Cuba seeks more electricity supply from Turkish powerships
31/08/2022 12:00
By Marc Frank
HAVANA, Aug 31 (Reuters) - Cuba, mired in an energy crisis
that has brought frequent blackouts, is negotiating with a
Turkish company to have it double the megawatts it currently
produces for the country from shipboard generators just
offshore, according to two people with knowledge of the
discussions.
Cuban officials are in talks with Karpowership, one of the
world’s largest operators of floating power plants and part of
the Turkey-based Karadeniz Holding, the sources said. The
company already has five ships operating off Cuba with a
capacity of around 250 megawatts (MW).
The Communist-run country needs to generate more than 3,000
MW to meet minimum demand and currently is producing between
2,000 MW and 2,500 MW.
The Cuban National Electric Union did not respond to a
request for comment. Karadeniz declined to comment.
The sources, who asked not to be identified due to the
sensitivity of the negotiations, said the talks centered on how
to ensure lease payments from Cuba.
"The (U.S. trade) embargo makes Western financial
transactions very difficult and Cuba is cash short and behind on
payments with many suppliers and joint venture partners,” one
source said.
Experts say the Turkish company would need to add to its
fleet off Cuba to produce the required amount of energy.
Powerships carry their own generator fueled by oil or gas,
anchor close to land and connect to the local electricity grid.
They are leased by the host country.
The deal, if it moves forward, would provide quick and
much-needed relief for the embattled Cuban government as power
outages have spread across the island and increased in length.
Cuba is desperate for more electricity.
The energy crisis, with blackouts in 4 to 6-hour-blocks
twice daily or more in most of the country, is perhaps the most
painful symptom of a deeper financial crisis caused by external
factors such as U.S. sanctions, the COVID-19 pandemic and poor
economic management.
Cubans are also living through food, medicine and fuel
shortages, forcing them to wait in long lines for the basics.
There have been scattered, small protests this summer and
U.S. authorities registered a record of more than 175,000 Cubans
at the U.S.-Mexican border since October, according to U.S.
Customs and Border Protection agency statistics.
Cuban power plants are obsolete, averaging 35 years of age,
with a backup system of hundreds of smaller generators at least
15 years old. Just 5% of power comes from alternative energy
sources.
The government blames lack of funds for its inability to
update its decrepit grid, and says breakdowns, not fuel
shortages, are the main cause of blackouts.
Energy and Mining Minister Livan Arronte Cruz said last week
that the country hoped to all but eliminate blackouts by the end
of the year, in part by adding “531 megawatts to generating
capacity through new investments,” a figure reduced to 450 MW by
President Miguel Diaz-Canel at the weekend.
Omar Ramirez Mendoza, deputy director of the state
electricity monopoly, said on state-run TV that “240 MW {of the
450 MW} will come from mobile generation,” a euphemism used by
officials to refer to the powerships and coinciding with the
source accounts.
The remainder of the new capacity would come from upgrading
existing facilities with the help of foreign partners in the Moa
nickel region in eastern Cuba and at the Mariel Special
Development Zone just west of Havana, Ramirez said.
Jorge Pinon, Senior Research Fellow at The University of
Texas at Austin’s Energy Institute specializing in the Latin
American region, said he believed the powerships would provide
the "mobile generation" referred to by Ramirez, but wondered how
the extra capacity would be financed “as the Cubans do not have
any money.”
(Reporting by Marc Frank, additional reporting by Can Sezer in
Istanbul, Editing by Dave Sherwood and Alistair Bell)
((marc.frank@thomsonreuters.com; +537-833-3145; Reuters
Messaging: marc.frank.thomsonreuters.com@reuters.net))