The news that the United States will extend normal diplomatic relations with Cuba can be viewed as the last act of the Cold War. With the promise of cooperation on both sides, U.S. businesses will view the island nation as a new market for consumer and industrial goods as well as infrastructure spending. Fortunately, Cuba has the potential to develop into an energy efficient country – if it can act deliberately.
Cuba opened its first 2.6 MW solar farm in 2013, with plans to develop six more, according to the U.S. Energy Information Administration. Cuba also has plans to develop wind projects totaling 280 MW. Today, 4.3% of its power comes from renewable resources. Still, Cuba relies heavily on imported oil from a precarious source, Venezuela, which supplies two-thirds of Cuba’s petroleum. According to some reports, Venezuela was poised for oil price increases before the global drop. Now Cuba may want to buy oil from other sources in the region at low prices, disincentivizing clean energy investment in the near term. At the same time, Cuba will have access to new low-carbon sources, following its own Article 81 in its Law 33, or general environmental policy, that encourages renewable resources that have minimal impact on the environment.
Cuba is also a member of the Organization of American States, which just announced support for the COP20 lowered emissions goals for all countries. With an awareness of climate change impacts and adaptation choices, it is bound to be torn between the cheap oil and development funds it now has access to and the regulations and low-carbon goals it supports.
Navigant Research’s report, Global Building Stock Database, forecast a flat growth rate for Cuba’s commercial and residential space, but that will surely change. With more tourists and new commercial prospects flooding into the country, the demand for first-world quality residential and commercial space will rise. The energy intensity of that space will likely be greater than the current building stock, resulting in an acceleration of energy demand. There are a few strategies that can be employed that will help tamper the accelerated demand for power.
One landmark goal would be to make all new development net zero energy. As described in Navigant Research’s report, Zero Energy Buildings, net zero implies that a building produces as much energy as it uses over the course of a year. A strong government like Cuba could initiate strict building codes, following similar goals instituted in California, as there is a legacy of energy efficiency policy implementation in the country. In 2005, Castro called for a “revolución energética,” resulting in the replacement of all incandescent light bulbs to CFLs and the replacement of over 2.5 million refrigerators. Given the available solar resource and some wind resource, new hotels and business districts can leave room for installing renewables. Again, there is a precedent here. Over 2,300 schools have been equipped with solar since 2001, and the energy revolution provided some financing for residential PV. Building codes can also require the most efficient building possible.
A major challenge, however, will be in retrofitting the existing building stock. Renowned for its decaying beauty, the frozen-in-time architecture of Havana is a challenge for energy efficiency retrofits. Maintenance and upgrades have been minimal over the past half-century, and the island’s humidity and heat are intense. It’s hard to envision the building envelope being retrofitted to a highly efficient level. However, the appliances within them could be ungraded easily as part of the revolución energética.
Cuba recently announced 246 projects , worth over $8 billion for technology and industrial jobs, focused on renewable energy development and manufacturing of air conditioners, for instance. Cuba is now at a crossroads and has the potential to choose the green/clean path forward.
Tags: Energy Efficient Buildings, Finance & Investing, Latin America, Policy & Regulation, Renewable Energy, Smart Buildings Program
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