Trinidad and Tobago looks to international investment and renewables to grow energy sector

With an energy system entirely dependent on natural gas, the transition to cleaner energy generation has emerged as a pressing priority in Trinidad and Tobago. Indeed, per capita carbon emissions from energy-related activities in T&T are nearly 2.5 times greater than the world average, according to the Inter-American Development Bank.

In June 2019 the government reaffirmed its commitment to generating 10% of its electricity from renewable sources by 2021, although it did not specify what energy sources it would prioritise. In the same month, the International Renewable Energy Agency awarded T&T $3m for the development of its renewables segment. This followed the issuing of a tender by the government, inviting bids for the construction of waste-to-energy plants.

Diversified Mix

In addition to reducing carbon output, adding renewables to the electricity generation mix would take pressure off the natural gas industry, allowing more of T&T’s gas output to be channelled into the higher-value production of liquefied natural gas. “Currently, 100% of our electricity is generated from natural gas, and because of the shortage we need to increase efficiency and use less gas for electricity generation,” Thackwray Driver, CEO of the T&T Energy Chamber, told OBG.

While improving the efficiency of gas-fired power stations remains a priority for the country, efforts are also under way to establish large-scale renewable energy projects. “The will to channel investment into renewables already exists in T&T, with BP, BHP and Shell all having made strides forwards in green energy projects,” Krishna Persad, CEO of the domestic energy services company Renaissance Energy, told OBG. In what is expected to give greater impetus to the development of the country’s solar industry, the government signed the International Solar Alliance (ISA) framework agreement in October 2019. The agreement promotes the use of solar technology by striving to make it more cost-effective and accessible to all countries rich in solar resources. Indeed, T&T was listed by the ISA as one of the countries with the highest potential for solar power development. According to a statement issued by the Ministry of Planning and Development, the country sees the agreement as an opportunity to foster international cooperation for solar development, which will not only diversify the energy mix but also boost employment through the generation of green jobs.

In early December 2019 the government signed an agreement with the EU for the construction of a solar park at the country’s Piarco International Airport. As part of the deal, which forms part of the Global Climate Change Alliance Plus Initiative, the EU will provide $4.5m in financial support for the project. The facility is earmarked for completion by 2024 and will have an average annual electricity generation capacity of 1.4m KWh.

Providing Incentives

Given the country’s historic reliance on a state-owned gas-fired power station network, T&T lacks a sufficiently developed legal framework to adequately support private investment in the sector. In particular, the country does not have the necessary legislation in place to enable the development of a distributed generation system, with small-scale wind and solar energy producers located close to consumers. As such, the first round of the country’s renewables transition will likely be driven by investment from large-scale international utilities companies, though energy-intensive domestic industries may initiate their own projects.

Nevertheless, the country will be able to look to other states in the region in order to reform its energy sector legislation and provide the necessary infrastructure to stimulate investment in the renewables segment. “We have seen a lot of success in Jamaica in terms of how it has switched to solar and wind from natural gas since 2015,” Driver told OBG.

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The Report: Trinidad & Tobago 2020

Energy chapter from The Report: Trinidad & Tobago 2020

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