Welcome to today’s GridBrief! Another busy day in the world of energy. Today we’re looking at two sides of the energy coin. On one side, Cuba faces its third day without electricity, a stark reminder of what can happen when infrastructure is neglected. On the other, the U.S. is investing billions to ensure that our own grid is prepared for the future. Let's dive in.

Cuba’s Grid Disaster—Decades of Neglect Come Home to Roost

Cuba is facing one of the worst energy crises in its history as much of the island remains without power. Three days ago, the island’s grid collapsed, plunging large swaths of the country into darkness. Hospitals are running on limited generator power, leaving medical care teetering on the edge, and the broader economy has ground to a halt as Prime Minister Manuel Marrero ordered all non-essential commercial activity to cease.

So how did Cuba get here? The roots of this crisis run deep. Cuba’s electrical grid, primarily dependent on outdated thermoelectric plants, hasn’t received the necessary maintenance for decades. Under the country’s communist regime, the government has prioritized political projects over critical infrastructure investments. The energy sector has been starved of modernization efforts, leading to an over-reliance on dilapidated facilities that simply cannot handle current demand.

Jorge Piñón, a senior research fellow at the University of Texas at Austin, pointed out that Cuba’s thermoelectric plants have been running non-stop without necessary maintenance, resulting in inevitable breakdowns. Cuba’s energy infrastructure has suffered from chronic underinvestment, with little access to international capital or modern technology due to both the U.S. embargo and the inefficiencies inherent in a state-run economy.

This blackout isn’t just an inconvenience; it’s life-threatening. Hospitals struggle to operate life-saving equipment, and homes face unbearable heat without air conditioning or refrigeration. People dependent on medical devices like oxygen machines are at extreme risk. And with the island’s already limited fuel supplies, even generators are becoming scarce.

This isn’t Cuba’s first energy collapse, but it might be its worst. The country has experienced rolling blackouts for years, but with no short-term solutions in sight and a collapsing economy, there is no clear path out of the crisis. Experts are calling for major international investments to rebuild the grid, but Cuba’s isolation on the world stage makes this unlikely. Without serious intervention, the Cuban government will continue to patch the system with band-aid fixes that fail as quickly as they’re implemented.

U.S. Grid Resilience Investments—Aiming to Avoid Cuba’s Fate

Meanwhile, as Cuba grapples with grid failure, the U.S. is doubling down on efforts to make its own power infrastructure more resilient. The Department of Energy (DOE) recently announced nearly $2 billion in new funding for 38 grid resilience projects under its Grid Resilience and Innovation Program (GRIP). These projects are aimed at hardening the grid against extreme weather events, accelerating clean energy integration, and ensuring that the U.S. doesn’t face the same fate as Cuba.

This funding will add over 7.5 gigawatts of transmission capacity, helping the grid handle the increasing demand as more renewables come online. Key projects include Georgia Power’s $160 million investment in dynamic line rating technology and Exelon’s $100 million push for grid-optimization in underserved communities. The Biden administration has focused heavily on preparing the grid for future challenges, sparking over $4.2 billion in public-private investment so farrast between Cuba’s grid collapse and the U.S.’s proactive grid resilience planning couldn’t be starker. While Cuba struggles to keep the lights on, the U.S. is looking ahead, building the infrastructure needed to support a future driven by renewable energy. These investments are crucial, as climate change brings more extreme weather events that put existing infrastructure to the test.

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Good Bet, Bad Bet

Bad Bet: Edison and AC Power
For today's Bad Bet, let's look back at Thomas Edison's infamous prediction about alternating current (AC). Edison, a proponent of direct current (DC), fought a bitter battle against the adoption of AC, famously dismissing it as too dangerous and unsuitable for widespread use. He even went so far as to publicly electrocute animals with AC to demonstrate its perceived dangers.

Edison’s bet against AC turned out to be one of the most historically significant misses in the energy industry. Today, his prediction seems absurd in light of how central AC is to the modern electrical grid.

Good Bet: Exelon (EXC)
Here’s why: Exelon is well-positioned to benefit from the DOE’s grid resilience funding. With a $100 million investment in grid-optimization technology, focused on underserved communities, Exelon is set to play a key role in grid modernization efforts. Keep an eye on their stock as these projects come online.

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