Throughout the 1960s 70s and 80s, Cuba traded one ton of sugar to the Soviet Union in exchange for four tons of oil. This agreement helped the Cuban economy progress in the face of the U.S. trade embargo. But the collapse of the Soviet Union in 1991 ushered in what Cubans call the country’s “Special Period,” an economic crisis punctuated by a sudden lack of fossil fuel energy that crippled every sector of the country’s economy.

Oil shortages have left Cuba with old-school ways of manifesting the the power of the future.

This major setback resulted in an economy that moves at a glacial pace. The Economist Intelligence Unit reports that despite Cuba’s own oil reserves, a healthy volume of imports from Venezuela, and large investment in the island’s refining capacities, troubles such as inconsistent supply and electricity shortages persist. As a result, the country launched its “Energy Revolution” in 2006. The goal was – and still is – to decentralize power generation, improve transmission lines, replace old appliances with energy-efficient ones, and increase the presence of renewable energy sources.

To that end, Cuba’s state-owned Zerus S.A. recently signed a Memorandum of Understanding (MOU) with Havana Energy Ltd., a U.K.-based renewable energy company, to develop a 30 megawatt MW pilot project for generating electricity from sugarcane stalk residue, or bagasse, at a sugar mill in Ciro Redondo. It’s the first step of a larger project that has the potential to satisfy almost half of the island’s 3,000 MW power needs and to possibly deliver a return on investment in just five years.

Cuba has a long history of capitalizing on its domestic natural resources. The Pilotos and Guaso hydro power plants, built in 1912 and 1917, respectively, still operate to this day. But the importance of self-reliance, in terms of energy, became painfully clear when the Soviet Union dissolved. That’s when Cuba began looking earnestly to alternative sources for fuel, which has resulted in renewable sources providing 7 percent of the country’s electricity. According to the U.S. Energy Information Administration, Cuba produced 121 million kilowatt-hours (kWh) of hydropower in 2007. Solar power is also part of Cuba’s energy mix, but its capacity sits at around 3 MW.

Sugarcane bagasse has contributed to Cuba’s energy supply for decades, but as the “Special Period” progressed, power generation from this source dropped, particularly when the government restructured the sugar industry in the early 2000s. But biomass seems to be making a comeback. Should the Ciro Redondo pilot succeed, similar plants at all 56 of Cuba’s sugar refineries will follow. According to Nelson Labrada, Cuba’s vice-minister of sugar, “it is possible via the sugar mills and bagasse-based power plants to generate up to 40 percent of the energy needs of the country.”

On a side note, an invasive African shrub called marabou is being examined for its potential as a renewable energy source. It can be found on more than 800,000 hectares in Cuba, and academics visiting the island in November 2010 noted that it can be used both as an energy source and as a possible export crop. Currently, however, research is in the early stages and it will be some time before marabu becomes a viable source of renewable energy.

Using biomass to generate half of Cuba’s power might go a long way toward reducing the high cost of electricity that Cubans currently face. As it is, the government is imposing high electricity rates on consumers to help stem the rising price of imported oil. According to the U.S. State Department, the average monthly income in Cuba is around 475 pesos (US$18.) Consumers are charged the equivalent of US $0.004 per kilowatt-hours if they keep their electricity consumption to 100 kWh or less each month.  But even if consumption is held to 100 kWh, this still results in an energy bill that eats 20 percent of the average income. If consumers hit 300 kWh per month, electricity rates increase steadily to a high end of the equivalent of US $0.054 per kWh, which typically affects large consumers such as hotels and large buildings.

If, as Vice-Minister Labrada predicts, Cuba can successfully supply enough fuel for its planned bagasse plants, it may significantly relieve the burden of high energy prices. And if the island of Mauritius is any example, successful integration of bagasse is not only possible, but widely beneficial. This tiny island in the southwest Indian Ocean produces more than 5 million tons of sugar cane per year. The bagasse is used to run the country’s sugar mills and exports 318 GW of power to the grid, almost 20 percent of the country’s needs.

Generating its own energy to propel itself forward is just another example of Cuba reinventing itself to tackle daunting challenges. Its current Energy Revolution sprung from a severe necessity: to keep the lights on following the abrupt disappearance of its main energy source. Other countries – including some of Cuba’s Caribbean neighbors – are following suit, embracing wide-ranging renewable energy sources. The new venture with Havana Energy Ltd. has the potential to move Cuba to the front of the pack. Viva la revolución!

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Caribbean renewable energy, developing countries, energy, renewable energy, renewable energy investment, sugarcane bagasse