Since the United States and Cuba reopened their respective embassies last month, reestablishing full diplomatic relations for the first time in 54 years, foreign policy experts have focused mainly on the expected impacts on Cuba’s economy and trade. But this geopolitical development also will affect the ambitious energy policies of the cash-strapped country. Despite the impressive results of Cuba’s ongoing energy revolution, the country will need massive foreign investment to revitalize its energy sector.
This two-part blog series explores the energy revolution in Cuba (part 1) and how the repeal of trade embargoes will affect the energy policy and goals of the Caribbean’s most populous island-nation (part 2).
Following Fidel Castro’s communist takeover in 1959, U.S.-imposed sanctions put great strain on Cuba’s economy for more than half a century. The fall of the Soviet Union, Cuba’s closest ally and cash cow until 1991, exacerbated the situation. For many observers, it is a miracle that the country did not go bankrupt and that the communist regime survived the many economic and political challenges that it faced.
Cuba’s almost exclusive reliance on fossil fuels—which account for as much as 96 percent of domestic electricity generation—poses a considerable economic burden, particularly since most of these fuels are imported. The heavy dependence on oil, mainly from Venezuela, has driven up public debt to nearly 40 percent of GDP. When hurricanes devastated Cuba’s already inefficient electric grid, the country had to take drastic measures. In 2006, the government instituted a series of reforms in what came to be known popularly as “La Revolución Energetica”, or the Energy Revolution.
The Revolution is characterized by six building blocks:
- Improving efficiency in households and businesses by replacing older appliances,
- Complementing large central power plants with distributed generation and improving the transmission and distribution networks,
- Increasing the use of renewable energy technologies,
- Increasing exploration and production of local oil and gas resources,
- Increasing international cooperation, and
- Raising public awareness.
In 2014, Cuba set a target of producing 24 percent of its electricity from renewable sources by 2030.
So far, the Energy Revolution has been quite successful. Most of Cuba’s inefficient electrical appliances, including 2.5 million refrigerators, 1 million fans, and 9.4 million incandescent light bulbs, have been replaced. In just the first two years of the Revolution, nearly 116 million incandescent bulbs were replaced, making Cuba the first nation to entirely phase out the bulbs. By 2008, Cuba was consuming 66 percent less kerosene, 60 percent less liquefied petroleum gas, and 20 percent less gasoline than before. In addition, the country’s carbon dioxide emissions were cut by 5 million tons, equivalent to 18 percent of Cuba’s total emissions in 2002.
The government also has added nearly 3 gigawatts of capacity through decentralized systems and has reduced transmission and distribution losses to 14.8 percent. As a result, blackouts are mostly a thing of the past. However, most of the decentralization relies on expensive and inefficient diesel and fuel oil generators, rather than on economically and environmentally sustainable domestic renewable resources.
Central to Cuba’s policy has been creating awareness about energy conservation. Broad public education on energy saving was prominent even before it became a specific pillar of the Energy Revolution. From “Click Patrols” in the 1970s that visited homes asking families to turn off unused appliances, to exporting its energy conservation expertise to other Latin American nations like Haiti and Venezuela, Cuban energy education has remained strong. Even when the economy tumbled post-1991, the government did not decrease its spending on education.
Since 1997, the Ministry of Education has run an Energy Saving Program, known as PAEME, that creates public environmental awareness through extracurricular activities and school-based programs, such as presenting energy themes in textbooks on geography and biology. Many Cuban universities offer masters degrees in energy efficiency, photovoltaic technology, and other energy issues. Between 2006 and 2008 alone, Cuban media focused some 1,600 newspaper articles, nearly 5,200 radio broadcasts, and 17,000 television broadcasts on topics such as energy conservation, renewable energy, and climate change.
Despite Cuba’s notable success in curtailing energy consumption, things are less rosy on the generation side. With renewable energy accounting for just 4 percent of production, the country has a long way to go before reaching its target of 24 percent by 2030. Cuba needs significant foreign investment both to finance renewable energy projects and to improve its highly inefficient grid. The restoration of diplomatic ties with the United States is only the beginning, and the country needs to unleash a slew of reforms to boost investor confidence, which will be detailed in part 2 of this blog.
Shashank Gouri is a summer research intern with the Climate and Energy Program at Worldwatch Institute. He is currently pursuing a master’s degree in Energy Policy from Stony Brook University, New York.
While the opinions expressed are of the author alone, Shashank Gouri would like to thank Laurie Guevara-Stone of Rocky Mountain Institute for her valuable inputs.