The world's biggest efficiency experiment

In 2004, German energy expert Dieter Seifried went to Cuba with funding from the German Environmental Ministry – and with an idea. Could Cuba become a giant "energy contracting" experiment?

In energy contracting, people with capital invested in efficiency and receive a dividend from the recipient's lower energy expenses. For instance, poor households generally have old, energy-hungry appliances. When energy prices rise, these households are hit the hardest; yet, they are the least able to purchase new appliances that will offset these expenses.

Energy contractors purchase new appliances for such households and receive compensation from the difference between the old cost of running, say, a refrigerator and the offset fuel costs. If the old units were inefficient enough, the investor gets a quick return, and the households get a new appliance – a win-win situation. In addition to a lack of funding, energy contracting is also common in businesses, where people may lack the knowledge to locate expenses and identify good investments outside of their field of business.

The idea was partly pioneered by US energy expert Amory Lovins. By the turn of the millennium, Germany’s Dieter Seifried had also already made a name for himself in numerous energy contracting projects – from school in his hometown of Freiburg to the solar&save projects in Nordrhein Westfalia. Later, he had a project at a university in Mexico (PDF). Always on the lookout for inefficiencies, he soon began looking into Cuba.

After the collapse of the Soviet Union, which had provided Cuba with oil at below-market prices, Cubans were left in the lurch in the 1990s, especially as the United States continued to enforce its embargo. Today, the country is still a museum of cars from the 1950s.

But Seifried mainly had his eye on refrigerators, which are the biggest electricity guzzlers in Cuban households. Cubans also had quite old appliances, and the country was heavily dependent on energy imports even for its electricity. To make things worse, power supply was unreliable, with grid outages practically an everyday event.

There is a positive and negative side to this story, which we will tell over the next few installments. On the positive side, Seifried kicked off a program that went much, much bigger than he ever dreamed. As the study Seifried independently produced explains (PDF in English), power outages resulting from a lack of generation capacity and lasting at least one hour occurred on "at least 224 days" in 2005, but they were a thing of the past just two years later in 2007. Furthermore, Cuban households got many new appliances at no charge (such as lamps and fans, though new fridges and cookers had to be paid for).

The negative side is mostly personal. Fidel Castro essentially took the idea and ran with it – but without the German energy consultant. Last year, Seifried therefore took a personal trip back to Cuba to document what had become of his baby. For us, his ultimate lack of involvement is a blessing, however; "because I was no longer part of Castro's Energy Revolution," he told Renewables International, "I was able to tell the story critically and independently." Over the next few days, we will focus on the story behind the PDF. (Craig Morris)