ENERGY-CUBA:
A Light at the End of the Tunnel
By Patricia Grogg

HAVANA,  (IPS) - The government announcement that electricity supplies in Cuba now exceed demand during the hours of peak consumption was received with a collective sigh of relief by Cubans, who have not forgotten the frequent and lengthy blackouts that occurred, especially during the summertime, two or three years ago.

"I don't even want to think of vacations like the ones we had in 2004, when the power outages began again," said Caridad Hernández, who has two school-age children. She was talking about the severe energy crisis triggered by breakdowns in the Guiteras thermoelectric plant in the western part of the country, the main power plant.

Blackouts have a heavy impact on families. "If there is no power, we don't have water either, because the pumps are electric. And when the outages are lengthy, there is no gas here either. Add to all of that the hot temperatures of July and August," said Hernández.

Fans are a necessity, not a luxury item, during Cuba's hot summer months, when power outages also make preserving food a major challenge.

But this summer, power cuts will not be a major problem for the Hernández's, except for the sporadic outages caused by the ongoing efforts to upgrade the power grid, which lead to occasional interruptions in services.

That work will continue until next year, and the inconveniences will gradually diminish, Vice President Carlos Lage said Wednesday at the start of operations of two gas-fired power generating plants in Boca de Jaruco, 40 km east of the capital.

The plants belong to Energas S.A, a joint venture set up between the Cuban state-owned companies Cupet (Cuba Petróleos) and Unión Eléctrica and the Canadian corporation Sherritt International to foment and make use of technologies capable of cleaning and processing natural gas.

Besides the environmental benefits obtained from converting into energy a subproduct of the oil industry that used to be burnt or "flared", a wasteful practice that causes air pollution and emits greenhouse gases, the installed capacity from natural gas has climbed to 395 megawatts in Energas and to 495 megawatts nationwide.

Lage noted that this total is larger than the 440 megawatts to be generated by the country's first nuclear reactor in Cienfuegos, 230 kilometres southeast of Havana. Construction of the unfinished power plant, known as Juragua, came to a halt with the 1991 collapse of the Soviet Union, which was providing assistance for building the reactor.

The vice president said the energy generated by the natural gas and oil-fired thermoelectric plants, along with the small diesel-powered generators operating around the country, have brought the installed capacity to 3,400 megawatts, nearly 20 percent higher than peak demand, estimated at 2,500 megawatts.

"And the outlook is positive, because we are going to continue installing new power plants, and we are seeing a tendency towards a reduction in peak demand and consumption, as a result of energy saving measures," said Lage.

In 2004, the breakdown of the Guiteras plant in the western province of Matanzas, 87 kilometres from Havana, considered the country's most efficient power plant, revealed the fragility of the national electrical power generating system, due to the deterioration of the majority of thermoelectric plants.

That year's power outages recalled the worst moments of the crisis of the 1990s, when the cutoff of the annual supplies of 13 million tons of oil from the now-defunct Soviet Union cut energy output in half.

The crisis, which lasted through 2005, forced the government to temporarily close down a large number of factories and adopt strict energy saving measures, as part of a strategy that included the replacement of high energy consumption equipment with more modern equipment, such as the replacement of incandescent light bulbs with fluorescent bulbs.

The government also decided to make enormous investments in the purchase and installation of thousands of small diesel-powered generators, which the authorities considered to be more efficient and safer than the "obsolete" thermoelectric plants, most of which were inherited from the Soviet era.

>From late 2005, when the generators were installed, to September 2006, they achieved a capacity of more than 1,000 megawatts -- three times the installed capacity of the Guiteras plant, which took over seven years to build.

Cuba hopes to diversify its energy options by developing renewable sources. But for now it basically continues to depend on oil, over half of which is imported from Venezuela, which supplies this Caribbean island nation with 98,000 barrels a day of crude.

According to official data from early this year, domestic output currently stands at 65,000 barrels a day of mainly heavy oil laden with sulphur, and 20,000 barrels of gas.

The oil and gas are extracted from a 128-kilometre-long strip of coast in the provinces of Havana and Matanzas, and most of the wells are drilled vertically from the shore to between two and seven kilometres out to sea.

Oil and gas production is expected to increase this year with the drilling of 39 new wells, 13 by Cuban state companies and 26 in joint ventures with foreign firms, including Sherritt International.

Besides its investment in Cuba's nickel industry, Sherritt has agreements to explore for oil offshore, in Cuba's exclusive economic zone in the Gulf of Mexico, as do Vietnam's state-owned Petrovietnam, Malaysia's Petronas and Petróleos de Venezuela (PDVSA).

The first to be granted concessions by the Cuban state to search for oil in deep water was the Spanish-Argentine Repsol YPF, which was later joined by India's ONGC Videsh and Norsk Hydro of Norway. They plan to begin drilling in 2008. (