Cuba’s Scarce Electricity Hobbles the Few Industries Left
HAVANA TIMES – The last time the Cuban State press spoke about the Jose Marti Metallurgical Iron and Steel Company – popularly known as the Antillana de Acero – was in December 2023. At that time, Prime Minister Manuel Marrero was visiting the Steel mill of the gigantic complex that had been re-inaugurated seven months before. Thanks to over six years of investments and a Russian credit for US $160 million dollars, the plant was once again producing steel products on an industrial scale.
By 2024, its production plan had been set at 62,000 tons of billets, the raw material used to make corrugated bars or rebar for construction. This would be only the first step in the process of starting up the new plant, which at full capacity was expected to deliver some 226,000 tons of metal per year.
During 2023, official visits and press coverage were a constant at Antillana de Acero. Leaders and journalists vied with each other in optimism when talking about the future of this industry, located in the Havana municipality of El Cotorro. But when its name began to be heard less frequently on television and in government-affiliated digital media, and then disappeared altogether, speculation grew that things were not going as predicted. The numbers would eventually confirm this.
Specifically, when the National Office of Statistics and Information published their 2024 yearbook on Cuba, the chapter on manufacturing activity confirmed in black and white what many Cubans already sensed: the island’s metallurgical industry is going through its worst period in more than a century.
Last year, total carbon steel production barely reached 8,400 tons; of these, some 4,200 were used in the manufacture of billets, and 2,300 in the manufacture of corrugated steel bars. All three categories recorded significant declines compared to 2023 (between 64 and 85% lower). Further, if we compare these figures with the indicators from a decade ago, the conclusion is even worse: in 2014, the Antillana de Acero plant, plus Acinox, the plant in Las Tunas, produced 91% more carbon steel, 97% more billets and 98% more corrugated bars.
To get a better idea of the magnitude of the crisis, it should be noted that even at that time, the authorities insisted on the need to increase national metallurgical production still more, in order to meet domestic demand and maintain exports in the range of 40,000 to 50,000 tons per year.
In theory, it was foreign currency from export sales (mainly to Spain and Central America) that financed production for the Cuban market. In the mid-2010s, Cuba worked with companies such as Aceros Centro Caribe S.A. [Central Caribbean Steel Co], a company established in Honduras, to process Cuban billets and sell their derivatives in various countries of the isthmus. Ten years later, that business model is unthinkable, for the simple reason that Cuban steel mills are practically non-functional.
The outlook for the metallurgical industry in Cuba couldn’t be bleaker. Its collapse is due, first and foremost, to the electricity crisis facing the island. In its heyday, Antillana de Acero consumed between 350 and 400 megawatts per day, equivalent to the demand of municipalities such as Morón, Nuevitas, or Palma Soriano, or to 2% of the demand in Havana. Allocating that amount of electricity to it now would be unfair and tantamount to political suicide, in a context where most Cubans have been suffering blackouts of up to 20 hours a day for months.
“The population first”
Between 2014 and 2024, nearly all sectors of the island’s productive economy contracted. One of the most dramatic drops occurred in the electricity industry, which has reduced its generation by over 25% since 2020. In addition, there’s been a general deterioration in the power grids, resulting in increased losses in the transmission and distribution of electric power.
Less electricity available means greater restrictions on consumption. But these restrictions are not distributed equally. In an attempt to avoid a social explosion, the government long ago ordered that state industry, agriculture, and productive activities in general be the first to suffer cuts in their energy allocations. With this decision, it sought to minimize blackouts in the residential sector.
As a result, from 2020 to 2024, state electricity consumption fell by 17%, while private consumption fell by only 7.5%. The most drastic cuts have been suffered by industrial activity (35% less electricity for production) and agriculture and livestock (32% less, with a particular impact on irrigation and refrigeration). At the end of 2024, state electricity consumption accounted for 36.3% of national demand.
Since the beginning of this century, Cuba has been reducing the portion of national energy consumption being allotted to its productive economy controlled by the state. In the 2000s, the residential sector accounted for 40% – 45% of demand, similar to the Latin American average. In the 2010s, however, household consumption exceeded the 50% mark; and in the 2020s, that balance definitively shifted against the production and services sectors.
The economic slowdown also affects infrastructure management. The procedural rules of the Electric Union establish that in the event of contingencies due to technological or natural phenomena (system failures, hurricanes, etc.), recovery work should focus on primary circuits and those that supply residential areas. Only after these have been restored should attention be turned to industrial areas and other centers not directly linked to the population. In normal times, the allocation of resources is guided by the same principle of “the population first,” explained a specialist from the Camagüey electric company.
“We are not talking about affecting productive entities, but about mobilizing equipment that is not being utilized at this time,” said Yaniris Fernández Morera, director of the electric company’s base unit in the Camagüey municipality of Vertientes, at the beginning of August. Her statements were intended to justify the dismantling of transformers from rice mills and other economic centers to replace those damaged by several local storms in neighborhoods of the municipal capital.
A month earlier, in the neighboring city of Florida, Camagüey, a breakdown at the Sandino substation had also been fixed by using a high-power transformer moved from another substation in the north of the province. Years ago, it had been installed there to support irrigation for the old citrus project in Sierra de Cubitas. “Dressing one Saint’s statue by stripping another” was the final solution after unsuccessful attempts with other transformers they had planned to move from Santa Lucía beach and the sugarcane community of Jaronú. The option of new equipment had been ruled out from the outset, due to the lack of imported models and the virtual shutdown of the only transformer factory in Cuba.
“The country’s and the province’s leadership have stated that the population cannot be left without service,” the Camagüey Electric Company declared in a statement regarding the case. Contingency solutions of this kind became the norm three or four years ago. And the Cuban government doesn’t seem to have many alternatives. Whether it means not operating a new metallurgical plant at full capacity, or leaving an agricultural production hub without electricity, the idea is to buy time.