Cuba’s Power Crisis Drives Home Need to Accelerate Energy Transition

A worker walks through the facilities of the Carlos Manuel de Céspedes thermoelectric plant in the central province of Cienfuegos. Most of Cuba's thermoelectric plants, almost all of which were built with technology from the now defunct Soviet Union and Eastern European socialist bloc, have a lifespan of 30 to 35 years, and it would take 40 to 80 million dollars to repair and upgrade each one, according to industry executives. CREDIT: Jorge Luis Baños/IPS

A worker walks through the facilities of the Carlos Manuel de Céspedes thermoelectric plant in the central province of Cienfuegos. Most of Cuba’s thermoelectric plants, almost all of which were built with technology from the now defunct Soviet Union and Eastern European socialist bloc, have a lifespan of 30 to 35 years, and it would take 40 to 80 million dollars to repair and upgrade each one, according to industry executives. CREDIT: Jorge Luis Baños/IPS

By Luis Brizuela
HAVANA, Oct 14 2021 – With aging infrastructure and problems with fuel supplies, Cuba is facing a crisis in its electric power generation system, which could accelerate plans to increase the share of renewable sources in the energy mix.

In recent weeks, blackouts have been widespread in the 15 provinces of this Caribbean island nation.

Breakdowns in several of the eight thermoelectric plants and delayed maintenance in 18 of its 20 generating blocks are the cause of the generation deficits, according to the authorities.

In addition, there are malfunctions in the distribution systems – lines, substations, transformers – due to the lack of spare parts.

Cuba produces half of the fuel burned in several of its thermoelectric plants, but a significant portion depends on imports.

Under bilateral agreements, Cuba should receive some 53,000 barrels per day of oil and derivatives from Venezuela. But the collapse of that South American country under the weight of its lingering crisis means that shipments are irregular, according to media reports, although the local government does not provide precise figures.”The operating reserves in the power system are low and at times have been below what is required to meet consumer energy demand, which means the power supply is necessarily and inevitably affected.” — Liván Arronte

There is also a reported decrease in the volumes of natural gas associated with oil, used in facilities on the northwest coast, a deficit that can only be overcome by means of new oil wells, according to industry executives.

“The operating reserves in the power system are low and at times have been below what is required to meet consumer energy demand, which means the power supply is necessarily and inevitably affected,” Minister of Energy and Mines Liván Arronte said on television on Sept. 14.

For Cuban families, the current crisis is reminiscent of the prolonged power outages of the early 1990s, when after the collapse of the then Soviet Union, the island lost its main fuel supplier.

In September 2019, another energy crisis occurred when the administration of then President Donald Trump (2017-Jan 2021) took steps to prevent the arrival of tankers to the island, as part of measures to stiffen the economic and financial embargo that the United States has had in place against Cuba since 1962.

“The U.S. government has dedicated itself to threatening and blackmailing companies that supply fuel to Cuba, and this is a qualitative leap in the intensification and application of unconventional measures against those involved in international transportation, without any legal or moral authority,” stated the 2020 annual report on the embargo.

Authorities in Cuba argue that the sanctions hinder access to credit to purchase parts and other inputs, which delays the necessary maintenance of the thermal plants.

Cuba’s dwindling coffers are in no condition to take on extra expenses, given the effects of three decades of economic crisis and the impact of the covid-19 pandemic that has made it necessary to prioritise imports of medical supplies and food.

The power grid is in critical condition and the still high level of dependence on fuel imports is a factor of vulnerability and undermines the country’s projected energy sovereignty and independence, analysts warn.

A wind farm located near the city of Gibara, in the eastern province of Holguín. Cuba has set a goal of steadily reducing the use of fossil fuels and increasing the use of renewable sources in electricity generation to 24 percent, by 2030. CREDIT: Jorge Luis Baños/IPS

A wind farm located near the city of Gibara, in the eastern province of Holguín. Cuba has set a goal of steadily reducing the use of fossil fuels and increasing the use of renewable sources in electricity generation to 24 percent, by 2030. CREDIT: Jorge Luis Baños/IPS

Aging infrastructure

Cuba has an installed potential of more than 6500 MW/h, but the real generation capacity is only half of that, and when several generator units are disconnected from the National Electric System (SEN), it is impossible to meet peak demand of 3300 to 3500 MW/h.

The country has eight thermal power plants with 20 generation blocks and a total capacity of some 2600 MW/h, equivalent to 40 percent of the electricity that can potentially be generated in this island nation of 11.2 million people.

Several of them are able to handle Cuba’s extra-heavy crude (between seven and 18 degrees API), whose sulphur content of seven to eight percent increases corrosion in the boilers, making it necessary to reduce the time between routine maintenance, to 50 to 70 days a year.

Cuba has an oil and accompanying gas production equivalent to 3.5 million tons per year (22 million barrels), from which 2.6 million tons (16.3 million barrels) of crude oil and approximately one billion cubic meters of natural gas are obtained, according to 2020 data released by the official media.

