1. Objective
2. Development of Cuba's Energy Supply in the Last Decade
3. The Structure and Situation of the Cuban Power Industry

2. Development of Cuba's Energy Supply in the Last Decade

Since the beginning of the 1960s and up to 1990 Cuba's energy industry was influenced by the importation of cheap crude oil from the Soviet Union. By the end of the 1980s the Soviet Union delivered around 13 million tons of oil annually below the world market prices. Cuba was then able to resell around three million tons of oil per year on its own account (Hoffmann 2000). In return for the delivery of oil, Cuba delivered sugar, tobacco, coffee, and citrus fruits to the Soviet Union. Before 1989 Cuba received a trade of four tons of crude oil for only one ton of sugar.

After the Berlin wall fell in 1989 and the Soviet Union was dismantled in 1991 Cuba lost this advantageous bartering agreement. On the world market one ton of sugar cane was only worth about one ton of crude oil. Thus the importation of crude oil sunk from 13 million tons (1989) to 6 million tons in 1992. (Lippman et. al. 1997). Moreover Cuba could no longer make a profit from the export of the imported crude oil from the Soviet Union.

The Cuban industry was hit hard by this situation, which resulted in shortages of fuel, fertiliser and herbicides, as well as replacement parts for harvesting equipment and sugar mills. Compared to 1992 the sugar production dropped about fifty percent. The reduced importation lead to a decline in energy production, as the generation of power for the most part relies on oil-powered plants.

Today, Cuba's energy industry relies predominantly on fossil fuels. In the area of regenerative energy resources there is a high technical potential, which could at least partially be realised if the specific energy-economic conditions are met. The Cuban government recognizes the significance of regenerative energy resources and the rational use of energy for future energy systems, and supports these developments.