The government of Trinidad & Tobago has for the first time set a specific target for renewable energy – 10% of power generation from renewables by 2021. This target was set by Colm Imbert, the Minister of Finance, in his budget speech on October 5th 2015. He also stated that renewable energy was high on the government’s agenda, a sentiment echoed by the Minister of Energy, Nicole Olivierre, in her contribution to the budget debate. Solar and wind energy were the two renewable energy technologies that were identified. Trinidad and Tobago currently uses approximately 150 GW of power and therefore the target entails generating 150MW of renewable power by 2021 – an ambitious target.
Rampersad Motilal, Professor of Energy Studies, University of Trinidad and Tobago admits that this seems like an ambitious target, especially starting from the current position very near zero position, but points out it is a conservative target when compared to some of our Caribbean neighbors. St Vincent and the Grenadines set a target of 60% by 2020 and Dominica, a target of 25% by 2020.
Andre Escalante, CEO of Energy Dynamics, an energy efficiency and renewable energy service company, says that he is “happy that the government recognizes the importance of renewable energy”. In Escalante’s opinion the 10% target is achievable, once all stakeholders are on board but admits there are many challenges to be overcome.
Christopher Narine-Thomas, Chairman of the Energy Efficiency and Alternative Energy Committee of the Energy Chamber, agrees that there are many challenges, but also says “I see less challenges than I did just a few years ago”. Narine-Thomas points out that the argument against the viability of renewables in Trinidad has been driven by the excess generation capacity provided by the highly efficient TGU facility, which was originally commissioned to supply the aborted aluminum smelter project. TGU currently is running at only 50% of its maximum capacity. However, with the decommissioning of Powergen plant in Port of Spain, the TGU combined cycle facility is ramping up. Narine-Thomas explains that “this should rebalance our supply with our demand. Therefore, when the need for new generation capacity arises, due to population or industrial growth, we can probably seek to meet it with renewable generation.” He goes on to say that in Trinidad we will have the luxury of being able to have our renewables supported by reliable and highly dispatch-able natural gas fired back up.
Motilal points out that real stumbling block to widespread introduction of both solar and wind technology in Trinidad and Tobago is economic. This derives from the very low cost of electricity and the pricing structure that prevails in Trinidad and Tobago, because of the low price of natural gas sold to the generation facilities. On average, the price of electricity in Barbados and Jamaica is two and a half to three times more expensive than in Trinidad and Tobago.
Escalante says that one option to meet the 10% target is for the government to do it as one massive utility scale renewable energy project – similar to what Jamaica is doing. 150 MW of solar will cost about US$300M. Although this approach may easiest to implement, the current fiscal situation in the country does not lend itself to such a project and the track record of government-funded projects is not great. Escalante says that a more sustainable approach is to encourage private-sector investment, including from businesses and home-owners.
In order to stimulate private-sector investment, Escalante says that policy changes will be needed. He identifies the need to finalize the Feed in Tariff policy, in addition to a policy around power purchase agreements (PPA). This was echoed by Narine-Thomas as well, who also points to the need to amend the T&TEC and RIC acts, and the implementation of a Green Building Code.
In addition to policy changes it is clear that incentives are going to be needed for private investment to take place. Escalante indicates that financial incentives for installations, loans, educational incentives for training, duty concessions for imports of equipment and tax incentives will all be needed. Energy Service Company (ESCO) certification also needs to be implemented, so that the public, investors and the government have the assurance that proper energy audits are being conducted and the right projects implemented.
To support capital investment, Motilal suggests that a low interest renewable energy fund could be established to make soft loans available to private investors. For large scale wind turbine farms suitable land acreage at strategic sites will have to be available.
Motilal says that a cadre of trained manpower will be required to install and maintain these new systems. UTT is well positioned to offer diploma and certificate programmes in the area of renewable energy, both wind and solar power systems. National Energy Skills Centre (NESC) should also be able to offer programs at the craft and technician level to support this industry. UTT currently has a fully operational solar house on its Point Lisas Campus using photovoltaic panels to generate electricity to power all its household utilities and appliances.
The Arthur Lok Jack Graduate School of Business is also implementing a project to create an incubator for entrepreneurs implementing new renewable energy projects. They will be offering training to help facilities managers and other decision-makers more aware of the possibilities of both renewable energy and energy efficiency projects and then helping link these opportunities with entrepreneurs through their incubator. Citi bank and the National Gas Company helped fund the first phase of this initiative and the GSB are expecting to receive IADB grant funds to continue the programme.
While the publication of a target has stimulated new interest in renewables, Narine-Thomas emphasizes that that energy efficiency must be the first and most important priority. He points out that it does not make sense to put a solar panel on an inefficient house nor is it sensible to put a solar farm on an inefficient country: “We need to begin taking a demand side management approach to the preservation of our non-renewable resources”.
According to Motilal, by 2021 Trinidad and Tobago should aim to have the price for energy at the prevailing market price and that the current subsidy created through cheap natural gas should be removed. This will allow market forces to determine the most appropriate sustainable energy mix. However, given that the majority portion of energy consumed is by heavy industrial users who require an extremely stable and reliable supply, it may be impractical for renewable energy to penetrate the market beyond the domestic, commercial and light industrial sectors. This means that the maximum long-term target may not exceed 20% of total demand.