Sunrise After the Blockade

Executive Summary

Cuba is in the midst of an energy and humanitarian crisis. Long dependent on expensive, imported fossil fuels for electricity generation, Cuba has now seen its supply choked off by the US. The results are predictable: extended blackouts, hospitals without power, food and medicines spoiling, economic distress and avoidable deaths. ¹

This crisis is not of Cuba’s making. It is the result of an externally imposed energy blockade under which the flow of oil and other fuel is severely restricted and subject to outside control — by the United States. It forms part of the US government’s “energy dominance” strategy, which uses coercion and force to control energy supplies and in this case, ultimately, Cuba itself. ² After the US enacted a similar blockade on Venezuela in mid-December 2025, oil shipments from Venezuela to Cuba ceased and some cargoes en route were intercepted. ³ Cuba was heavily dependent on discounted oil from Venezuela, and this disruption destabilised its energy system. In late January 2026, the US government announced a complete energy blockade of Cuba and threatened retaliatory tariffs on any country providing oil to Cuba without US permission. ⁴ Shipments of oil and other fuel from any source were reduced to a trickle. ⁵

Cuba’s electricity and fuel crisis is a humanitarian emergency, but it is also a stark demonstration of the risks of dependence on imported fossil fuels for countries facing external coercion. Expanding renewable energy offers a path out of the crisis and away from that dependence. Using a cost-optimisation energy model (which finds the cheapest combination of generation and storage technologies to meet electricity demand), this briefing evaluates a range of investment pathways for moving Cuba towards a 100 per cent renewable electricity system. It argues that development finance institutions should fund this transition on concessional terms — more generous terms than markets would provide — because it is technically feasible, economically compelling and a concrete test of the international community’s commitment to climate justice and energy sovereignty. ⁶

The following analysis explains how the US has made fossil fuel dependence into a lever of coercion, why Cuba is well-placed to respond, what the economics of a renewable transition now look like and why concessional public finance is appropriate to deliver it.

Key Findings

• Cuba’s dependence on imported fossil fuels has made it highly vulnerable to US coercion. The current crisis shows how this dependence creates an external lever that can be used to destabilise the electricity system and produce social and economic devastation.
• A rapid renewable electricity transition in Cuba is technically feasible and more cost-effective than continued investment in fossil fuel capacity in part because costs for key technologies have dropped dramatically. Even relatively modest investment would sharply raise renewable generation, cut operating costs and reduce exposure to imported fuel. Higher investment has an additional benefit: it cuts fuel costs dramatically, locking in more savings, even if prices fall.
• This analysis identifies two decisive thresholds. At around $8 billion, Cuba would reach 93 per cent renewable electricity generation and no longer need to import fossil fuels for electricity generation. At around $19 billion, Cuba would achieve a fully renewable power system. Smaller investments still deliver major gains (see Figure 1).
• Solar and battery systems should be central to every stage of the transition. Cuba’s strong solar resources, recent deployment experience and rapidly falling technology costs mean solar-backed electrification can begin reducing fossil fuel dependence immediately. Storage strengthens resilience and supports higher renewable penetration over time. In this model, other technologies play large roles in some intermediate scenarios, but the broader strategic direction still points towards a system dominated by solar and, to a lesser extent, wind.
• Investment in Cuba’s electricity system would be an act of climate justice, a form of development policy and a strategic investment in energy sovereignty. It would yield outsized economic and social returns, while providing a model for the Caribbean and economies that rely on imported fossil fuels for electricity generation.

How Fossil Fuels Became a Lever of US Coercion

The energy blockade is not the first US attempt to isolate Cuba. For decades, the US has imposed an embargo that severely limits Cuba’s trade with foreign entities. ⁷ Economy-wide sanctions and secondary sanctions regimes deter foreign firms by exposing them to legal and financial penalties, as well as the risk of losing access to the US financial system or market. This often leads to widespread over-compliance. ⁸ These tactics have widely been condemned as illegal under international law and as a form of collective punishment, given the toll they take on the Cuban people and economy. ⁹ A 2018 United Nations estimate put the economic damage of the embargo to Cuba at $130 billion, though some estimates are considerably higher. The losses to the US itself are also thought to run into the billions annually. ¹⁰ For example, the embargo has devastated Cuba’s health system by severely restricting access to medicines, medical equipment and life-saving technologies, with especially harsh effects on children and other vulnerable groups. ¹¹

