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High Voltage: Cuba Gets Megabuck Investment in Renewable Energy

High Voltage: Cuba Gets Megabuck Investment in Renewable Energy

Posted by Miguel Ernesto on September 06, 2016

The first Cuba Energy Investment Summit, held at Meliá Cohíba Hotel in Havana, gathered entrepreneurs from 14 countries and the main outcome was the megabuck investment announced by Spanish Gamesa, aimed at building seven wind farms at the island nation’s eastern region.

These seven wind farms will be delivering 750 megawatts, thus complementing the existing four, as part of the Cuban strategy to decrease the reliance on the energy produced by using fossil fuels, especially in a context of uncertainty in terms of Venezuela’s political future, since it’s main exporter to the island.

Cuba’s energy system mainly depends on oil. The country produces four million tons of oil and gas every year, which are used to generate electricity, but this figure barely represents 50 percent of the national consumption. The other 50 percent depends on imported oil, which comes from Caracas with preferential prices. Everybody knows that the cancelation of such agreement would be one of the consequences of a political turn in Venezuela.

CUBA’S POTENTIAL

The director of Renewable Energy at Cuba’s Ministry of Energy and Mining, Rosell Guerra, underscored during the Summit that Cuba has great potential in terms of renewable energy sources, especially sun energy, since the country receives high radiation levels throughout the year, thus favoring the implementation of photovoltaic and thermal technologies.

Moreover, Cuba’s cane production makes possible the use of bagasse as fuel, complemented with the development of forest biomass and waste materials from agriculture.

Mr. Guerra also highlighted the significant eolian potential in the country, especially at the eastern region, as well as the growing use of technologies to obtain biogas out of animal excrement.

“After having identified these elements, our investment possibilities are huge; therefore, over the next years we look forward to installing more than 2,100 megawatts in terms of renewable energy technologies, which includes 755 MW in bioelectrical plants fueled by cane biomass, 700 MW in photovoltaic solar parks and 633 MW in wind farms, thus backing up the modification in the power production,” Mr. Guerra explained.

Cuba’s electrification level is 99.2 percent, but nearly 98 percent is supplied by the national electro energetic system and the rest depends on renewable energy sources, especially in mountains, where photovoltaic solar panels are used.

GAMESA GETS INTO THE GAME

Within the framework of the thaw between Washington and Havana, and with a new Foreign Investment Law implemented by Raul Castro’s administration since March 2014, several Spanish companies related to the energy sector have been interested reaching out to the Cuban market.

Gamesa, Acciona and Gas Natural were among the first group to approach the island nation. "Spain holds a competitive position in Cuba –it’s the third country with the highest presence on the island – and it has to work to enhance its presence considering the growing interest shown by other countries", Modesto Piñeiro, deputy president of Spain’s Chamber of Commerce and chairman of the Bilateral Business Committee, said.

Among all of them, Gamesa talked the Cuban authorities into working with it. This company is going to supply cutting-edge technology to install the seven wind farms. According to its representative at the Summit, Manuel Garmendia, G114 turbines will be installed with a power of 2,500 kilowatts each, placed at 93 metros above ground level.

The installation of wind farms aims at reducing both pollution and energy-related expenses; moreover, they help fulfill a portion of the power generation in Cuba, the director of Renewable Sources from Electricity Engineering and Projects Company (INEL is the Spanish), Andres Espino, pointed out.

The investments in the renewable energy sector will keep on coming, since another wind farm-related projects, 5 - 10 megawatts, have been put out to tender. These investments would be located at the western region of the island, Angel Delgado, executive at Cuban Unión Eléctrica, announced.

Cuba’s bet on renewable energies is so significant that the authorities are looking forward to having 24 percent of energy produced by clean sources in 2030. The authorities need to add 2.1 gigawatts of capacity obtained from biomass plants, wind farms, solar projects and hydroelectric generators. In order to carry out this reconversion, which is worth over three million dollars, the country needs foreign investment, since only 4 percent can be presently obtained from alternative sources and cane biomass nearly represents 90 % out of percent, thus showing poor diversification such sources.

The Havana Summit was sponsored by IJ Global, the infrastructure division of Euromoney Institutional Investor PLC and New Energy Events LLC.

Cuba is still far from other Latin American countries in terms of the use of renewable energy sources, but with a growing presence of foreign capital in this sector, paired with the high educational and scientific qualification level of its specialists, everything seems to be ready for the country to take a significant jump. 

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