Energy and Energy-Related Industries

September 19th, 2021

---

Planning T&T’s Sustainable Energy Future

By Kay Baldeosingh-Arjune

Since the announcement of its 6-point plan in May 2022 to increase gas production and ensure the long-term viability of the energy sector in Trinidad and Tobago (T&T), the Energy Chamber of Trinidad and Tobago has continued to work with the government and the private sector to ensure that these priorities are advanced. There have been varying levels of progress across the different parts of the plan. Chamber President and CEO Dr. Thackwray Driver gives an update.

What progress has been made on fast-tracking bids and changing the fiscal regime?

In 2022 the Ministry of Energy and Energy Industries executed a successful bid round for onshore and nearshore blocks with 16 bids for 8 blocks. The Minister of Energy has repeatedly stated that the speed of bid rounds, negotiations and approvals must be accelerated and has expressed his frustration with delays. There has not, however, been a systematic process improvement initiative to accelerate decisions. The government has been receptive to changes to the fiscal regime. In 2022, the Minister of Finance announced changes to the supplemental petroleum tax (SPT), which were in line with the Energy Chamber’s recommendations. While there is still a lot of work to be done, the Minister has committed to engaging with the Energy Chamber and industry.

Have there been any achievements concerning producing more of our electricity from renewables?

We have seen moves from the government toward renewables and reducing the carbon intensity of production. The private sector has also been engaged in this area, with bpTT and Shell Trinidad and Tobago, currently building the largest solar energy project in the Caribbean located in Brechin Castle and Orange Grove. When completed, the project will generate up to 112MW of electricity. The Minister of Energy has indicated the intention to have more grid-scale renewable energy coming onto the grid in the coming years. Several small-scale projects are already on stream to come on the grid, including a 1.4MW solar facility at the Piarco International Airport and 12 small-scale projects being executed by the United Nations Development Programme (UNDP) and funded by the European Union (EU).

What about electricity rates?

The Regulated Industries Commission (RIC) has published a draft electricity rate review and held public consultations. The Energy Chamber submitted detailed recommendations to the RIC, supporting the removal of the current cross-subsidies that the gas industry provides for electricity consumers. We have always advocated for efficient and transparent pricing of fuels and electricity. We are now awaiting the final determination.

Any progress on the hydrogen front?

There has been a push by industry to develop large-scale hydrogen production, with the NewGen project being developed by HDF Energy and Kenesjay. The goal is to produce green and carbon-neutral hydrogen for the petrochemical industry, providing a pathway for decarbonisation and reducing emissions.

The Government has also been active in developing the policy environment for the development of a hydrogen economy through National Energy, which has completed a study with international consultants outlining a roadmap for action. The study concluded that substantial wind energy would be necessary to make this a reality. The EU funded a detailed study titled “Setting the Path for Wind Energy in T&T”. The study, a first in T&T, outlined a draft strategy for developing a wind industry. Developing wind energy will need the collaboration of multiple stakeholders. The studies done by both National Energy and the EU highlight the need to complete a national wind resource assessment programme (WRAP), and the Energy Chamber continues to advocate for this to be done.

In addition, one of the key ways to decarbonise production at scale is through carbon capture, utilisation and storage (CCUS). The national Carbon Capture and CO2 Enhanced Oil Recovery (EOR) Steering Committee has done a lot of work on developing this initiative, including creating a carbon storage atlas which outlines possible sites where CO2 can be stored in geological features.

What other developments have been undertaken by the private sector?

Under the new agreement between the government and shareholders in Atlantic LNG, Atlantic will now operate as a single, unitised facility with one ownership structure. This will allow Atlantic to improve the efficiency of operations and make further investments to decrease the carbon intensity of their liquefied natural gas (LNG), including through CCUS.
Methane is a more potent greenhouse gas than carbon dioxide, and preventing methane leaks is a central pillar in the fight against global warming. The National Gas Company has embarked on a programme to reduce methane leaks from their activities. It has also set up monitoring systems to detect leaks and other sources of methane using satellite data. Methanol has come to the forefront as a lower-carbon marine fuel. Two global methanol players with operations in Trinidad, Proman and Methanex, are actively promoting the uses of methanol in the maritime industry. This is an excellent opportunity for T&T to develop a new low-carbon bunkering industry.