The network of power plants forms the backbone of a system that is complemented in the 15 provinces with fuel oil engines and diesel generators, which have also been hit by the shortage in spare parts and which use part of the 150 to 200 million dollars a month in fuel imports, according to official reports.

The rest of Cuba’s electricity comes from local liquefied petroleum gas (nearly eight percent), renewable sources (five percent) and three percent from floating units (patanas), which also use fossil fuels, in Mariel Bay, 45 km west of Havana.

With one exception, the thermoelectric plants, mainly built with technology from the defunct Soviet Union and Eastern European socialist bloc, have passed their 30 to 35 year lifespan, and 40 to 80 million dollars are needed to repair each plant, according to industry leaders.

To alleviate the current crisis, the government announced an investment scheme aimed at reactivating currently unused generation potential and prioritising the staggered maintenance programme.

“The strategy’s projects include four thermal generation blocks of 200 MW/h each, which will use national crude oil and … today there are projects in different stages to produce 3500 MW/h from renewable sources, which have been affected by the current crisis,” said Arronte.

The Belgian company BDC-Log Servicios Logísticos y Transporte is optimising its operation through the use of solar panels installed on the roofs of its warehouses in the Mariel Special Development Zone, in the western province of Artemisa. The policy for the development of renewable sources in Cuba, approved in 2014, aims to encourage foreign investment in large and small projects, in order to boost energy efficiency and self-sufficiency. CREDIT: Jorge Luis Baños/IPS

The Belgian company BDC-Log Servicios Logísticos y Transporte is optimising its operation through the use of solar panels installed on the roofs of its warehouses in the Mariel Special Development Zone, in the western province of Artemisa. The policy for the development of renewable sources in Cuba, approved in 2014, aims to encourage foreign investment in large and small projects, in order to boost energy efficiency and self-sufficiency. CREDIT: Jorge Luis Baños/IPS

Renewable energies: ups and downs

In 2014, the Cuban government approved a “Policy for the development of renewable energy sources and efficient energy use by 2030”, which aims to gradually reduce the use of fossil fuels and sets a target for 24 percent of energy to come from clean sources by that year.

The policy is also geared towards fomenting foreign investment, in both large and small local projects, with the objective of improving energy efficiency and self-sufficiency, with installations mainly connected to the national grid.

According to some estimates, more than three billion dollars in financing will be needed in order to develop more than 2000 MW/h of new capacity in renewable sources over the next nine years.

Decree-Law No. 345 passed in 2019 on the development of renewable sources contains incentives to promote self-supply from clean energy, the sale of surplus energy to the national grid, as well as tariff and tax benefits for individuals and legal entities that use these sources.

The law also proposes the installation of the most efficient LED bulbs in public streetlights, the sale of solar water heaters and efficient appliances, as well as public education campaigns on the need to save energy.

Cuba ended 2020 with an installed capacity of almost 300 MW/h from renewable sources, some of whose installations were supported by international projects and institutions.

Studies indicate that the expansion of renewable sources could reduce the use of fossil fuels in electricity generation by 2.3 million tons a year and could cut carbon dioxide emissions by eight million tons.

However, these projections clash with the high cost of technologies to obtain energy from sunlight, wind, water and biomass.

In Cuba, which aims to develop all of these sources, the solar energy programme is the most advanced, in a country with average solar radiation of more than five kilowatts per square meter per day, which is considered high.

In late July, resolutions were published allowing people to import solar power systems, free of customs duties and without commercial purposes, as well as equipment, parts and components that generate or operate as renewable energy sources.

Some chain stores also sell solar panels for more than 1,500 dollars per unit, compared to the monthly salaries of Cubans that range from 87 to 400 dollars.

Although the state can buy surplus energy from private consumers, people consulted by IPS said it was not worth the cost of purchasing and setting up a photovoltaic system and the several years needed to recover the initial investment.

Another pending issue is the technology to accumulate solar energy for use at night.

Lack of investment in clean energy compromising fight against climate change and poverty

  • New research highlights a chronic lack of finance that will leave billions of people in Sub–Saharan Africa and Asia without electricity or clean cooking by 2030
  • Urgent action to accelerate investment in clean energy for developing countries is needed from global leaders assembling at COP26 to ensure a just energy transition

VIENNA, Austria, Oct. 14, 2021 (GLOBE NEWSWIRE) — This year's Energizing Finance research series "" developed by Sustainable Energy for All (SEforALL) in partnership with Climate Policy Initiative (CPI) and Dalberg Advisors "" shows the world is falling perilously short of the investment required to achieve energy access for all by 2030 for the seventh consecutive year.

In fact, tracked finance for electricity in the 20 countries that make up 80 percent of the world's population without electricity "" the high–impact countries "" declined by 27 percent in 2019, the year before the onset of the Covid–19 pandemic. The economic strain caused by Covid–19 is expected to have caused even further reductions in energy access investment in 2020 and 2021.