The US government’s energy blockade is an escalation and an act of war on Cuba. ¹² It is a more direct and indiscriminate form of the coercion Cuba has long faced for pursuing a social and economic model the US seeks to overturn. ¹³ Cutting off imported fuel intensifies suffering immediately: it disrupts hospitals, water systems, refrigeration, transport and other essential infrastructure, turning economic coercion into an acute energy, economic and humanitarian crisis. Although in February 2026 the US Supreme Court invalidated the commonly used legal basis for retaliatory tariffs, including on countries supplying oil to Cuba, those countries still face US sanctions and other forms of coercion. These include the interception and seizure of ships, for which no legal justification has been provided. ¹⁴

The US is employing other strategies as well. It is investigating Cuban officials for alleged violations of US law, seeking to prosecute them in US courts under Washington’s authority. ¹⁵ The US has also coerced countries to end their participation in Cuba’s doctors abroad programme, a vital source of hard currency needed for trade, undermining a system that gives dozens of recipient countries access to low-cost medical care. ¹⁶ These are attempts to isolate Cuba, to put pressure on Cuban leaders through the immiseration of the civilian population and to destroy the Cuban economy.

By its own rhetoric, there is little ambiguity about the US government’s intentions, nor do US officials appear concerned about the legality or humanitarian consequences of their policy. ¹⁷ The objective is clear: a government aligned with Washington’s political objectives. ¹⁸ Washington is demanding that President Miguel Díaz-Canel resign and seeking compliant Cuban leaders who would accept political subordination. The US government is also reportedly lining up wealthy Republican donors for roles in a potential US-controlled government. ¹⁹ These are transparent efforts to cultivate constituencies in and outside Cuba that oppose the government and prepare the ground for a US takeover. ²⁰ To that end, while starving the island of fuel, the US government is also positioning itself as arbiter of who receives it and attempting to privatise the energy sector, so that Cuba becomes newly dependent on US fuel. ²¹ With Washington’s permission, US suppliers can bypass the blockade to provide fuel to private enterprises but not to hospitals or other critical civilian infrastructure, shifting control away from the Cuban public sector. ²²

Cracks have begun to show in Washington’s energy dominance strategy following the start of the illegal US–Israeli war on Iran in February 2026. ²³ Seeking to stabilise oil prices, the White House issued temporary waivers on fuel from Russia and even Iran itself. ²⁴ It was in that context that a Russian oil tanker was permitted to deliver its cargo to Cuba, with Trump saying he had “no problem” with the shipment. ²⁵ This moment may therefore present an opportunity to break Cuba’s dependence on imported fossil fuels through investment focused on renewables. Cuba is not starting from nothing; it has resources, experience and a foundation from which to respond.

Cuba’s Green Foundations

Cuba’s electricity system has historically relied on oil-fired thermal plants supplemented by smaller amounts of domestic natural gas, hydropower and, more recently, solar. ²⁶ Its government has long recognised the vulnerabilities created by reliance on this ageing system and imported fuel. Its 2025 National Strategy for Energy Transition in Cuba aims for 100 per cent renewable energy by 2050, with intermediate targets along the way. ²⁷ A 2024 study found that a 100 per cent renewable electricity grid would require investment of $25.8 billion. It also found that increasing the share of electricity generation from renewables would lower the cost of electricity relative to continued reliance on fossil fuels. ²⁸ As the costs of renewable technologies continue to fall, renewable electricity is likely to play a much larger role in Cuba’s transition, and sooner than expected.

Cuba also has a strong base from which to accelerate its energy transition: a national transition plan, an active solar and battery buildout, falling technology costs and strong solar potential. Over the last year, Cuba has brought more than 1,000 megawatts of solar online with Chinese imports, assistance and financing with roughly the same amount planned for the coming years. ²⁹ This buildout has been described by experts as one of the most rapid solar expansions in the world. ³⁰ The current solar deployment, and the wider transformation it could support, point towards greater energy sovereignty, since the sun cannot be blockaded.

