Cuba: Power Crisis Highlights Need To Accelerate Energy Transition
By Luis Brizuela
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.
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.
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.