Cuba’s decrepit power grid and related energy crisis are shaping up to be an existential issue for the Havana regime. The structural problem behind recent power outages – severe fuel scarcity and dilapidated infrastructure – will prove extremely difficult to remedy and require outside support. This represents a strategic opportunity for whoever comes to Cuba’s aid and carries significant geostrategic implications for the Gulf of Mexico.
Widespread blackouts regularly plague the island. In mid-October, four power failures occurred in close succession, taking power away from most of the island. More recently, a failure at the major power plant in Matanzas this month plunged Havana back into the dark. The government’s general response has been to triage outages by reducing economic activity (i.e., consumption) and scrambling to restore electricity as quickly as possible to reassure the public.
When it comes to repairing and modernizing its electrical grid, Havana faces a steep uphill battle. Much of its existing infrastructure, including its thermal plants, was built directly or indirectly by the Soviet Union. Soviet assistance ended in the 1980s, meaning the youngest of Cuba’s generation centers are some 40 years old. The longstanding U.S. embargo complicated (and continues to complicate) any government efforts to import the materials needed to maintain and modernize electricity infrastructure. They also made it harder to import the fuel needed to power generation plants. As a result, Cuba resorted to using domestic crude, which had higher concentrations of sulfur and water than imported oil and damaged thermoelectric boilers and other equipment.
Local analysts conservatively estimate that fixing Cuba’s electricity grid will cost approximately $10 billion. That is money Havana does not have. Cuba’s economic conditions today are as bad as or worse than they were in 1993, its worst economic year on record. Though its economy has modestly rebounded since then, the past 30 years have been marked by one crisis after another – some endogenous, some exogenous. Its current economic crisis is a hangover from the COVID-19 pandemic. Travel restrictions decimated Cuba’s tourist industry, which caused U.S. dollars, necessary for importing vital goods, to dry up. Fuel shortages caused agriculture producers, electricity plants, industries, and households all to compete for slices of an increasingly smaller pie. Food shortages ensued, creating even greater social pressure on the government.
Cuba’s electricity problems undermine the Cuban economy and social stability. The country’s geostrategic position in the Caribbean means any major destabilization on the island has the potential to cause security and economic problems for the entire Gulf of Mexico and broader Caribbean. Alfred Thayer Mahan, the esteemed naval strategist, provided the framework for why Cuba holds geopolitical significance. He argued that the strategic value of a place is based on its proximity to operations (position), the defensibility of harbors and ports (military strength), and its ability to quickly secure supplies (resources). Cuba checks all three boxes. It sits along multiple sea lanes on which U.S., Mexican, and international commerce rely. It is located near the mouth of the Mississippi River, the launchpad of so many U.S. agricultural exports; near the city of Colon, where the Panama Canal terminates in the Caribbean Sea. Cuba is thus a critical component to maritime trade, Caribbean stability, and American prosperity. This is why Cuban stability plays such an outsized role in U.S. foreign policy.
When it comes to who could step in to aid Cuba in its long-term recovery, the list is relatively short. The main candidates have their own vested interest in Caribbean security and can be divided into two categories. First are those that have a close geographic proximity to the Caribbean – the U.S., Colombia, Mexico, and Venezuela. The second are those whose Caribbean interests are based on leveraging pressure against the U.S., namely Russia and China. Colombia’s government is preoccupied with an economic slowdown, declining government funds and controversial reforms. Venezuela, once a major oil supplier to Cuba, has been forced to drastically reduce its shipments by domestic political and economic issues.
For all its might, the U.S. remains politically constrained in terms of its ability to act in Cuba. Washington’s ultimate goal is to have the Castro regime replaced with a more U.S.-friendly government that would enable it to reclaim the influence it has lost there. Over the past few years, low-level talks with Havana have advanced, but fundamental differences have prevented any substantial changes. The one thing that could spur a change in the status quo is public unrest, which Washington would likely support. Protests in response to the blackouts have been reported, and broader social discontent is palpable. But all available reports suggest Cuban security forces have managed to keep any opposition in check. Moreover, Cuban citizens, now as always, tend to prefer to leave the country rather than to mobilize en masse. An estimated 850,000 Cubans entered the U.S. from 2022 to 2024 alone.
Mexico and Russia stand out as the most promising actors in the short term. Mexico uses “humanitarian aid” as pretext for providing oil and other goods to Cuba. In 2022, for example, it gave $700,000 worth of parts and equipment to Cuba’s thermoelectric plants. In response to the October outages, Mexico delivered 412,000 barrels of oil to Cuba. For its part, Moscow announced $65 million to help Cuba deal with its current energy crisis. The constraints preventing greater Russian involvement include the war in Ukraine, entanglement in the fall of Assad in Syria, and international sanctions. While nice gestures, none of these moves are large enough to change the status quo of Cuba’s electricity problems.
China remains limited in terms of its ability to help stabilize Cuba in the short term but may be more promising for longer-term transitions. Beijing’s pressing economic concerns – anticipated deflation and trade war with the U.S. – make adventurism in Cuba an unattractive move. China’s most concrete reaction to address Cuba’s immediate energy needs was Hangzhou Duojia Technology delivering solar panels and lithium batteries for small commercial projects.
That said, there is potential for future China-Cuba cooperation in renewable energy development. For over seven years, the two countries have been working to leverage Chinese know-how related to solar and hydro-powered projects to further develop Cuba’s renewable energy sources. Earlier this year, China installed solar parks in Cuba’s Villa Clara, Ciego de Ávila, and Holguín provinces. This was followed by Chinese pledges to construct 92 more solar parks in Cuba between now and 2028.
The bottom line is that Cuba’s need to overhaul its electrical grid opens the door for outside patrons. Revamping the island’s energy matrix will require a shift to renewable energy sources, particularly solar. Whoever ends up helping Cuba rebuild its power grid will hold one of the keys to unlocking economic recovery on the island and influence in the Caribbean.
Allison Fedirka is a Senior Fellow at Global Americans, Director of Analysis at Geopolitical Futures, and co-founder of Allonia Group.
Global Americans takes pride in serving as a platform that offers in-depth analyses on various political, economic, environmental, and foreign affairs issues in the Western Hemisphere. The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views of Global Americans or anyone associated with it, and publication by Global Americans does not constitute an endorsement of all or any part of the views expressed.