Energizing Finance: Understanding the Landscape 2021, one of two reports released under the series, finds committed finance for residential electricity access fell to USD 12.9 billion in 2019 (from USD 16.1 billion in 2018) in the 20 countries. This is less than one–third of the USD 41 billion estimated annual investment needed globally to attain universal electricity access from 2019 to 2030.

Meanwhile, there is an abysmal amount of finance for clean cooking. Despite polluting cooking fuels causing millions of premature deaths each year and being the second largest contributor to climate change after carbon dioxide, only USD 133.5 million in finance for clean cooking solutions was tracked in 2019. This is nowhere near the estimated USD 4.5 billion in annual investment required to achieve universal access to clean cooking (accounting only for clean cookstove costs).

These findings have been released just ahead of COP26 in Glasgow, where global leaders will focus on how to spark meaningful progress on fighting climate change. As part of this, they will need to consider how to reduce global emissions from the energy sector while also increasing energy access in developing countries to support their economic development.

"We are at a critical moment in the energy–climate conversation," said Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary–General for Sustainable Energy for All and Co–Chair of UN–Energy. "What is clear is that the path to net zero can only happen with a just and equitable energy transition that provides access to clean and affordable energy to the 759 million people who have no electricity access and 2.6 billion people who lack access to clean cooking solutions. This requires resources to mitigate climate change and create new opportunities to drive economic development and enable people everywhere to thrive. Energizing Finance provides an evidence base of current energy finance commitments and the finance countries require to meet SDG7 energy targets."

In 2018, 50 percent of total electricity finance flowed to grid–connected fossil fuels in the high–impact countries compared to 25 percent in 2019. While this is a positive trend for the climate, tracked investment in off–grid and mini–grid technology also declined and represented only 0.9 percent of finance tracked to electricity.

Dr. Barbara Buchner, Global Managing Director at CPI, who partnered with SEforALL on Energizing Finance: Understanding the Landscape 2021, said: "Achieving both the Paris Agreement and universal energy access requires far greater investment in grid–connected renewables and off–grid and mini–grid solutions than what has been tracked in Energizing Finance. These solutions are essential to helping high–impact countries develop their economies without a reliance on fossil fuels."

To better illuminate the challenges high–impact countries face, the second publication in the series, Energizing Finance: Taking the Pulse 2021, offers a detailed look at the estimated volume and type of finance needed by enterprises and customers to achieve universal energy access for both electricity and clean cooking by 2030 in Mozambique, Ghana and Vietnam. Importantly, it illustrates the energy affordability challenges people face in these countries and the need for financial support for consumers, such as subsidies.

The report finds that providing access to clean fuels and technologies, i.e. modern energy cooking solutions, in Ghana, Mozambique and Vietnam will cost a total of USD 37–48 billion by 2030; 70 percent of which will be for fuels (e.g., LPG, ethanol and electricity). A more achievable scenario would be for all three countries to deliver universal access to improved cookstoves at a total cost of USD 1.05 billion by 2030.

"Ghana, Mozambique and Vietnam each have unique challenges to achieving universal access to electricity and clean cooking," said Aly–Khan Jamal, Partner at Dalberg Advisors, who partnered with SEforALL on Energizing Finance: Taking the Pulse 2021. "This research digs deep into these national contexts to identify solutions that can make Sustainable Development Goal 7 a reality."

Providing results–based financing for energy project developers and exploring policies that facilitate demand–side subsidy support and reduce taxes on solar home systems are among several policy recommendations presented for Ghana, Mozambique and Vietnam.

Energizing Finance also advocates for increased innovation in financial instruments to reach the scale of finance needed for universal clean cooking access; for integration of electricity access, cooking access and climate change strategies; and for national governments, bilateral donors, philanthropies, and DFIs to all increase their efforts to mobilize commercial capital to Sub–Saharan African countries.

More of the reports' key findings and recommendations are available here.

Notes to editors

Contact
For further details on the reports or any interview requests, please contact: Sherry Kennedy, Sustainable Energy for All: Sherry.Kennedy@SEforALL.org / media@seforall.org or +43 676 846 727 237

About Sustainable Energy for All

Sustainable Energy for All (SEforALL) is an international organization that works in partnership with the United Nations and leaders in government, the private sector, financial institutions, civil society and philanthropies to drive faster action towards the achievement of Sustainable Development Goal 7 (SDG7) "" access to affordable, reliable, sustainable and modern energy for all by 2030 "" in line with the Paris Agreement on climate. SEforALL works to ensure a clean energy transition that leaves no one behind and brings new opportunities for everyone to fulfill their potential.

SEforALL is led by Damilola Ogunbiyi, CEO and Special Representative of the UN Secretary–General for Sustainable Energy for All and Co–Chair of UN–Energy. Follow her on Twitter @DamilolaSDG7. For more information, follow @SEforALLorg.


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