Why is the energy sector at a crossroads in Cuba?

Cuba’s energy sector is at a crossroads. The country’s mostly fossil fuel-fired energy system faces a number of longstanding and serious challenges, including breakdowns at aging power plants, decreasing fuel imports and fuel shortages, and the growing threat of climate change-related disruptions.

Can Cuba transition to a more climate resilient energy system?

Over the past 10 years, Cuba has begun to embark on an energy transition. Recent shifts in law and policy create new and promising opportunities and indicate a desire on the part of Cuba’s policymakers to transition to a cleaner, more climate resilient energy system.

How will Cuba's relationship with other countries impact the energy transition?

Cuba’s relationships with other countries will be key to realizing the energy transition. Since 2000, Venezuela has been Cuba’s primary source of imported oil. However, political and economic troubles in Venezuela caused oil exports to Cuba to fall by about half, resulting in Cuba increasingly seeking oil imports from Mexico and Russia.

Will Cuba experience a new wave of inflation in 2024?

While inflation is estimated to have dropped to 30% in 2023, the price of food increased 78%. Residents of Cuba are expected to experience a new wave of inflation in 2024 following the government’s announcement of a new austerity plan that will include price and tax increases and cuts in subsidies.

Does Cuba rely on fossil fuels?

Cuba’s power system is currently heavily reliant on fossil fuels. In 2022, fossil fuels accounted for about 95% of electricity generation, and about 48% of the fossil fuels used were imported, putting the country at high risk of price shocks and supply shortages.

Why is Cuba importing oil from Mexico and Russia?

However, political and economic troubles in Venezuela caused oil exports to Cuba to fall by about half, resulting in Cuba increasingly seeking oil imports from Mexico and Russia. Cuba has worked with India, the Indian-based International Solar Alliance, and China to develop renewable energy projects.