“Large consumers” will have to produce 50% of the energy they use as of 2028
14ymedio, Madrid, 27 November 2024 — Cuba’s state-owned companies, private companies and any governmental or foreign dependency must implement a series of measures for energy efficiency. Among them, they must have their own system to supply 50% of the energy they use during peak hours. This will be required from 2028 for “large consumers,” those who need 30 megawatts per hour or 50,000 liters of fuel on average monthly.
This is established by a new law published this Tuesday in the Official Gazette, Decree 110/2024, on “Regulations for the control and efficient use of energy carriers and renewable energy sources.”
The text repeals a 2019 resolution on the subject and has been in the works for at least a year, with recurrent public appearances by the authorities in recent months regarding the unrelenting crisis. The State cannot continue subsidizing electricity to the private sector, and it is imperative to save electricity. The resolution is published in the midst of a fever for renewable energies, specifically solar panels, unleashed on the front pages of the official press for weeks.
Fundamentally, the decree says that “state and non-state economic actors, foreign investment modalities, representative offices and branches of foreign entities, dependencies or other representations of foreign institutions, as well as associative forms” have to implement “a management system for the control and efficient use of energy carriers and renewable energy sources, in accordance with their corporate purpose, functions and approved mission, in relation to the commercial activities they carry out.”
Companies that already exist are given a period of three to five years to adhere to the measures
To do this, they must take a series of measures, including establishing a “program for the development, maintenance and sustainability of renewable sources and the efficient use of energy, with a reach of five years.” These should include “the goals that are proposed to be achieved, the necessary financial and human capital” and a plan for electricity consumption during peak hours (daytime, between 11 am and 1 pm, and at night, between 5 pm and 9 pm).
As reported on national television upon giving news of the decree, all economic entities that start new ones must have this plan within their project so that it can be approved by the authorities. For those that already exist, they are given a period of three years from the publication of the law in the Gazette to adhere to the measures.
The law requires that 50% of the electricity of large consumers during daytime peak hours come from “renewable energy sources.” “In cases where for reasons of space or structure of the roof of the installation or building it is not possible to install photovoltaic panels” to reach that 50%, the text continues, “the contracts of installed power in the photovoltaic solar parks must be signed with the Unión Eléctrica, as established in the regulatory provisions dictated by the Minister of Energy and Mines.”
Another of the elements provided for in the decree is a change in tariff. The Electric Union of Cuba will take as a reference “the real cost of diesel generation at the official exchange rate approved by the Central Bank of Cuba for the new companies considered large energy consumers from their start-up.” The Mariel Special Development Zone (ZEDM) is exempt, however, from this “real-cost tariff,” and “the rates established by the Electric Union” are applied to each one its companies.”
For “new investments that are considered large consumers,” the law requires that 50% of the electricity they consume during daytime peak hours come from “renewable energy sources”
The law lists a series of violations that will entail sanctions, which can include “deducting” 50% of the administrative fuel for a period of three months, the interruption of electricity service up to 72 hours or fines of up to 15,000 pesos. The listed “violations” are numerous and include, for example, “not having an adequate technical and operating state of the facilities and energy-consuming equipment”; “having dirt in the filters, evaporators and condensers in the climate and refrigeration equipment”; “using air conditioning equipment in non-technological premises, at temperatures below 24ºC”; “having refrigeration equipment and non-hermeticized air-conditioned areas”; “failing or not having an electricity consumption plan for the peak hours”; and even “not having the Energy Efficiency Label on the end-use equipment of energy and renewable sources that are marketed in the country.”
Among the infractions there is a whole section referring to fuel, in which sanctions are provided for; for example, “not carrying out periodic analysis of the operations that are executed with prepaid fuel cards,” “failure to comply with the due custody of prepaid fuel cards”and “failure to comply with the fact that the prepaid fuel cards are associated with the vehicles and those responsible.”
All this is planned for a “period of stability of the national electric power system,” since the decree foresees tougher measures – up to 20,000 pesos of fines and other sanctions – in case of “an electrical contingency regime.” This is decreed when “the National Electroenergetic System fails to meet the demand for generation capacity, so it is necessary to affect the electrical service in a planned and sustained manner for more than 72 hours.”
The Government establishes the creation of “energy councils,” which are constituted “at the national, provincial and municipal levels”
To monitor compliance with the new resolutions, the Government establishes the creation of “energy councils,” which are constituted “at the national, provincial and municipal level” with “representatives of political, social and mass organizations of each level” as “permanent members,” and the possibility of inviting, “by own decision or at the proposal of a member,” “representatives of state and non-state economic actors, modalities of foreign investment, as well as associative forms.”
Beyond a brief report on television, the official media have not yet dedicated, as they usually do, a more extensive explanation of the new law, whose wording is more cumbersome than usual. It is striking, for example, that they do not express the obligations with the conditional modal verb “should” but with affirmative verbs. In any case, it looks like it will soon raise indignation, at least from smaller entrepreneurs.
“It’s a direct blow to all these new MSMEs,” says a young baker living in Havana. “How much does an energy system like this cost, 35,000, 40,000 dollars? Who can take on that burden?”
*Micro, Small, Medium Enterprises [mipyme in Spanish]
Translated by Regina Anavy
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