The Cuban energy revolution

The Cuban energy revolution

By Dieter Seifried

In October 2012, Büro Ö-quadrat carried out his own project in Cuba to investigate the results of the Cuban energy revolution. For this, Dieter Seifried (Büro Ö-quadrat) spoke with various organizations and collected information on the spot. Even before the Cuban energy revolution, in the framework of the study financed by the BMU “Sustainable Energy Policy Concepts (2002)”, Dieter Seifried had proposed to the Cuban government to make a change in the refrigeration appliances. In another project in 2004, the Cuban government was offered to take over, in addition to the replacement of refrigerators, its financing through a contracting project. In this case, the cost of the high-efficiency refrigerators would have been offset by the savings made on crude oil imports.

The ignored energy revolution

1. Improving energy efficiency in homes and businesses by replacing inefficient appliances. At the same time, replacement of cooking equipment that used kerosene and liquefied gas with electric burners

2. Complement of large power plants with distributed plants and improvement of transmission and distribution networks

3. Development of renewable energies

4. Increase in exploration and production of own sources of fossil energy

5. Increase in international cooperation

6. Public awareness

Almost unnoticed by the public, but also by German energy experts, an energy revolution took place in Cuba that, in certain respects, goes further than the German energy transition. The abandonment of incandescent bulbs in favor of compact fluorescent lamps (CFLs) was also done 5 years earlier than in Germany and the European Union, and the conversion was global.

A surprising and fundamental change also took place: whereas previously the supply of electricity was based, in Cuba - as in all planned economy countries 1 - on large central power plants, during the energy revolution it was invested in decentralized power plants. This change cleared the way for further development of renewable energies, which within a centrally planned energy system had little chance of being implemented.

The motivation for this extensive renovation program was, in Cuba, much less the fight against climate change than technical and economic necessity: due to aging and poor maintenance of power plants and electrical networks, as well as the impact of two hurricanes In 2004 and 2005, there were power outages almost every day in a large part of the country. In 2005 alone, there were no less than 224 days with extensive blackouts lasting more than one hour, which paralyzed industry and households 2. With the energy revolution, power outages caused by lack of generation capacity could be avoided by completed in 2007.

The transformations on the technical level were supported by accompanying measures that could also be interesting for Germany and other countries: inefficient household appliances were replaced by more efficient equipment, and in parallel electricity rates were adjusted within a progressive tariff structure so that the large consumers have to pay much more. In addition, the purchase of efficient electrical appliances has been supported through so-called social loans. Social loans because their conditions, such as the interest rate and the repayment term, were adjusted to the income and the payment capacity of the households.

The Cuban energy revolution can be characterized by six main components (see page 2). The following presentation concentrates on the first two components. The other points are only mentioned and developed as deemed necessary for an understanding of the process as a whole.

The following report is based on an analysis of the Büro Ö-quadrat. For data acquisition, Dieter Seifried conducted interviews with various people and organizations on site.

Replacement of inefficient appliances

The Cuban energy revolution began in July 2005 with an extensive light bulb replacement program. In less than a year, social workers and student volunteers succeeded in replacing more than nine million incandescent bulbs in homes with compact fluorescent lamps (energy saving bulbs). Assuming that in the 3.3 million Cuban homes two 60-watt bulbs per home are turned on for an average of three hours a day, an annual saving of 354 million kWh is calculated, which is equivalent to about 3 to 4% of the all electricity consumed in Cuba.

Since energy-saving bulbs have a lifespan around ten times that of incandescent bulbs, the investment cost for these energy-saving bulbs is less than the cost of ten times more incandescent bulbs. The social costs associated with the workload of social workers and students to exchange the bulbs are not taken into account here. It can be admitted, in a first approximation, that the exchange of light bulbs did not produce any additional cost for the national economy. Given that the variable costs of electricity generation in Cuba are, considering the current price of crude oil in the international market, of about 20 euro cents 5, about 71 million euros could be saved annually in electricity production costs, only thanks to the energy savings that this measure allows. This simple calculation does not take into account that energy savings also reduce losses in the networks, the impact on the environment of emissions from power plants and the costs caused by the extension of the energy park.

Currently, Cuba is considering replacing CFLs with LED lamps. Due to the longer service life of LEDs and the higher light output per watt, this energy saving measure is also worthwhile in economic terms.

In addition to the bulbs, the patched fans were also replaced by more efficient equipment. According to the Electric Union (UNE), the national energy provider, 1.04 million pieces of equipment were replaced. While 30 to 40 watts is sufficient for a reasonably efficient fan, many home-setup equipment required more than 100 watts to operate. If you consider a usage of 1,000 hours per year per household, the exchange allows an annual saving of approximately 60 million kilowatt-hours. The initial investment of around 10 million euros must be compared to an annual saving of around 12 million euros.

The biggest energy consumers in Cuban homes were outdated refrigerators. The average annual electricity consumption of a Cuban household was 1,668

Social credits in Cuba

In order to enable the purchase of efficient appliances, within the framework of the energy revolution, Cuban households had access to a credit program that was created specifically for this energy revolution, and which is characterized by the fact that the terms of the credit, such as the interest rate and repayment period were adjusted to the borrower's capacity.

Cubans have financed a total of 4.6 million items with a total value of 9 billion pesos through this credit program. The "Cuban Banking" has agreed to the following credit terms: For a monthly income of up to 225 Cuban pesos, an annual rate of 2% was offered with a repayment term of 10 years.

Conditions for the borrower become less favorable as their income rises (see Table 5). Starting with a monthly income of 1,801 CUP, no more credits were granted

The full report has 36 pages and can be downloaded in pdf format from the following link

Büro Ö-quadrat

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