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Posted September 30, 2005 by publisher in Business In Cuba

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By Patricia Grogg | Global Information Network

Cuba continues to be plagued by an energy crisis and blackouts, despite major investments to modernize a service that now extends to nearly 96 percent of the country’s 11.2 million inhabitants.

An increase in domestic production and an agreement with Venezuela to import oil under highly favorable terms have brought an end to the severe shortages of the mid-1990s, which led to an abrupt plunge in Cuba’s power-generation capacity.

According to official figures, the Caribbean island now produces around one half of the oil it consumes, which is roughly 160,000 barrels a day.

The other half comes from Venezuela, whose oil exports to Cuba have risen from 53,000 to between 80,000 and 90,000 barrels a day, according to Venezuelan government sources.

Nevertheless, the National Electric Power System (SEN) is still not able to maintain a stable supply of electricity, due to repeated breakdowns in its main thermoelectric power stations.

Cuban authorities themselves have stressed the risks and difficulties posed by the poor condition of the country’s electrical power generation installations, most of which have been in use for almost four decades.

Interruptions in service become even more acute during hurricane season, from June through October, when torrential rains and gusting winds wreak havoc with the power grid.

“When it’s not because of a hurricane, it’s because one of the power plants has been shut down for maintenance work, or because of a breakdown. The blackouts never go away,” complained Juan Alvarez, a resident of the Havana district of Playa, one of the areas hardest hit by power cuts in this city of 2.2 million people.

Alvarez had just found out, on Sept. 23, that the damage to the electric power distribution network in the western provinces of Havana, City of Havana and Matanzas caused by Hurricane Rita on Sept. 20 had been fully repaired, and the system was operating normally once again.

That same day, however, a leak in the cooling system at the Antonio Guiteras power station in Matanzas, 87 kilometers west of Havana, made it necessary to shut the plant down for repairs.

The Antonio Guiteras station, which generates 15 percent of the electricity consumed in Cuba, was upgraded four years ago at a cost of $30 million and adapted to use the heavy crude oil with a high sulfur content that Cuba itself produces.

Thanks to the conversion of this and other power plants, 90 percent of Cuba’s electricity has been generated with domestically produced crude since the second half of 2002.

Official estimates indicate that this measure has led to considerable savings. The Antonio Guiteras plant alone used to consume half a million tons of imported oil a year, which at current prices would translate into an annual expenditure of about $70 million.

“We paid off the investment in the Guiteras plant in one year. Cuban oil and natural gas cost between 30 and 40 percent less than imports,” Marcos Portal, the minister of basic industry at the time, told foreign journalists when the conversion work was completed.

Two years later, however, a string of major breakdowns at that same thermoelectric plant sparked an energy crisis which, among other consequences, cost Portal his post. He was replaced by chemical engineer Yadira Garcia, the current minister.

The availability of electrical power in Cuba dropped to 50 percent of the installed capacity, spurring a series of measures to confront the shortage.

This included the temporary closure of about 100 factories and businesses and a change in school and work schedules to take better advantage of the hours of daylight, as well as others aimed at saving as much energy as possible and minimizing the impact on the general population.

Experts agree that an estimated 60 to 65 percent of the total installed capacity needs to be available in order to provide adequate electrical power service.

In 1988 and 1989, that proportion averaged 80 percent, but back then the country’s power plants were newer, and were run with the lighter, higher-quality oil imported from the former Soviet Union.

Late last year, the government of Fidel Castro acknowledged that the electricity crisis had dealt a serious blow to almost every branch of the economy, including a total or partial paralysis of the steel industry for 220 days.

The country was also obliged to spend an additional $200 million on unplanned imports.

Moreover, the increase in the frequency and duration of power outages—which had at one point come to be seen as a thing of the past by much of the population—has had a heavy social impact.

During the first half of this year, it was not uncommon for Havana residents to find themselves without electricity for up to six and seven hours at a time. The problem was even more severe in other parts of the country, where power outages could stretch to 12 hours.

“Blackouts are more frequent and last longer here than in the capital,” a hotel worker in Guantanamo, 929 kilometers southeast of Havana, told IPS.

Economists consulted by IPS noted that $2 billion of investments in the energy sector between 1990 and 2003 made it possible to replace a number of power plants deemed inefficient and raised the country’s installed capacity to 3,200megawatts.

The government’s strategy to confront the current crisis has placed special emphasis on energy conservation, and included the import of small diesel-powered generators as an emergency solution for interruptions in service caused by breakdowns or storm-related damage.

But experts believe that the long-term energy solution for Cuba lies with the use of more modern technology, the gradual replacement of thermoelectric power plants, and the diversification of energy sources, given the country’s heavy dependence on fossil fuels, which currently account for 80 percent of the power generated.

It has been pointed out, for example, that Cuba could take greater advantage of installations used to generate electric power in the sugar industry, which use sugarcane biomass.

These have a total installed capacity of 800megawatts, equivalent to the country’s two main thermoelectric plants combined, namely the Antonio Guiteras plant in Matanzas and another in Santiago de Cuba, more than 900 km southeast of the capital.

In addition to being a renewable and non-polluting source of energy, sugarcane biomass can produce a kilowatt of electricity at a cost of 4 cents, which is less than half the cost of a kilowatt produced by burning fossil fuel.

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