Lack of Funding and Legal Security Delay Renewable Energy in Cuba

The seminar was held at the end of June in Madrid and was organized by Carlos Malamud. (@sllaudes)

14ymedio bigger14ymedio, Havana, 18 July 2019 — In tune with the energy crisis currently facing the island, a Spanish-Cuban seminar organized in Madrid by the Elcano Royal Institute has analyzed the role of renewable energies in the EU-Cuba Political Dialogue and Cooperation Agreement signed in 2016.

Cuba’s weakness with regards to energy in the last sixty years has been revealed on two occasions that coincide with the collapse of its partners, the Soviet Union in the 1990s, and Venezuela now. The blackouts of recent days, reminiscent of the times of the so-called Special Period — after the collapse of the Eastern Bloc and the withdrawal of its subsidies for Cuba — although the Government attributes today’s blackouts to breakdowns rather than oil shortages, are the latest evidence that Havana’s dependency on other countries is a severe problem not only for the population, but for the whole of the economy, since it affects strategic sectors such as health and industry.

To alleviate the energy crisis, the Government proposed in recent years to resort to the exploitation of its own resources and promote renewable energy, a sector that would have prospects to prosper if not for the eternal problem of legal uncertainty that exists for potential foreign investors.

At the meeting on June 26 at the Spanish Study Center it was concluded that the take-off of renewables is being hindered by financing, since foreign investment faces several risks, among them non-payment of debts, Cuba’s dual currency system, the lack of transparency, the absence of a clear regulatory framework with professional and independent supervision, and the lack of guarantees and reliable mediation mechanisms.

The meeting found that, in 2018, 96.5% of Cuba’s primary energy came from oil and the Government’s 2020 renewable energy targets are far from being met. As for the forecast for 2030, if the authorities intend to meet it, it needs attract about 4 billion euros to install more than 2,000 MW of renewable sources.

Gonzalo Escribano, director of the Energy and Climate Change Program, explained the details of the meeting and its conclusions in the blog of the Elcano Royal Institute, where he gave an account of the renewable resources that Cuba intends to exploit.

The expert indicated that, although there are plenty of solar and wind resources, “it highlights the potential of biomass, which is to be exploited with the construction of 25 new large bioelectric plants and more than 500 smaller biogas plants. The potential of biomass comes from bagasse, a residue of sugarcane, and marabou [a highly invasive shrub that has spread across Cuba]. (…) Consequently, biomass, despite not eliminating greenhouse emissions, does have other positive environmental externalities, such as complementarity with the cultivation of sugarcane and control of an invasive species.”

In recent years, Cuba has signed several agreements with countries such as Russia or Algeria to alleviate the energy emergency due to the Venezuelan debacle, but the cost of imports is a burden that the Plaza of the Revolution can not afford even in the advantageous conditions that these allies offer.

The Agreement with the EU seeks to promote inclusive sustainable development and the 2030 Agenda through different forms of cooperation, such as technical and financial assistance, scientific and technological cooperation, and Cuba’s participation in related European programs to develop capabilities for technology transfer and management of the electricity sector and improvement in its operation, and the generation of investment opportunities. But, according to experts, the goals achieved are poor to date and, if nothing changes, they will continue to not be achieved.


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