Venezuela, PhD student in Sustainable Development from that same university. He is manager of Environmental Engineering and member of the VEPICA Center of Excellence.

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