The National Electric Union (UNE) said it was producing 533 MW of electricity by Wednesday evening, still just a fraction of typical dinnertime demand of between 3000 and 3200 megawatts, leaving a majority of Cubans in the dark as night fell across the Caribbean island.
Earlier, the communist-run government said it would prioritise returning power to hospitals and water pumping facilities. Schools and non-essential government services were closed until further notice.
Lights flickered on across parts of the capital Havana late on Wednesday. The local electric company said more than 260,000 clients had seen power restored.
It was the latest in a string of nationwide blackouts of Cuba's antiquated and increasingly frail power generation system. This year, Cuba's grid fell into near-total disarray, stressed by fuel shortages, natural disaster and economic crisis.
Dwindling oil imports from Venezuela, Russia and Mexico pushed the island's obsolete and struggling oil-fired power plants into full crisis several months ago.
Hours-long rolling blackouts and severe shortages of food, medicine and water have made life increasingly unbearable for many Cubans, who in recent years have fled the island in record-breaking numbers.
Cuba blames the crisis on US sanctions, which complicate financial transactions and the purchase of fuel.
The Wednesday morning blackout was triggered by a failure at the Antonio Guiteras power plant in Matanzas, the island's top electricity producer, which shut down about 2am.
Several other major power plants were undergoing maintenance and were offline when the Matanzas plant failed, starving the grid of electricity and leading to the nationwide collapse, the energy minister said.
Scattered protests have erupted over the past two months over the repeated power failures as well as water, gas and food shortages.
Cuba's decrepit and long obsolete grid collapsed multiple times in October as fuel supplies dwindled and Hurricane Oscar struck the far eastern end of the island, then again in November with the passage of Hurricane Rafael.
Cuba`s government last week issued a decree ordering state and private businesses to generate more of their own electricity from renewable resources.
The regulations also require businesses to limit their use of air conditioning, among other measures, as the country wrestles with the increasingly dire energy crisis.
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