Under any scenario, however, an energy transition in Cuba will require broader economic and social transformation, especially under newly intensified external constraints. Cuba has done this before. The end of Soviet support in the 1990s forced a rapid shift in agriculture towards agroecology and greater food self-sufficiency, a process now widely studied as a model of economic resilience. ³¹

A Renewable Electricity System Is Affordable and Within Reach

Steep declines in solar and battery costs have changed the economics of the transition

Cuba’s strong solar potential has long posed a familiar challenge: how to balance a renewable electricity system when demand peaks in the evening and solar output falls. Recent advances in battery technology have made that constraint much less binding. Batteries are now cheaper and more efficient, allowing daytime electricity to be stored and used more effectively at night. ³²

At the same time, the economics of solar have entered a new phase. Solar has already been cheaper than fossil fuel power on a lifetime basis in some contexts for at least a decade, but upfront costs have long remained a barrier. ³³ That barrier is now weakening: solar is becoming competitive on upfront cost as well, while retaining vastly lower operating costs because it does not require fuel. Estimates vary, but even conservative readings point to steep declines for key technologies. Solar and wind costs have fallen by well over 30 per cent over the past five years. ³⁴ Battery costs have fallen by about 40 per cent over the past year and by roughly 20 per cent per year over the past decade. ³⁵

Together, these shifts make a renewable electricity transition in Cuba much more feasible, especially if fuel prices rise further. ³⁶ The case for renewable investment does not depend on the blockade continuing, however. While the blockade makes action more urgent, the economic fundamentals support a move to renewables in any case, particularly given wider vulnerabilities such as fossil fuel shocks. ³⁷

Two thresholds to energy sovereignty

Prior to the current crisis, electricity consumption reached approximately 19 terawatt-hours per year, a recent peak and the benchmark used in this analysis. ³⁸ Renewables account for a growing but still modest share of total generation. The remainder still depends on imported and domestic fossil fuels — the vulnerability at the centre of this briefing. ³⁹

This analysis uses a cost-optimisation model to estimate how much upfront renewable investment would be needed for a 100 per cent renewable electricity system, what $1 billion and $5 billion of investment would deliver and what level of investment would yield the lowest-cost electricity when investment is not capped. ⁴⁰

These renewable investment scenarios are compared with a no-blockade baseline scenario. It assumes no energy blockade, uses mid-March 2026 market prices for fossil fuels and accounts for recently installed and planned renewable generation, including significant solar additions. ⁴¹ This scenario is nevertheless optimistic because it assumes that all existing fossil fuel generation capacity is available and that fuel supplies are adequate. These assumptions significantly overstate current operational reality.

The results identify two distinct thresholds. At around $8 billion, Cuba achieves low-cost electricity and no longer needs imported fossil fuels for electricity generation. At around $19 billion, Cuba achieves a fully renewable electricity system. ⁴² The first threshold breaks the main external lever of US coercion; the second completes the electricity transition.

Table 1 summarises the main results. ⁴³ Several broader points emerge. Each investment level materially improves Cuba’s electricity system, but the gains are not linear. The renewable share of generation rises from 23.7 per cent in no-blockade baseline scenario to 39.2 per cent with $1 billion investment, 82.0 per cent with $5 billion, 93.4 per cent with $8.0 billion (the least-cost electricity scenario and the first threshold that prevents future coercion) and 100 per cent with $19.2 billion. ⁴⁴ Every pathway makes economic sense at current fuel prices and even more so if fuel prices rise. A $1 billion investment has the shortest simple payback period, from fuel savings and lower operating costs, versus the no-blockade at less than two years. ⁴⁵ The $5 billion and $8 billion scenarios pay back in roughly two to three years, and even the fully renewable system has a simple payback period of only seven years. Electricity is cheaper in every renewable investment scenario than in no-blockade baseline scenario. The cost per unit of energy falls from 14.3¢ per kilowatt-hour in the baseline scenario to 12.1¢ with $1 billion of investment, 7.3¢ with $5 billion and 6.5¢ with $8.0 billion. For the fully renewable case, it rises to 9.9¢ because the model overbuilds capacity to deal with periods of low solar and wind output.