What are the biggest challenges to achieving the Energy Chamber’s plan?

The 6-point plan is an initiative that requires the involvement of many stakeholders, while decision-making in government is often siloed, frequently creating bottlenecks. We must work with individual companies and the Ministry of Finance, the Ministry of Energy, the Ministry of Planning and Development, the Ministry of Public Utilities, the Environmental Management Authority (EMA), the Trinidad and Tobago Electricity Commission (T&TEC) and the RIC. The changes that are needed are ambitious and require coordination among all the stakeholders, working toward a common target of achieving the objectives set out in the plan.

---

Transitioning to Clean Energy in T&T

By Kay Baldeosingh-Arjune

According to Energy Expert Andrew Jupiter, Trinidad and Tobago (T&T) has not missed the boat when it comes to the energy transition. But urgent decisions and actions must be taken if T&T is to press its advantage as an experienced, established energy producer, benefit from falling solar energy technology prices, and prepare the economy to thrive in a world that needs and rewards clean energy producers.

Jupiter warns, in a no-nonsense paper, of dire consequences if successive governments of Trinidad and Tobago do not implement an aggressive energy transition policy and “the country sleep-walks toward 2050 in the mistaken belief that somehow oil and gas production will continue to support cheap electricity, substantial government budgets and large exports of liquefied natural gas, ammonia and methanol.” Entitled “Suggested Energy Transition Policy for Trinidad and Tobago, The Next 50 Years,” published in 2021, Jupiter and his co-author Dr. Pedro van Meurs of Van Meurs Energy, said: “The most important conclusion of this report is that Trinidad and Tobago does NOT have a competitive advantage in producing renewable energy.”

Without an aggressive policy to attract investment in energy transition projects, they predicted the closure of T&T’s methanol and fertiliser plants which would be unable to compete with their greener competitors, closure of the cement factory because of the lack of natural gas, and a static Gross Domestic Product (GDP) per capita of US$18,000 per annum. Noting the destabilising social impact this would have, Jupiter said: “It, therefore, seems justified that nations like T&T should focus first on saving the national economy before trying to save the world.”

He said this requires urgently improving fiscal incentives to accelerate deepwater exploration and encouraging private solar energy generation, electric vehicles (EVs) and electric air taxis, combined cycle gas plants and green hydrogen and green ammonia production. In addition, “the whole country knows that subsidisation of electricity is something that should be addressed,” he noted.
We need to have a clear plan with timelines and a clear and transparent reporting process to keep the public informed and the government, as the driver of the plan, accountable, he said. Key milestones and timelines proposed in Jupiter’s paper include:

• Commitment by the Trinidad and Tobago Electricity Commission (T&TEC) to produce 20% of electricity production from renewables and establish licensed areas for offshore wind generation by 2025.
• EVs will comprise 20% of vehicle imports, and the first electric air taxi will begin service by 2030.
• By 2035, fertilisers will be produced based on green or blue ammonia to avoid European levies, and inter-island ferries will be electric or powered by renewable marine fuel.
• By 2040, all ammonia exports to be based on green hydrogen.
• By 2045, the first DirectAir Capture (DAC) project will be initiated.
• By 2050, all electricity production will be based on renewables, and T&T will begin to export synthetic jet fuel.
• By 2060, T&T will achieve Net-Zero Carbon, it will become a large green ammonia exporter to world markets and a green hydrogen and synthetic fuels exporter to the Caribbean; all imported vehicles are EVs, and GDP per capita has significantly increased.