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In early December, 2005 the president, Fidel Castro, spoke at length about these problems, and at the National Assembly meeting, at the end of that month, the government announced that 2006 would be the year of the energy revolution |
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Investment, conservation and price increases look to meet demand through reducing consumption and wastage while increasing supply
Underinvestment in sector
The electricity generation facilities and transmission network have suffered from underinvestment for many years. In particular the seven large power plants, most using antiquated Soviet technology, are notoriously unreliable, rarely working at more than 60% of capacity. This is partly because of a shortage of spare parts, and partly because they were converted in the mid 1990s to run on locally produced sulphurous fuel oil which requires extensive ongoing maintenance to the plants.
During 2004 regular power cuts began to be reminiscent of the early 1990s. Although some improvements were made (and the minister replaced) the system continued to be plagued by problems during 2005 (total electricity generation fell by 2%) and it became apparent that a major overhaul of the entire system was necessary.
Conclusion re energy strategy
Much attention has focused on the strategy of purchasing micro-generators rather than replace or refurbish some of the existing major plants. The major advantages of the chosen strategy are that it is quick, it decentralizes power (a national security concern) and it allows the system to be topped up at peak hours. Set against this, the generators will require ongoing maintenance and spare parts (often a problematic area in Cuba), and does not solve Cuba's medium-long term needs.
For a country like Cuba with a very low average demand this system does make sense if implemented correctly and the initial results seem pretty positive. The Financial Times reported in July, 2006 that Cubans were applauding their first summer without blackouts since 1991.
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The Energy Revolution
Increase in overall electricity generating capacity through the purchase of approx 4,158 micro-generators (at a cost of +US$ 1bn) which will be either plugged into the grid to be used on a rotational basis at peak times or will serve hospitals, factories, schools directly.
Decentralisation of generating capacity
There will be a shift from the existing massive plants to smaller regional plants using the micro-generators (see above) and more use of solar and wind power.
Diversification of sources of power
Oil & gas accounts for most of Cuba's electricity generation. Plans are in progress to increase the percentage of gas used from oil installations (combined cycle generation) from the current 11%. This will be facilitated by further investment by Energas S.A., a JV involving Sherritt, to add a further 65-mw expansion to the existing 311 mw capacity.
Modernisation of the transmission network to reducelosses.
Promotion of energy conservation
A major drive was made in 2005 to switch most households to energy-saving light bulbs and to introduce more energy-efficient domestic appliances. Additionally, during 2005, a major increase in electricity tariffs was announced. These increases are on a sliding scale with prices rising sharply for households with high consumption. (In the first quarter electricity consumption is reported to have declined by 2.5%)
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