Electricity in Venezuela: what GE Vernova's gigawatt costs and what it burns

One thousand megawatts in twenty-four months. That is the figure the U.S. embassy attached on September 4 to the agreement between GE Vernova, PDVSA and Corpoelec, and it is the same one the June 15 memorandum already carried. Three calculations say what it means: it costs some $1.1 billion, it requires between 123 and 181 million cubic feet of gas a day, and twenty-four months does not fit the efficient technology.

1. What it costs

The assumptions table of the U.S. energy agency's annual outlook sets construction cost per kilowatt installed. A single-shaft combined cycle comes in at $1,086 per kilowatt; multi-shaft, at $1,032; an industrial-frame combustion turbine, at $1,158. A gigawatt, then, runs between $1.03 and $1.16 billion.

That is the U.S. reference price, excluding construction interest and regional multipliers. For Venezuela it is the floor, not the ceiling: equipment arrives imported, civil works start from deteriorated installations, and insuring a project under a licensing regime does not cost what it costs in Texas. The figure gives the order of magnitude, and the order of magnitude is a billion dollars per gigawatt.

2. What the deadline selects

The same table carries a column rarely quoted: construction time. A combined cycle takes three years. A combustion turbine, two. The stated commitment is twenty-four months, so the technology that fits the deadline is not the efficient one.

The difference is paid in fuel. The combined cycle's heat rate is 6,226 British thermal units per kilowatt-hour; the industrial-frame combustion turbine's, 9,142. Forty-seven percent more gas per kilowatt-hour, across the equipment's entire service life, in exchange for twelve months of calendar.

3. What has to be burned

A gigawatt running continuously consumes between 123 and 181 million cubic feet of gas a day, depending on technology. Neither party has published that figure, and the gas it requires is not free.

On May 23 the deputy gas minister set out the domestic market split: of more than 1,800 million cubic feet a day, the power system receives 711, oil and refining 622, households 145 and industry 131. The new gigawatt alone would require between 17% and 25% more gas than the country's entire power system receives today.

Set against the state company's plan, the arithmetic tightens. The stated target is to raise gas output 11%, to 1,954 million cubic feet a day: an increase of 154 million. The gigawatt takes between 80% and 118% of that increase. If the new generation is delivered and the gas plan holds, what is left for the rest of the economy is whatever survives that subtraction.

4. What it adds to the barrel

Producing crude consumes electricity from the same grid. The coefficient published by energy analyst Nelson Hernández puts Venezuelan upstream intensity between 40 and 45 kilowatt-hours per barrel, and his measured case confirms it: the rise from 823,000 to 988,000 barrels a day in the first quarter required some 300 megawatts. Hence the conversion rule: every 100,000 new barrels a day require some 183 continuous megawatts.

Multiplied by the unit cost, the generation needed for those 100,000 barrels runs about $200 million. Divided by the barrels: some $1,987 per barrel a day of capacity, and $2,119 if the plant is simple cycle. Chevron's program, divided by its own target, yielded $22,000 per barrel a day. Electricity adds around 9%.

5. What each target requires

On the same conversion rule, the production targets stated in the past thirty days translate into megawatts and gas:

The row that matters is the third. The U.S. estimate for 2027 requires on the order of a thousand megawatts: precisely the package committed for 2028. And none of those megawatts would be covering the shortfall that already exists, which sector calculations put at some 3,800 megawatts between real supply and demand.

6. Who puts up the money

The U.S. sanctions office's answer on the license authorizing supply to the sector is explicit on two points. First: what it authorizes is provision "from the United States or by a U.S. person". Second: any payment to the Government of Venezuela or PDVSA other than local taxes, permits or fees must be deposited into January's decree fund, in U.S. Treasury accounts, whose disbursement the State Department determines.

Applied here, the circuit closes in one direction: the crude is sold, payment enters a Treasury account, the State Department authorizes the spending, and the equipment that spending buys is supplied from the United States. GE Vernova is a U.S. company listed in New York. No piece of that chain is irregular: all of it is written in public licenses. What changes with the whole chain in view is the nature of the announcement: a thousand megawatts is not a donation, it is a purchase Venezuela pays for with its crude and a third party authorizes.

The three observables

First: whether GE Vernova records the Venezuelan agreement in its own newsroom or in a filing to investors. Its newsroom, checked on September 7, carries releases from those days on a wind farm in Scotland and a nuclear program in Sweden, and none on Venezuela; its chief executive presents to investors on September 16. Second: which technology gets installed, because 58 million cubic feet of gas a day hang on that. Third: whether a megawatt figure appears with an identified plant and an in-service date, rather than an aggregate total at twenty-four months that has already gone three without moving.