These differences matter even more once fuel price risk is considered. This matters in particular because forecasts suggest fuel prices could remain elevated even if the war on Iran ends in the near term. ⁴⁶ A greater investment buys cheaper electricity and makes the investment more resilient to fuel price changes. The $1 billion scenario has the fastest payback at current prices, but it still depends on fossil fuels for 61 per cent of generation. If fuel prices fell 15 per cent, the simple payback period would rise from 1.7 to 5.3 years. ⁴⁷ If prices rose by 15 per cent, the payback period would fall to just one year (see Appendix Table 1). By contrast, higher investment pathways produce more persistent savings. For example, even if a 100 per cent renewable scenario were more expensive per kilowatt-hour than a no-blockade baseline scenario in a world with very cheap oil, the investment would still pay off because annual operating costs are much lower: there is no fuel bill. Thus, the more a country invests in renewables, the less its electricity costs depend on a volatile imported commodity and more savings is locked in by avoiding fuel costs.

In this model, the technology mix changes as investment rises (Tables 2 and 3). The $1 billion scenario is driven mainly by bioenergy; the $5 billion scenario relies heavily on bioenergy and wind. The least-cost scenario is solar-led with significant contributions from bioenergy and wind. Under this model, solar becomes the biggest source of generation and, along with batteries, receives the largest share of investment. In the 100 per cent renewable scenario, solar and batteries take on an even larger role, handling about 75 per cent of generation and receiving more than half of the investment.


Table 4 shows the additional generation and storage capacity needed for these scenarios. Importantly, the scenarios that end dependence on imported fuel rely on major additions of solar and battery capacity. While the total solar capacity needed to build a fully renewable system in Cuba is significant — over 14 gigawatts — it represents just four days’ worth of China’s annual solar manufacturing capacity and eight days’ worth of its actual output. ⁴⁸

Policy pathways and sequencing the transition

This points to a practical pathway for Cuba: first eliminate the vulnerability created by imported fuel, then build from that more secure position towards a fully renewable system. ⁴⁹ Renewables should be the focus of that process, with different technologies prioritised at each stage. In these scenarios, bioenergy and wind do more of the work at some intermediate stages, while solar and batteries become increasingly important as the system moves towards higher shares of renewable generation. Even so, solar and battery systems should be scaled throughout, with the exact mix shaped by costs, implementation constraints and the practical limits of domestic bioenergy.

These results are best read as indicative rather than predictive. The exact figures will change with technology costs, fuel prices, future demand and the practical constraints of implementation under embargo and blockade conditions. There are also good reasons to think some of these scenarios may be conservative. If solar, wind and battery technology costs averaged 30 per cent lower over the investment period, the estimated cost in a 100 per cent renewable scenario would drop from $19.2 billion to $14.9 billion, while the $8 billion scenario would fall to $6.5 billion (See Appendix Table 1). ⁵⁰ The model also builds in flexibility by assuming fossil fuel plants are maintained even if they are not regularly used. It also excludes demand-side management, which could shift some demand from evening peak hours to midday and modestly improve system economics. ⁵¹

A real electricity transition plan, however, would need to grapple with constraints that the model cannot fully resolve on its own. It would need to account for future demand growth, longer-term system change and the practical challenges of construction, maintenance, transport and spare parts under embargo conditions, even with sustained outside support. There are also genuine risks. Ageing infrastructure could reduce existing generation capacity, while a poor sugar cane harvest could limit fuel for bioenergy. ⁵² Recent energy projects have also revealed implementation problems. Delays in wind projects raise costs, and disappointing performance at one bioenergy plant may point to wider deployment problems. ⁵³ These constraints are themselves intensified by the embargo and the energy blockade. If the technical assistance, concessional finance and implementation capacity that supported Cuba’s recent solar rollout cannot be replicated for wind or bioenergy, costs could rise. ⁵⁴ Even so, these risks do not overturn the basic case for transition: if bioenergy proves more limited than expected, wind, solar and storage remain viable alternatives. ⁵⁵

Those constraints might require flexibility in sequencing, not postponing the transition. Existing fossil fuel capacity should be consolidated into more reliable backup as renewable generation expands. This matters in part because the analysis in this briefing targets a previous peak of electricity consumption and does not model future demand increases. If demand rises, domestic oil and gas could meet part of that need in the short term instead of imported fuel. Decentralised solar can also play a useful complementary role. More than 10,000 solar kits have already been deployed in Cuba. ⁵⁶ While they are not a substitute for grid electricity, they can provide backup power, some additional generation and greater resilience in moments of stress. ⁵⁷ The challenge is thus one of policy design: how to sequence investment so that near-term resilience and long-term decarbonisation reinforce one another.

