Cuba has set a goal to produce 24 percent of its electricity from renewable sources by 2030, up from about 4 percent in 2014. Here’s the strategy for that $4 billion-plus plan, as told to Cuba Trade by Rosell Guerra Campaña, director of renewable energy at Cuba’s Ministry of Energy and Mines.
The presentation, offered in Spanish, has been edited for space and clarity.
Rosell Guerra: Our energy policy aims to reduce dependence on imported fossil fuels and make the environment more sustainable. By generating 24 percent of our electricity from renewables in 2030, we can substitute 1.5 million tons of fossil fuel per year and cut carbon dioxide emissions by 6 million tons per year.
To meet our objective, we aim to install 2,284 MW in major, new generating capacity powered by renewables. That includes 25 biomass plants with a capacity to produce 872 MW, 14 wind farms that can produce 656 MW, solar parks that can produce 700 MW, and small hydroelectric plants that can produce 56 MW. The investment for imported equipment and other supplies for those projects likely will run about $4 billion. And that’s not including outlays for locally-made products or domestic agriculture.
There’s progress already. So far this year, the state has reached agreements with foreign companies on renewable energy projects worth more than $1 billion.
BIOMASS: Of the 25 new bioenergy plants we seek, four have secured financing and are being developed by the state sugar group Azcuba. Seven are being negotiated as joint ventures with foreign partners, including the Ciro Redondo project now under construction. And there are 14 more projects available in the investment portfolio open to investors. Azcuba is handling all the biomass projects.
WIND: Of the 14 new wind farms, the state electric company Union Electrica has financing to develop three. At least two European companies are looking to develop the others as 100 percent foreign-owned projects. They would sell electricity to the Union Electrica through power-purchase agreements. Banks want those companies to measure the wind at the farm sites for a year before they lend money for turbines and installation. So, the companies now are working on those studies.
SOLAR: Last year, we built 22 photovoltaic solar parks in Cuba, and this year, we’re building another 32. With the financing we’ve secured and negotiations with investors, we expect next year to add 56 more parks with a capacity of 224 MW, including 100 MW in projects with foreign partners. Things are advancing so fast that we may increase our plans for generation from new solar parks from the initially proposed 700MW to 1,200MW by adding more parks to the investment portfolio.
HYDROELECTRICITY: The new hydroelectric plants will be small, mostly in mountainous areas. They’ll be added on existing dams to the exit channels for water used for irrigation and other purposes.
INSTALLATIONS ON HOMES: We aim to install 200,000 more solar water heaters on homes by 2022, helping to cut dependence on electricity from power plants. Studies show each solar water heater saves the grid an average 22 kilowatt hours per month. The government is subsidizing the price of the heaters, and it’s modernizing and expanding the factory in Morón in Ciego de Avila province where the heaters are made.
There also are plans to install 20,000 more solar panels on homes, schools and other buildings not connected to the grid, mainly in rural areas.
PRIORITY: The renewables program has top priority for Cuba, because it helps increase our energy independence and reduces our energy costs. Less expensive energy spurs the economy.
There’s a social component in all this. Our system guarantees a minimum level of electricity to residents at very low, subsidized prices [currently starting at less than 1 U.S. cent per kilowatt hour and rising progressively based on consumption.] Several years ago, when oil prices were higher, Cuba was producing electricity at a cost of about 20 cents per kilowatt hour. Today, with oil prices lower and some efficiencies, our production cost is down, likely to around 12 cents per kilowatt hour. But the more we can reduce the production cost, the better for the state and for the society.
Renewables help the environment, too. While Cuba is not a major polluter in global terms, the electricity sector is the top source of emissions in the country. Shifting to renewables can stem pollution.
CHALLENGES: Financing is a challenge, of course. But the government has modernized the law and rules for foreign investment. We’ve had foreign investors in energy in Cuba for decades in the oil and gas sector. Canada’s Sherritt International is a partner in gas venture Energas, which has been producing electricity for the grid since the 1990s. Energas has expanded operations numerous times, proof that private production of electricity for the grid can work.
STRENGTHS: Some countries have conflicts in energy policy, because their electric companies discourage energy production outside their own large power plants. But in Cuba, we encourage “distributed energy” through smaller plants and on homes. One reason is that our country gets hit by hurricanes, and with smaller production units we can isolate different parts of the system when one part is damaged by a storm. We’ve also learned that the closer energy production is to the user, the smaller the losses in the distribution system. It’s more efficient.