At the Energy Chamber’s Energy Efficiency and Renewables Conference 2020, Prime Minister Dr. Keith Rowley announced two ambitious grid-scale solar power projects and a waste-energy facility that would collectively generate up to 120 MW of electricity when commissioned.
In a global economy that is uncertain after months of sustained COVID-19-related economic lockdowns, every cubic metre of natural gas is needed to finance job-creation and maintain the national economy. The production of renewable energy at prices on par with that of traditional energy gives Trinidad and Tobago, a natural gas-producing country, the option of diverting supplies to downstream industry.
In absolute terms, the proposed 120 MW of electricity is approximately 4 to 5% of Trinidad and Tobago’s current energy needs which was estimated by former Public Utilities Minister, Robert Le Hunte at around 2830 MW. This is less than half of the projection made by Finance Minister Colm Imbert in the 2018-2019 budget that 10% of the country’s energy supply would come from renewables in 2021.
While T&T’s industrialised economy is the largest consumer of energy, the nation’s households are also overwhelmingly overconsuming. According to the World Bank, the electric power consumption per capita in T&T is more than twice the global average and more than 3 times higher than the average for Latin America and the Caribbean.
This overconsumption of energy by households is encouraged by historically low electricity prices driven by available natural gas and the electricity subsidy. In effect, we have never had to bear the true cost of our energy usage. Notwithstanding the decline in national energy income the electricity subsidy remains a politically-sensitive issue that successive governments have been unwilling to tackle, with the result that the price of electricity in T&T remains within the 20 lowest in the world.
In a recent article on ‘Electricity and Diversification’, Dr. Thackwray Driver, Chief Executive Officer at the Energy Chamber noted that arguments against removing the subsidy to force changes in public consumption have always been deemed “anti-poor people.” He went on to challenge the view with data showing that “the top 15% of residential users of electricity (comprising households who have electricity bills over TT$750) accounted for the usage of 43% of total residential electricity…by contrast, the bottom 20% of households use a tiny amount of residential electricity – just 3% (households with an electricity bill of under TT$100).”
To put it another way, 60,000 of the more well-off households in T&T consume almost half of the available residential electricity, while 80,000 lower-income households utilise only 3%. Dr Driver contends that this comparison is a glaring indication that “the electricity subsidy is a direct transfer of the nation’s wealth in the form of natural gas for power generation, primarily to the better-off households in the country.”
It makes sense that the provision of electricity to the most vulnerable groups, as represented by the lower-income households that use 3% of total electricity, must be a priority when decarbonizing our domestic electricity supply. Directing renewable energy to meet these needs, at existing low costs, can achieve this just transition. Luckily, the proposed 120 MW supply from the two solar power projects announced by Dr Rowley is equal to just over 4% of current electricity production.
Once we are able to secure the energy needs of these households, more thoughtful discussion should be had about the removal, gradual or otherwise, of the electricity subsidy. Being confronted with the true cost of electricity usage should encourage the top tier of domestic users to adjust their electricity usage to embrace energy efficiency – thereby reducing demand which would release more natural gas for diversion to other sectors of the economy.
Becoming a more sustainable and decarbonized country, especially for T&T, is fundamentally dependent on how we produce and use our energy. Both the supply and demand side must be considered – while we call for greener and more sustainable energy supplies, we must also embrace the lifestyle and consumption changes that are necessary to reduce our total energy demand.
