Cuba’s electricity crisis has become a binding constraint on economic activity, household welfare, and the state’s capacity to deliver basic services. The deficit is no longer episodic; it is chronic, system-wide, and increasingly destabilizing—driven by the deterioration of conventional generation, recurring fuel shortages, and an energy transition that remains too small and too late.
The current electricity shortfall: a long-running crisis
Electricity generation peaked in 2019 and then entered a sustained contraction. During this period, output fell from 21,155 GWh in 2019 to 15,918 GWh in 2025—a decline of roughly 25%. The crisis intensified markedly from mid-2024 onward. Average shortfalls rose from around 570 MW in summer 2024 to 1,317 MW by the fourth quarter of 2024, coinciding with repeated nationwide system collapses. In 2025, daily deficits averaged roughly 1,531 MW, with peaks near 2,054 MW—approaching one-third of effective installed capacity.
The electric power system: proximate and structural causes of the crisis
The deficit reflects both immediate, material constraints and accumulated structural weaknesses. Conventional thermal generation, which provides baseload supply, has steadily degraded due to deferred maintenance, repeated forced outages, and lack of spare parts. Available capacity in large thermal plants fell from 2,548 MW in 2022 to 1,993 MW in 2024—a 22% decline. Distributed generation—diesel and fuel-oil engines—also declined from 2,265 MW to 1,920 MW over the same period.
Fuel scarcity has become pervasive and increasingly decisive. Shortages occur on the vast majority of days, and by summer 2025, fuel constraints were responsible for roughly 42% of disruptions. This vulnerability is reinforced by the generation mix: in 2024, about 76% of electricity production depended on oil-based fuels (more than half imported), while renewables contributed only 3.6%. Technical losses compound the scarcity further, with transmission and distribution losses exceeding 16%—roughly double typical international benchmarks.
The capture of Nicolás Maduro and the new reality facing Venezuelan authorities fundamentally alter Cuba’s outlook. Oil shipments are almost certain to be disrupted. Without alternative suppliers, the generation shortfall will widen.
Public policies and the government’s response: limits and critiques
Crisis management has relied heavily on rationing and emergency measures, with diminishing returns. Policies to suppress demand were repeatedly tightened, culminating in Decree 110, which mandates that large consumers—both state and private—cover 50% of their daytime demand with renewables within three years, subject to penalties. While conservation and self-generation can reduce daytime load, they do not substitute for firm capacity, grid stability, and reliable fuel supply.
On the supply side, emergency contracting—including floating power plants—provides rapid dispatchable capacity but can deepen dependence on costly, import-intensive solutions. Recent efforts to restore distributed generation and accelerate solar deployment can meaningfully raise daytime output but do not eliminate the binding constraints: baseload shortfalls, storage gaps, and weak transmission and distribution infrastructure.
Investment priorities and project management: domestic drivers
The persistence of the crisis is closely tied to investment allocation and execution failures. Imports of generation equipment surged during the mid-2000s buildout (Revolución Energética) but later declined sharply, especially after 2020. This occurred even as aggregate investment rose above 10% of GDP on average in 2019–2024 and became increasingly concentrated in tourism-related real estate rather than core infrastructure.
Project outcomes underscore these weaknesses. Payment arrears and ad hoc debt-service arrangements have complicated relationships with key partners, including generation assets under joint ventures. Several flagship projects have suffered multi-year delays or underperformance, including major wind and biomass initiatives. A prominent thermal-generation expansion credit was not activated due to failure to meet domestic co-financing requirements. This illustrates the central constraint: insufficient and poorly prioritized domestic resources, compounded by weak implementation capacity.
Options to shore up the power sector
Stabilizing supply requires a dual-track approach. In the near term, restoring thermal availability and distributed generation is unavoidable to rebuild firm capacity and reduce the frequency of collapses. This requires addressing maintenance backlogs, securing spare parts, restoring operational discipline, and developing a credible fuel procurement strategy. In parallel, renewables must be scaled rapidly—but in a way that matches system needs: grid upgrades, frequency control, and storage are prerequisites for integrating variable generation without worsening instability.
Demand-side measures can help at the margin, but they cannot carry the system without credible supply recovery. The sequencing matters: stabilizing the grid and securing firm capacity are necessary to ensure that new renewable additions translate into dependable service rather than incremental daytime relief.
An investment package anchored in publicly stated plans and verifiable benchmarks points to a minimum of about USD 6.6 billion (in 2024 dollars) for generation investments to close the supply gap—before accounting for substantial needs in transmission and distribution modernization, storage, and broader rehabilitation. This figure is indicative, but it clarifies the scale: incremental fixes and scattered projects are insufficient relative to the magnitude of capacity degradation and system losses.
The Political Economy of Power: Why Grid Modernization Requires Economic Transformation
Technical recovery depends on institutional and economic conditions that enable sustained investment and operational reliability. Without predictable payment mechanisms, credible contracts, disciplined allocation of foreign exchange, and a viable investment climate, generation assets will continue to deteriorate. Partners will remain reluctant or demand costly risk premiums.
A durable solution therefore requires aligning incentives across state entities, investors, and consumers: expanding the feasible role of non-state actors, restoring creditworthiness, and prioritizing infrastructure as a core development objective rather than an auxiliary sectoral concern.
Washington’s late February 2026 decision to ease fuel export restrictions to Cuba’s private sector—including possible re-export of Venezuelan oil under license—may alleviate certain shortages but is unlikely to significantly impact national electricity generation, as the private sector does not operate industrial-scale generation facilities.
