Cuba’s electrical system has long struggled due to limited investment, outdated equipment and a lack of resources for timely maintenance. The situation has worsened in recent years due to a challenging economic environment. President Miguel Diaz-Canel cited the ongoing US embargo as the underlying cause, a refrain Cubans are used to and tired of hearing. His Prime Minister Manuel Marrero Cruz had a more circumspect analysis of the root causes: most of the island’s power plants are operating far below their capacity, and blackouts have become a regular occurrence, particularly during the summer months and hurricane season.

The power outages in October led to significant social and economic impacts. For many Cubans, the loss of electricity meant not only disrupting daily routines but also interruptions in critical services such as healthcare and education. Hospitals had to rely on backup generators in some areas and schools were forced to close. The energy shortages also affected businesses, especially those reliant on refrigeration, further deepening the economic crisis.

In a country where food can be scarce, a two-day blackout can wipe out a family’s entire food stock for a month or more. Inevitably, protests over the power cuts erupted in several Cuban cities as frustrated citizens expressed anger at the government’s inability to address the persistent energy shortages. The Cuban government, already grappling with mounting economic challenges, faced increasing pressure to stabilize the power supply and find long-term solutions to the country’s energy woes. While efforts are underway to repair and upgrade the electrical grid, the October blackouts highlighted the urgent need for comprehensive energy reform and external assistance to restore Cuba’s power system reliability.

Revolutionary Cuba’s history of subsidies

Cuba’s former dependence on the Soviet Union and its subsequent economic crises, particularly during the ‘Special Period,’ shaped much of its modern history. After the Cuban Revolution in 1959, the Soviet Union became Cuba’s primary economic and military ally. The USSR provided Cuba with substantial aid, including subsidized oil, trade agreements and military support, in exchange for Cuban alignment with Soviet policies during the Cold War. This dependency allowed Cuba to maintain its socialist economy and centralized state despite limited resources and the ongoing US embargo.

However, this dependence ended abruptly with the dissolution of the Soviet Union in 1991. The loss of Soviet support led to a dramatic economic collapse in Cuba, known as the ‘Special Period,’ which lasted most of the 1990s. Without access to subsidized oil or financial support from the USSR, Cuba faced severe shortages of food, fuel and essential goods. The country was forced to implement drastic measures to survive, including rationing, converting urban areas into agricultural zones and turning to alternative sources for oil. The ‘Special Period’ also saw a sharp decline in living standards, with widespread poverty and malnutrition. The Cuban government sought new alliances, but the economic crisis led to more significant hardship for the population and almost cost the Castro brothers their grip on power.

In the early 2000s, Cuban President Fidel Castro found another ‘angel investor’ and entered into a new arrangement with Venezuela under the leadership of Hugo Chávez. The PetroCaribe agreement provided Cuba with affordable oil supplies, paid for partly by trade in Cuban medical services, among other exchanges. This agreement alleviated some economic pressures during the ‘Special Period.’

However, as Venezuela’s economic situation worsens, the PetroCaribe arrangement has begun to falter, leaving Cuba again vulnerable to energy shortages and economic instability, reminiscent of its earlier struggles. Other regional allies have stepped in, including Mexican President Claudia Sheinbaum, who sent 500,000 barrels of oil to the embattled island this month. However, there is a valid question as to whether Cuba is entering a new ‘Special Period’ and if the Communist government, in power for 66 years this 1 January, can continue to rule the island as a one-party state indefinitely.  

The future of Cuban energy

As mentioned, Cuba’s energy sector faces significant challenges, with the country’s reliance on outdated infrastructure, limited access to fossil fuels and vulnerability to natural disasters. Given the pressing issues of energy security, economic sustainability and environmental concerns, the Cuban government must encourage more significant investment in renewable energy sources to ensure long-term energy resilience. This transition is particularly crucial in light of the island’s frequent power outages and dependence on external sources for oil and gas.

Cuba has significant untapped potential for renewable energy, especially in solar, wind and biomass energy. The country’s tropical climate offers abundant sunlight, while its coastal areas are ideal for wind energy projects. Cuba’s agriculture-based economy also presents opportunities to harness biomass, utilizing sugarcane waste and other organic materials for energy production. By investing in these renewable sources, Cuba could reduce its reliance on expensive imported oil, a significant economic burden, and improve energy security.

To attract investment in renewable energy, the Cuban government must prioritize policy reforms that create a favorable investment climate. This could include offering incentives such as tax breaks or subsidies for private and foreign investors in renewable energy projects. Additionally, Cuba should seek to strengthen partnerships with international organizations and countries with advanced renewable technologies to gain access to funding and expertise in implementing large-scale projects.

Furthermore, a clear and transparent regulatory framework is essential to ensure renewable energy projects are developed efficiently and responsibly. Cuba needs to improve its energy infrastructure by modernizing the grid to accommodate renewable sources, which often fluctuate in production, and by fostering local innovation in renewable technologies.

Cuba is far behind in this game. Afghanistan, Chad, Haiti and North Korea have more installed capacity than the communist island nation. The current government must recognize that the shift to renewable energy offers Cuba economic, environmental and social benefits. With suitable investment and policies, Cuba can reduce its energy vulnerability and, in doing so, better the lives of the Cuban people.