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Cuba Negotiates with Karpowership

Cuba is going through an economic and energy crisis. To cope with this, it negotiates with Karpowership to increase energy production.

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Cuba, facing an already established energy crisis, negotiates with Karpowership. Talks with the floating power plant company are aimed at increasing production.

Cuba wants more capacity to deal with the crisis

Karpowership is part of Karadeniz Holding, a company based in Turkey. The company already has five vessels with a capacity of about 250 MW operating off the coast of Cuba. The country is asking the company to double the volumes generated for it off its coast. However, it would seem that an increase in the Turkish fleet would be necessary in order to meet Cuban demand.

In addition, the negotiations around the increase in the volume of electricity delivered by Karpowership revolve mainly around the guarantee of payment from Cuba. The latter is in the midst of a financial crisis and, short of cash, is behind in payments to several suppliers.

To date, Cuba produces between 2,000 and 2,500 MW but needs 3,000 MW to meet the minimum demand. In fact, the ruined country has to face very frequent power cuts. These are counted in 4 to 6 hour increments twice a day. This indicates an energy crisis in most of Cuba.

These blackouts are due to several factors but the most important is the obsolescence of the plants. These are on average 35 years old and have backup systems that are at least 15 years old. An inability to modernize the network is present. In fact, the country lacks considerably the means to carry out the necessary work.

A complex economic situation

Livan Arronte Cruz, Cuba’s Minister of Energy, said the government wants to eliminate power outages by the end of 2022. According to him, this would be possible by adding 531 MW to the generation capacity through investments.

Nevertheless, the situation seems more complex, according to Jorge Pinon, a researcher at the University of Texas Energy Institute. He says he questions how this additional capacity will be funded given the country’s economic conditions.

This economic situation applies to several areas other than energy. Many Cubans live in conditions where they lack food and medicine. In fact, the financial crisis underlies the energy crisis in Cuba.

The economy has been severely impacted by external factors such as US sanctions, the COVID-19 pandemic and general mismanagement.

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