The Case for Concessional Finance

With hospitals still losing power and preventable deaths mounting, the question of how to finance Cuba’s transition is not abstract. If the move to renewables is feasible and cheaper than continued fossil fuel dependence, the central question is how to finance it. The case for concessional finance rests on four overlapping grounds: the humanitarian emergency caused by the blockade, the economic merits of the transition, the need to restore energy sovereignty and the demands of climate justice.

Any of the investment pathways modelled here would be a strong candidate for concessional lending through development finance institutions. These pathways finance essential infrastructure, require significant upfront investment and would generate large social and economic returns over time. ⁵⁸ The case is especially compelling because renewable power offers lower operating costs over time and increasingly competitive upfront costs as well. It also avoids the fuel imports that make fossil fuel-based systems so expensive and vulnerable. Although the transition requires more upfront investment than continued fossil fuel dependence, those costs would be recovered relatively quickly through lower fuel imports and operating costs.

That case becomes even stronger if development partners help Cuba access equipment and technical support on better terms than those available in distressed or sanctions-constrained markets. Where financing for a renewable rollout remains expensive, the premium often reflects country risk, currency volatility and policy uncertainty more than the cost of renewable technology itself — constraints that concessional finance can substantially reduce. ⁵⁹ The result of the transition would be a cheaper, more secure electricity system and reduced reliance on imports and thus more economic policy space. By reducing the need for hard currency to pay for fuel imports, the transition would ease pressure to prioritise tourism and other hard-currency-earning sectors over domestic needs. It is also a matter of climate justice: Cuba is a low-emissions country, yet financing its transition would contribute to global decarbonisation while helping it escape a form of fossil fuel coercion.

Private or blended finance should not be a focus of Cuba’s electricity transition. Extensive private control of the power system would move the country further away from public control, energy democracy and sovereignty. ⁶⁰ Given the difficulty of mobilising private capital in less constrained contexts, and the urgency of Cuba’s humanitarian crisis, the better route is concessional finance aimed at restoring electricity access, reducing external vulnerability and preserving public ownership. ⁶¹ A public development financing model would reduce fuel imports and hard currency pressure, whereas private capital is neither likely to arrive at the necessary scale nor desirable as the basis for rebuilding the system, although it could play a minor role. ⁶²

Puerto Rico is a cautionary example for Cuba. The island is already under US rule, its electricity system is undergoing privatisation and it has abundant renewable potential. Yet it continues to suffer chronic outages and very high electricity prices that privatisation was supposed to solve. ⁶³ Since June 2021, Puerto Rico’s grid has been run by the consortium LUMA. In December 2025, the Puerto Rican government sued to terminate the contract, citing chronic outages, rising bills and slow reconstruction. ⁶⁴ In Puerto Rico, privatised electricity has not delivered reliability, affordability or a rapid shift to renewables, which suggests an externally managed and privatised reconstruction is a poor model for Cuba’s recovery. ⁶⁵

The legal landscape for supplying Cuba’s energy transition is more permissive than is often assumed, but sanctions risk and an opaque licensing process deter many actors exposed to the US financial system. ⁶⁶ This helps explain why China, which can more easily operate outside that system, has emerged as Cuba’s dominant partner in solar deployment. For other potential financiers, the issue is less formal legality than political willingness and risk tolerance. Blocking statutes — legislation that protects those conducting lawful trade — and multilateral channels, including those able to operate through alternative financial infrastructure and non-dollar currencies such as the renminbi, could partly address this problem. ⁶⁷ Cuba is a BRICS partner country and may be able to access financing through the associated New Development Bank; United Nations funds, like the Green Climate Fund, have already supported projects in Cuba and the European Union’s Global Gateway programme includes Cuba as a Caribbean partner. ⁶⁸ Any serious financing strategy will need to combine Chinese bilateral support with multilateral mechanisms that can reduce risk and expand investment.

