On October 18, local time, the Cuban Ministry of Energy and Mines announced on its social media that its central thermal power plant in Matanzas Province malfunctioned at 11 a.m. that day, causing the national power system to be interrupted and a nationwide power outage occurred.
Although power supply has been restored to some parts of the capital Havana after the full efforts of the Cuban Electricity Union, most of Havana and many cities in Cuba are still in darkness. On October 20, Hurricane Oscar made landfall near the eastern coastal city of Baracoa, triggering heavy rains and floods, which had another impact on the already fragile power supply.
"I recognize that Cuba is experiencing an energy emergency," President Miguel Díaz-Canel said at a crisis meeting broadcast on state television on Friday evening, in what is reported to be the longest power outage in three decades.
As a lower-middle-income country in Latin America and the Caribbean, Cuba's economic growth is extremely unstable. According to a report by the Economic Commission for Latin America and the Caribbean (CEPAL), Cuba's economic growth rate is expected to be 1.5% in 2024, which is at a low level in Latin America.
Energy shortage is one of the important factors restricting Cuba's economic development. About 70% of Cuba's electricity production capacity comes from large and small thermal power plants that burn imported oil. Since Cuba only produces 50% of its own crude oil, it must buy the rest from the international market. However, due to US sanctions, it is difficult for Cuba to buy crude oil on the international market.
Although Cuba's power grid has covered more than 98.5% of residential areas, power shortages and frequent power outages often occur in some areas due to the aging of power grid equipment and high energy consumption.
In recent years, the Cuban government has also begun to seek diversified energy sources, including the development and utilization of renewable energy, and plans to improve the flexibility and stability of the power system by introducing energy storage technology. Previously, the Cuban Ministry of Energy and Mines announced that by 2024, Cuba plans to increase the proportion of non-traditional renewable energy to 20% of total energy consumption. However, the specific energy storage policy planning and implementation details have not yet been announced.
Currently in Cuba, the application of energy storage technology is mainly concentrated in some off-grid power generation systems and renewable energy demonstration projects. The overall research and development and commercialization process are relatively slow, and a large-scale market has not yet been formed.
In this regard, industry insiders analyzed that after this large-scale power outage, the demand for solar energy storage systems among ordinary Cuban residents will be further opened up. However, due to the overall low level of economic development, the price sensitivity of local residents to energy storage systems should be similar to that of Southeast Asian and West African markets.
Before the government introduces more powerful support policies, large-scale, high-quality photovoltaic storage system products will find it difficult to gain popularity in Cuba, while cheaper and simpler distributed photovoltaic storage systems may win important development opportunities.
At the same time, there is also a view that compared with the high profits in the European and American markets and the growth potential in the Southeast Asian and African markets, the demand volume of the Cuban solar energy storage market is not "attractive" enough, and affected by economic sanctions and resource restrictions, some leading energy storage companies may believe that its market potential is limited, and therefore tend to ignore this market.
For mid-sized enterprises with overseas advantages, the Cuban market may be an opportunity worth paying attention to. These enterprises can use their own technological and cost advantages to develop rapidly in the Cuban market.