Félix Fernández-Shaw touched down in T&T in late January.
He was here for less than 24 hours and his schedule was packed with meetings with different stakeholders.
The aim was to address some of the most pertinent challenges facing the twin-island in the 21st century.
He is the European Commission’s Director for Latin America and the Caribbean, and his arrival into T&T was preceded by similar visits to other islands across the region.
His trip was meant to be more than cosmetic - or a show of Europe’s interests in this small corner of the world.
Instead, it meant to continue building on the third EU-CELAC (European Union and the Community of Latin American and Caribbean States) Summit which took place in Brussels, Belgium last July.
The key priority areas included energy transition, national security, digitisation and trade relations across the Atlantic.
Of particular interest to Fernández-Shaw is the Caribbean’s thrust towards greener economies.
Energy transition is a key talking point around the world these days, but the cost associated with it is less talked about.
It is a point of reference that dominated his trip, and his conversation with the Sunday Business Guardian.
Citing the Global Gateway Investment Agenda, he pointed to T&T’s transition to renewable energy but was quick to add, “This costs money. It takes investments. It takes technology. It takes risks. People have to come here with their technology and risk capital to work on technology we’re all experimenting with.”
This is where the Spanish diplomat is hoping the European Commission can play a major role in being the middleman that encourages European businesses to invest in T&T’s energy transition.
He spent 10 days in the Caribbean exploring how European investors and governments are working together to promote these transitions.
“We looked at what problems do they have. How can we, from the public side of Europe, unlock those investments? Because these are risky investments, new technologies. We don’t know how societies will respond to them,” he told the Sunday Business Guardian.
Apart from how societies will respond to the energy transition, the Caribbean carries with it its own challenges.
Fernández-Shaw is well aware of them and cited the structural issues, the size of the market and the fragmentation of the market.
He explained, “Investors tell me it takes them the same effort in terms of human resources and work to build a gigantic plant in Brazil and a Trinidad-sized plant in the Caribbean.
It takes the same amount of work, but of course, the yield and the benefits are completely different, so I’m here to push European investments to come to the Caribbean.
These are not going to be the big global companies but there are plenty of midsize companies that are already working in the Caribbean.”
While saying the Caribbean is “well positioned” in terms of attracting investment, he admitted there is work to be done to successfully green the economy.
“There are a certain number of energy markets, electricity market reforms that need to happen,” Fernández-Shaw stated.
He cited Europe’s liberalisation of the electricity market two decades ago. “It’s difficult to do that when you are a group of islands because it is difficult to liberalise. Nevertheless, we find that a whole conversation between governments, energy utilities, and investors needs to happen because there is always a transition and in that transition, there is financing, regulations, investment and technology.”
He also pointed out moving the production of electricity from fossil fuels to renewables and the costs associated with that change.
At the moment, T&T produces its electricity through the means of natural gas and natural gas is in short supply.
Fernández-Shaw also said part of greening the economy is looking at jobs of the future.
Two problems he pointed out when investing in green alternatives are the financial risk as well as having a workforce that can develop the business and technology.
He added, “If you’re going to green your economy, in the next 20 years, you are going to need to have technicians that work all along the value chain on sustainability assessments, electricians, people that manage power plants, people that manage the software that goes with it, people that do feasibility studies, all these kinds of things bring jobs.”
He went further in saying greening the economy will mean greening the entire ecosystem that goes with it including the manufacturing sector. It’s why Fernández-Shaw says it is imperative to train people to be equipped to those jobs. He says they are willing to work along with the government and investors to organise vocational training for those wanting to work in those areas.
Another key aspect of cooperation is the development of the green hydrogen sector.
T&T is the largest exporter of hydrogen-related products to the European Union (EU).
The EU is T&T’s second-largest trade partner.
In July last year, according to the UN COMTRADE database, of T&T’s exports to the EU of US$5.88 billion, mineral fuels, oils, and distillation products alone accounted for almost US$4 billion.
Inorganic chemicals, precious metal compounds and isotopes ran a distant second at US$684 million and organic chemicals rounding out the top three exports at approximately US$639 Million. Fertilisers were T&T’s fourth largest export at almost US$440 million.
Fernández-Shaw believes T&T has all the necessary resources for a successful hydrogen sector.
“Me being a lawyer, all the engineers laugh when I say, when you have to produce green hydrogen, you need water, wind or sun and you need an industry. You have here all those things. The most costly part of that effort is the industry, which you have,” he added.
He noted that one of the main efforts both the Government and the EU are looking for is how the country can continue producing hydrogen in Trinidad “but we slowly go from grey to green.”
Further to that, he asked what is the new type of renewable energy source that adapts.
“Is it solar? Is it wind? Is it geothermal? We’ve worked with the government on analysing the wind in the southern canal between Trinidad and the continent, there is the enormous potential of wind capacity there to produce the renewable energy to power a hydrogen-producing plant,” Fernández-Shaw said.
Asked about Europe’s renewed interest in this part of the world post-pandemic, he answered by saying, “We need to be supportive because the Caribbean is widely affected by climate change because the structural problems the Caribbean has are very difficult to surmount without a bit of support. If you start looking at the possibility for the Caribbean to power its own future, all you need is sun, water, wind and industry. T&T has the industry, the rest of the Caribbean has sun, water and everything. This could be a fantastic way to make the Caribbean power independent.” He added that it makes little sense for Europe to “green itself” while the rest of the world goes in another direction.
For now, he heads back to Europe to try to convince investors that T&T’s enormous potential in green energy can become a reality with an injection of capital in the twin-island nation.