Why This Matters Beyond Cuba

Cuba exemplifies a wider reality across the Caribbean and much of the Global South: dependence on imported fossil fuels creates chronic vulnerability, while falling renewable costs create a viable route out. Jamaica, Barbados and many other similar economies face the same dependence on imported fuel and the same broad opportunity to reduce it through renewable energy. If Cuba cannot make this shift despite the strength of the case for it, that would reveal how little the international system — especially countries that have committed to UN climate targets — is willing to help when fossil fuel dependence is deliberately weaponised.

Cuba’s case brings the politics of climate responsibility into sharp focus. Financing this transition should be understood as a form of reparative climate finance. There is a strong case that much of the cost should be borne by the Global North. ⁶⁹ Cuba sharpens that argument to an unusual degree: it is a low-emissions country whose fossil fuel dependence has been deliberately weaponised by the world’s largest historical emitter. The coercion it faces is a deliberate strategy to use energy as a tool of political control, not an abstract vulnerability. If the international community accepts this without a serious response, it sets a dangerous precedent. It would show both that fossil fuel dependence can be exploited to force political concessions from other countries, and that the global climate finance architecture has no answer when that happens. The annual United Nations climate summits — the Conferences of the Parties, or COPs — have increasingly acknowledged that those least responsible for the climate crisis often bear its greatest costs. The loss and damage framework advanced at COP27 and COP28 was intended to respond to precisely this kind of global inequality. ⁷⁰ Financing Cuba’s transition is therefore a concrete test of whether those commitments will be honoured in practice.

Beyond its direct economic benefits, investment in Cuba’s electricity system would demonstrate that a rapid shift to renewables is possible even under severe external constraints. An $8 billion investment would give Cuba the highest non-hydro renewable electricity share in the world and place it among the first countries to approach a near-complete electricity transition (see Table 5). ⁷¹ A 100 per cent renewable system in Cuba would nearly double installed renewable power capacity in Central America and the Caribbean. ⁷² Either scenario would make Cuba an outsized contributor to the COP28 goal of tripling global renewable energy capacity by 2030. ⁷³ These are extraordinary outcomes, giving Cuba unusual strategic significance as a test case for rapid renewable deployment.

It would also create jobs in Cuba, particularly in the installation and maintenance of solar and battery systems. Around half of all solar jobs are local, a much larger share than for wind, making solar especially valuable as a source of domestic employment. ⁷⁴ Much like Cuba’s medical missions abroad, a solar-heavy transformation could lay the foundation for a solar corps that could later export technical expertise across the region, with Cuban technicians helping install and maintain systems elsewhere. That would bring much-needed hard currency to the island while lowering costs for other countries in the Global South beginning their own transitions — a practical form of green internationalism. Over time, wider regional deployment could also support local supply chains for key components.

An International Response

The analysis above points to a clear practical conclusion: Cuba’s electricity transition is technically feasible and economically compelling, delivering it will require coordinated international action.

Recommendations

The price for external partners for this transition is modest when set against other recent costs or public expenditures. The 2022 energy shock cost the United Kingdom and the European Union about $1.8 trillion. ⁷⁵ A fully renewable electricity system for Cuba would be about one per cent of that figure. It is also less than seven per cent of the resources committed to Ukraine by the European Union, United Kingdom and Canada, and about eight per cent of global official development assistance disbursed in 2024. ⁷⁶

Supporting Cuba in diversifying its external partnerships and reducing its exposure to US coercion would have benefits well beyond the island itself. Strategies that resist US energy dominance and the wider tactics through which Washington exerts pressure would strengthen the policy space of other states. This is true in Europe, which still faces US threats over Greenland and vulnerability due to reliance on US liquefied natural gas, as well as the world more broadly, which faces US threats of a blockade in the Strait of Hormuz. ⁷⁷ China has already lowered the barriers to wider support by showing that renewable technologies can be delivered to Cuba at scale and at relatively low cost — a practical contribution to climate finance in its own right. ⁷⁸ Several other states, like Mexico and Türkiye, have shown a willingness to challenge the blockade. ⁷⁹

The technical and financial case for Cuba’s transition is clear. The remaining barrier is political will. More specifically, financing the transition is a test of whether multilateral commitments will be honoured when fossil fuel dependence has been weaponised by a powerful state. If those commitments are to mean anything, Cuba is a case in which they should be made real.

