Cuba’s Economic Collapse Makes Green Energy Only A Dream

National Economy

The Republic of Cuba is an island nation located in the northern Caribbean Sea. The population of Cuba is approximately 11.31 million people[1].

In 2022, Cuba’s economy was ranked 63rd in the world in gross domestic product (GDP)[2]. The country’s economy is dependent on the export[3] of rolled tobacco, nickel mattes, raw sugar, hard liquor, and zinc ore.

Environmental Policies

In 2016, Cuba signed the Paris Climate Agreement[4], agreeing to a series of environmental programs, including installation of over 2,000 MW of renewable energy power plants by 2030, contingent on international support.

Power Generation Capabilities

In 2020, 100% of the people in Cuba had access to electricity[5].  In 2021, the state-owned utility, Unión Eléctrica[6] used refined petroleum (75.9 %), renewable energy (16.6%), and natural gas (7.5%) to generate electricity in Cuba. Biomass is the dominant type of renewable energy used to generate electricity in Cuba.

Recent renewable energy developments in Cuba include:

  • 60 MW Solar Projects TenderIn June 2023, NTPC Limited an energy company under India’s Ministry of Energy has been selected as a consultant to launch a tender for six solar projects in Cuba. All bids for the solar project tender must be submitted by July 20, 2023.
  • 51 MW Wind Project – State-owned Investment Development Company in Renewable Energy Sources is continuing work on the La Herradura Wind Project at a site approximately 375 miles southeast of the nation’s capital, Havana. No significant progress has been made on this project since 2018.
  • 20 MW Biomass Project – The AZCUBA Sugar Group is continuing work on the Quintin Banderas Biomass Power Plant at a site approximately 95 miles east-southeast of Havana. The project is forecast to begin operations in 2025.

Conclusions

In 1959, oil was discovered[7] approximately 75 miles east of the nation’s capital, Havana. In 2020, Cuba produced[8] approximately 49,700 barrels of crude oil per day, while consuming approximately 153,000 barrels oil per day.

Cuba imports the majority of its crude oil from Venezuela at a discounted price under a 2000 energy agreement between the two nations. In 2021, Cuba[9] imported U.S. $70.2 Million of crude oil.

On 24 February 2022, Russia invaded Ukraine, prompting the European Union, United Kingdom, United States, Canada, Japan, South Korea, Australia, and New Zealand to place economic sanctions on Russian imports and exports. As a result, the crude oil and natural gas prices increased by over 50% from May 2021 to May 2022.

On 12 August 2022, a major fire broke out at the nation’s largest oil storage facility[10] near the port of Matanzas, approximately 80 miles east of Havana. The fire resulted in massive destruction to oil storage tanks, oil refinery, and the electric power generation system.

Cuba’s power plants and energy infrastructure have been poorly maintained, resulting in frequent power outages across the island nation. The fire and destruction of the oil storage facility near Matanzas has exacerbated Cuba’s energy crisis.

Cuba is suffering from sky-rocketing inflation due to fiscal mismanagement, currency devaluations, and costly crude oil imports. Cuba’s inflation rate increased[11] to 45.36% in April 2023 from 42.08% in January 2023.

Cuba has significant undeveloped renewable energy resources including onshore wind, offshore wind, solar, and biomass. However, Cuba’s economic collapse is making new, low-cost renewable energy projects only a dream.

 Jack Kerfoot

Website “Our Energy Conundrum”

www.jackkerfoot.com

 

Jack Kerfoot is a scientist, energy expert, and author of the book FUELING AMERICA, An Insider’s Journey and articles for The Hill, one of the largest independent political news sites in the United States. He has been interviewed on over 100 radio, podcast, and television stations from New York City to Los Angeles on a diverse range of energy issues.

 

[1] Cuba Population (2023) –  June 13, 2023, www.worldometers.info

[2] Gross Domestic Product By Country 2022 – Worldometer

[3] The Observatory of Economic Complexity (OEC) – Cuba

[4] Carbon Brief – “2015: Tracking Country Climate Pledges”

[5] The World Bank Group, Access to Electricity (% of Population – Cuba

[6] Our World In Data, Cuba:  Energy Country Profile by Hanna Ritchie and Max Roser

[7] “A Brief History of Petroleum in Cuba” by J. Podruski, E. Carla, and S. Thorrnton in 2016

[8] Worldometers.info – Cuba Oil Reserves, Production, and Consumption Statistics in 2020

[9] The Observatory of Economic Complexity (OEC) – Cuba

[10] “Fire at Cuban Oil Storage Facility Further Exacerbates Electricity Shortages” by Alexander Fangmann, 12 August 2022

[11] Trading Economics, “Cuba Inflation Rate,” 2023 Data

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