Cuban energy woes are just the island nation’s latest economic blow

Opinion

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This article was published 07/11/2024 (334 days ago), so information in it may no longer be current.

Once again, Cuba found itself in the media spotlight last month. And, as is often the case, it was for all the wrong reasons.

Evidently, one of the country’s largest power-generating stations in the province of Matanzas had been offline for a few days. As you’ve probably heard, much of the country’s power grid has now been restored — but with rotating electrical blackouts.

Of course, Hurricane Oscar, which flooded parts of eastern Cuba in late October, did not help matters at all. And Cubans have already been struggling mightily with other shortages of food, medical supplies and cooking oil.

In response to the “energy emergency,” the government sent most public sector employees home, ordered non-essential industries to shutter and closed universities and schools. Overworked diesel generators became the main source of power for water pumps, hospitals, airports and hotels.

Clearly, Cuba’s energy woes and shortages have grown more acute over the years. At one time, though, there was a lot of talk and hope that Cuba would one day become an energy superpower in the Caribbean.

But its inability to get around the complications of high-sulphur crude extraction has put the kibosh on those dreams. Still, the country does produce enough serviceable oil to meet roughly 30 per cent of its energy needs. It is obviously not enough, and the country has no money to purchase oil in the international spot market.

One also wonders about what happened to Russia’s €1.2-billion pledge in 2015 to build four thermoelectric plants on the island. Apparently, the Cuban government wasn’t able to comply with Moscow’s strict loan conditions.

Not surprisingly, the political leadership in Havana has put the blame for the country’s energy woes squarely on the decades-old U.S. economic blockade.

“The complex scenario is caused primarily by the intensification of the economic war and financial and energy persecution of the United States,” wrote Cuban President Miguel Díaz-Canel on X.

While that is certainly a part of the “why” question, it is surely not the most compelling explanation.

A spokesperson for the U.S. State Department was quick to respond: “As we have seen over the past few years, Cuba’s economic conditions, stemming from long-term mismanagement of its economic policy and resources, have increased hardships on the Cuban people.”

More to the point: it seems pretty clear that Cuba cannot rely on desperately needed, though often sporadic, oil imports from Russia, Iran, Algeria or even Mexico.

The Chinese are also balking at Cuban pleas for help and instead are threatening to call in their hundreds of millions of dollars in generous loans in response to Cuba’s aversion to embracing market mechanisms more wholeheartedly.

More significantly, oil-rich Venezuela is no longer supplying over 100,000 barrels a day of crude — in exchange for Cuban medical professionals who are treating sick Venezuelans. Some reports put the amount of daily Venezuelan oil imports down to 32,000 barrels. That number does not even come close to meeting Cuba’s daily energy needs of 120,000 barrels.

It also bears remembering that prior to the pandemic, Cuba was attracting more than 4.7 million visitors per year (and the billions in receipts that came with those numbers).

In a highly competitive economic space, that is now down to about 2.6 million travellers annually. It goes without saying that widespread media accounts of Cuba’s electrical blackout is not good news for a country that is becoming increasingly more dependent upon tourism dollars.

More worrisome for top Cuban leaders is the possibility of widespread outbursts of public dissent and anger. Cubans can only take so much when they are struggling to keep body and soul together in the absence of at least some electricity for parts of their day.

The Cuban government is no doubt mindful of the fact that it doesn’t want a repeat of the July 2021 countrywide street protests and the attendant violent crackdown.

The fact of the matter is that Cuba does not have a lot of options when it comes to power generation. It has expanded its renewable capacity with more solar panel fields and wind turbines, but those will only produce small amounts of electrical output.

In addition, it does not appear that the defunct nuclear power facility in south-central Cuba (near Juragua) is a viable alternative at the moment.

The central problem is that Cuba’s electrical infrastructure is over five decades old, nearly worn out and badly in need of a system-wide upgrade and eventual replacement. However, that would require substantial financial resources, outside technical assistance and help from a few Cuba-friendly nations — all of which seems to be in short supply today.

Unfortunately, the country may have to do what Cubans are long accustomed to — that is, masterful improvisation, surgically cutting and stitching parts of the energy grid together and hoping for the best. But sooner or later, the magic of Cuba being able to make something out of not much is going to flicker out.

Peter McKenna is professor of political science at the University of Prince Edward Island in Charlottetown.