Energy efficiency and renewable energy have a key role to play in solving the persistent gas shortages that have plagued the Trinidad and Tobago liquefied natural gas (LNG) and petrochemical sectors since 2010. 

According to Mark Loquan, President of The National Gas Company of Trinidad and Tobago Ltd. (NGC), a change is urgently needed to reduce the volumes of gas being used for power generation and instead divert gas to the highervalue petrochemical and LNG sectors. This will increase overall revenue to the country. Speaking at the Energy Chamber’s recent Clean Energy Conference, Loquan supported the government’s stated commitment to achieve 10% renewable energy by 2021. He added that energy efficiency and renewable energy were key measures to reduce natural gas consumption in the country. 

He reported that studies revealed that solar power could reduce energy consumption by over 40% in the household electricity sector and energy efficiency programmes on the Point Lisas Industrial Estate could reduce greenhouse gas emissions by 15%. 

He added that the urgency of the country to achieve these targets goes beyond mitigation of climate change. He said that power generation currently consumes about 280 MMscf/d which is the equivalent of five ammonia plants or 30 cargoes of LNG at a time when our economy has experienced significant declines, primarily due to low commodity prices and gas shortages. 

Loquan stated that the NGC strategy includes two imperatives, firstly, to secure and stabilise gas supply and secondly, to drive energy efficiency. He said that under the current model NGC has to fund the electricity subsidy and posed the question ‘Is this the best use of our resources? Would the country not benefit more if gas was sold for commercial use, with real value captured as dividends, taxes and reinvested funds?’ 

According to Christopher Narine-Thomas, Chairman of Energy Efficiency and Alternative Energy Committee of the Energy Chamber of Trinidad and Tobago, the current structure of the power generation sector creates an opportunity cost subsidy through which the country loses significant revenue each year. 

He clarified that the subsidy is not on electricity, but really on the natural gas that is sold to Trinidad and Tobago Electricity Commission (T&TEC) for power generation. The consequence of this is that the country loses the ability to use that natural gas in the downstream sector or for LNG exports. This effectively reduces volume of gas available to these sectors, he said. 

Narine-Thomas showed the value of the opportunity cost subsidy for electricity which indicated that in 2016, the value of the subsidy would have been in the order of US$122 million and over the last five years, the subsidy would have been valued at US$1.5 billion. He was careful to explain that over the last three years, the value of the subsidy has come down because of efficiency gains in the overall system, created by the modern combined-cycle Trinidad Generation Unlimited (TGU) plant coming online, in addition to the falling cost of natural gas in the LNG and petrochemical sectors. When prices of natural gas start to rise again, the subsidy will also increase. 

This represents funds that could have gone to NGC from the sale of natural gas to the petrochemical sector and LNG, at a time when these sectors are suffering from persistent gas shortages.