The increased cost of gasoline in T&T has given rise to a significant renewable energy push in the country inadvertently, as the twin-island state has been recognised as one of the more progressive users of electric and hybrid vehicles in the Caribbean.
The observation that T&T had been one of the Caribbean region’s surprise adopters of electric and hybrid vehicles, was discussed during a webinar reviewing the Topline Findings from the Annual Caribbean Renewable Energy Forum-Castalia Renewable Energy Index for the Caribbean.
“What was surprising to me is a lot of optimism in Trinidad, despite naturally Trinidad (being known as) as an oil and natural producer,” said David Gumbs, a director of Rocky Mountain Institute during the webinar.
However, Barbadian economist Justin Ram explained that the move was driven more by economic than environmental factors, as the country had seen several adjustments to the fuel subsidy in the past decade. That has led to gas prices rising significantly while conversely, the country’s electricity rates remained among the lowest in the region.
Ram said, based on this, he was surprised there weren’t even more people in the country with electric vehicles.
“The cost of electricity is actually quite low. I’m very surprised that there hasn’t been more uptake of people using electric vehicles. And I think as people look at the economics of this because what’s happening there is that the fuel subsidies for petrol and diesel have been gradually going down. So, therefore, the market prices of those fuels have been going up, which is going to start to lead to a natural shift of people looking to alternative fuels or electric mobility,” said Ram.
He however did note there were a significant number of hybrid vehicles on Trinidad and Tobago’s roads.
“So I think that’s what’s happening there, and if people look at economics, if you’re paying five US cents per kilowatt hour, you know it makes sense to go electric. What’s also been happening there, because I was there recently, is that you have a lot of hybrid vehicles as well. So, you have plug-in hybrids, that sort of thing is also gaining a lot of support. So it’s a move in the right direction,” he said.
However, it was noted that despite increased demand for electric vehicles on the island, the cost of an electric vehicle generally was more expensive than its combustion engine counterparts.
“One thing I think policymakers are going to have to look at is the foreign used vehicle market. Because there’s still a lot of ICE (Internal Combustion Engines) foreign-used vehicles that are coming in, and those tend to be considerably lower priced than new vehicles and in particular, even the electric vehicles that are coming in,” said Ram.
The Government introduced a tax concession for hybrid vehicles under 1599cc in 2017, in a bid to reduce the country’s carbon footprint. However, in his budget presentation in 2020, Finance Minister Colm Imbert removed tax concessions on all vehicles amid growing concerns about foreign exchange availability in the country, as the importation of vehicles had been identified as a significant drain on the country’s foreign exchange.
Imbert said then that US$400 million is spent on the importation of 25,000 cars.
However last year, the Minister reintroduced concessions on electric and hybrid vehicles as fuel prices around the globe surged.
Despite the reintroduction of the concession, both new and used car dealers stated the cost of importing preferred electric and hybrid vehicles remained mostly more costly than traditional combustion engine vehicles.
Tuesday’s webinar also acknowledged that Trinidad and Tobago had shown other strides concerning renewable adoption as it, significantly, had been one of the countries that had agreed to adopt electric buses.
He said moves like this, as well as market trends, suggest that the price of an electric vehicle could be on the way down soon.
“One more to add in terms of the cost, the market is shifting, so the costs will go down as more volume and more options come to the region. All the major manufacturers are shifting towards hybrid and electric, so come 2025 and onward you’re going to see all-electric vehicles available. So I think the costs will go down significantly. Trinidad just launched a procurement for gosh, 70 per cent of its bus fleet. Bermuda did one last year. Barbados did one the year before. I think Bermuda is now done,” said Gumbs
David Ehrhardt Chief Executive of Castilla however noted that based on the information gathered, the switch to electric vehicles had also proved to be more economic in terms of maintenance costs.
“We did a study of the electrification of buses in Jamaica. And interestingly, the all-in cost of electric buses, and the lifetime cost of operations and ownership are less already than the cost of new diesel buses. And so that’s pretty exciting. And it means that there’s an opportunity to save money already in transit. If the rate of the financing for the electric buses which will have a higher upfront cost can be worked out.”
However, he did not see the wider Caribbean adopting electric vehicles for personal or private use based on the data collected in their surveys as the initial cost to switch remained expensive, while infrastructure for such vehicles was still minimal in most states.
“I suspect that many may be past the tipping point where the all-in cost of the parts of the electric vehicle is actually less. But then we have barriers like the financing, the upfront costs, the lack of charging stations, and so on. And that means that although I’m pretty optimistic that the Caribbean will move to a lot having a lot of electric vehicles in the medium term, I’m not very optimistic about a big increase in electric vehicles over the next year,” said Ehrhardt.
Veronica Lizzio, Director of Sustainability Practice for Castalia, noted that in general, the Caribbean had placed optimistic targets concerning renewable energy transition.
“About a third of the countries are setting very ambitious targets of 100 per cent renewable energy. Of course, the target years vary by country but most of these countries are targeting by 2030 or around 2030 to reach this very high level of penetration,” she said.
She said while there was some doubt about the achievement of certain targets set, there were enough encouraging signs that the region was heading in the right direction, particularly given the progress made in countries such as Belize, Suriname and Dominica.