Acknowledgements

The author thanks Khem Rogaly, Chris Hayes, Amelia Horgan, Trisha Mendiratta and Bella Smith for feedback, and Lara Merling, Brian Dew, Ahmed Hafezi and Michael Galant for comments. Any errors or omissions are the author’s own.

Appendix

Full results

Methodological notes

Notes: This is an indicative analysis that builds on Maximilian Brandts, Paul Bertheau, David Rojas Plana, Katrin Lammers and Manuel Alejandro Rubio Rodriguez, “An energy system model-based approach to investigate cost-optimal technology mixes for the Cuban power system to meet national targets”, Energy, 2024, vol. 306, 132492. Key differences include: updated technology costs, different fuel price assumptions, the addition of budget-constrained scenarios and updated installed capacity figures. The analysis uses the Open Energy Modelling Framework (oemof) to find cost-optimal electricity generation mixes for Cuba. The hourly model optimises dispatch and investment across solar, onshore wind, bioelectricity, hydro, pumped hydro and battery storage, compared against no-blockade baseline fossil fuel scenarios. Installed and committed renewable capacity is credited. There is also some existing off-grid generation capacity that is excluded from the analysis. The model targets 19 terawatt-hours of end-use consumption which is a recent relative peak from before the current crisis. Low-cost scenarios reprice full-cost scenarios rather than re-optimising. This is conservative; the true cost reduction would likely be larger.

Assumptions: The weighted average cost of capital is 7.5 per cent, which factors into optimisation decisions. Technology costs reflect global benchmarks unless local costs are available. Fuel prices reflect world market prices in mid-March 2026 (crude oil at $100 per barrel, heavy fuel oil at $785 per metric ton, diesel at $4.23 per gallon) plus a 10 per cent delivery premium for imported fuels, which accounts for logistics and sanctions risk. For no-blockade baseline scenarios, transmission and distribution losses are assumed to be 16 per cent. For 100 per cent renewable scenarios, $2 billion in grid upgrades are assumed to reduce losses to 11 per cent; this may understate the full cost of grid modernisation. Domestically produced crude oil and gas is not distinguished from imported fuel in the cost optimisation. No-blockade baseline scenarios are optimistic; they assume all existing fossil fuel capacity is available and there is adequate fuel, which significantly overstates current operational reality.

Sources: Renewable technology costs are updated from “Renewable Power Generation Costs in 2024”, International Renewable Energy Agency, 2025. Available here; and Kostantsa Rangelova and Dave Jones, “How cheap is battery storage?”, Ember, 2025. Available here. Installed and committed capacity figures are cross-referenced with “IRENASTAT Online Data Query Tool”, International Renewable Energy Agency, [undated], Available here. Hourly solar and wind profiles are from renewables.ninja: Iain Staffell and Stefan Pfenninger, “Using bias-corrected reanalysis to simulate current and future wind power output”, Energy, 2016, vol. 114, pp. 1224–1239; and Stefan Pfenninger and Iain Staffell, “Long-term patterns of European PV output using 30 years of validated hourly reanalysis and satellite data”, Energy, 2016, vol. 114, pp. 1251–1265. The synthetic demand profile is synthesised from Jyrki Luukkanen, Anaely Saunders Vazquez, Jasmin Laitinen and Burkhard Auffermann, “Cuban energy futures: The transition towards a renewable energy system”, Finland Futures Research Centre, 2022. Available here. Hydro seasonality is based on Yalina Montecelos-Zamora, Tereza Cavazos, Thomas Kretzschmar, Enrique R. Vivoni, Gerald Corzo and Eugenio Molina-Navarro, “Hydrological Modeling of Climate Change Impacts in a Tropical River Basin: A Case Study of the Cauto River, Cuba”, Water, 2018, vol. 10(9), 1135. Pumped hydro costs are from Vilayanur Viswanathan, Kendall Mongird, Ryan Franks, Xiaolin Li, Vincent Sprenkle and Richard Baxter, “2022 Grid Energy Storage Technology Cost and Performance Assessment”, Pacific Northwest National Laboratory, 2022. Available here. Cuba electricity system data and generation statistics are from Oficina Nacional de Estadística e Información, “Anuario estadistico de Cuba 2024, Mineria y energia”, Oficina Nacional de Estadística e Información, 2025. Available here.