The en­er­gy tran­si­tion is set to be a daunt­ing task for the Caribbean, but T&T may be bet­ter placed than most be­cause of the very in­dus­try the tran­si­tion is set to dis­place.

Last week Mon­day, the De­vel­op­ment Bank of Latin Amer­i­ca and the Caribbean (CAF) launched its Re­port on Eco­nom­ic De­vel­op­ment (RED) 2024, at the Cen­tral Bank Au­di­to­ri­um.

Dur­ing the launch, prin­ci­pal econ­o­mist at CAF’s de­part­ment of so­cioe­co­nom­ics Dr Lian Al­lub pre­sent­ed “Re­newed En­er­gies: A just en­er­gy tran­si­tion for sus­tain­able de­vel­op­ment” in which he out­lined that the Caribbean has a del­i­cate bal­anc­ing act to make the tran­si­tion to non-en­er­gy sources.

How­ev­er, af­ter lis­ten­ing to oth­er pre­sen­ta­tions and speech­es from lo­cal stake­hold­ers, Dr Al­lub ac­knowl­edged that Trinidad and To­ba­go had tak­en steps in the right di­rec­tion re­gard­ing en­er­gy tran­si­tion.

Those pre­sen­ta­tions in­clud­ed speech­es from Fi­nance Min­is­ter Colm Im­bert and En­er­gy Min­is­ter Stu­art Young as well as a pan­el dis­cus­sion fea­tur­ing Toni Sir­ju-Ram­nar­ine, pres­i­dent of NGC Green Com­pa­ny, Carl­ton Thomas, busi­ness ven­ture man­ag­er, Sus­tain­able En­er­gy Di­vi­sion, Na­tion­al En­er­gy Cor­po­ra­tion of Trinidad and To­ba­go and Sheena Go­sine-Singh, en­er­gy ad­vi­sor spe­cial­is­ing in sus­tain­able en­er­gy at the Min­istry of En­er­gy & En­er­gy In­dus­tries.

Min­is­ter Young and Sir­ju-Ram­nar­ine, in par­tic­u­lar, had dis­cussed sev­er­al re­new­able ini­tia­tives in­clud­ing Project Lara, a so­lar project set to gen­er­ate 112 megawatts up­on com­ple­tion. 

“It may be a bit more dif­fi­cult for the Caribbean is­lands to just move quick­ly to re­new­able sources. But from what I heard to­day from the pan­el­lists is that Trinidad and To­ba­go, and I think that the rest of the Caribbean will try to move, or are plan­ning to move to this,” said Al­lub, in an ex­clu­sive in­ter­view with the Busi­ness Guardian last week.

He said while the tran­si­tion would ap­pear to sig­nal a damp­en­ing of T&T’s econ­o­my due to its re­liance on the en­er­gy sec­tor, T&T’s re­sources had al­lowed it to es­tab­lish key links to the tran­si­tion.

“I think that Trinidad has an ad­van­tage, be­cause the po­ten­tial of the hy­dro­car­bon, the in­come that comes from the hy­dro­car­bon will help them de­rive some of the re­sources to fi­nance the tran­si­tion,” said Al­lub, who ac­knowl­edged that many oth­er Caribbean coun­tries did not have that fi­nan­cial base to push the tran­si­tion.

“If a coun­try does not have such a big source of re­sources com­ing from the rest of the econ­o­my, then we have to think from where the fi­nanc­ing will come. And that is where the de­vel­op­ment banks and oth­er in­sti­tu­tions that try, and would want to fi­nance the tran­si­tion, will have to take ac­tion,” said Al­lub.

But the econ­o­mist said the tran­si­tion would still be chal­leng­ing for Trinidad and To­ba­go, par­tic­u­lar­ly as it had leaned on fos­sil fu­els for so long not just for the gen­er­a­tion of pow­er but as the back­bone of its econ­o­my.

“As all of the speak­ers to­day were say­ing, Trinidad and To­ba­go has an elec­tric­i­ty ma­trix that is based on gas, and Trinidad and To­ba­go will need to ad­vance a bit in in­cor­po­rat­ing non-con­ven­tion­al re­new­able en­er­gy, wind and so­lar. But al­ready the pan­el­lists were say­ing that you are tak­ing ac­tion to do this. So there is a good prospect for this,” he said, adding that T&T could not sim­ply shut down its en­er­gy sec­tor overnight.

In­stead, he ex­plained that there need­ed to be a nu­anced ap­proach to the tran­si­tion where eco­nom­ic sta­bil­i­ty is main­tained.

“That’s a part of the of the work that Trinidad and To­ba­go has to do but with­out for­get­ting that a big part of the econ­o­my of Trinidad and To­ba­go comes from oil and gas. So it’s not that to­mor­row we are not go­ing to use any more oil and gas. We have a coun­try that has fos­sil fu­el, and it has to take the ad­van­tage, the op­por­tu­ni­ty, to use the re­sources as the tran­si­tion evolves, but try­ing to adapt to the new en­vi­ron­ments and to the new set­up,” said Al­lub.

“Try­ing to move out from fos­sil fu­els to more clean en­er­gy sources, that does not have to be im­me­di­ate, and that is why we have to think about coun­tries that are at dif­fer­ent points of the tran­si­tion and that have dif­fer­ent re­sources (and not con­sid­er them) the same,” he con­tin­ued.

“For ex­am­ple, for Chile in the re­gion does not have fos­sil fu­els. They have to get out of coal and just move to in­cor­po­rate wind and so­lar, com­pared to Trinidad and Venezuela or Ecuador that pro­duce and ex­port and gen­er­ate phys­i­cal rev­enues on fos­sil fu­els. So, for these economies, we have to think care­ful­ly about how to in­cor­po­rate re­new­ables with­out a quick aban­don­ment of fos­sil fu­els.”

That point had been un­der­lined by Fi­nance Min­is­ter Colm Im­bert dur­ing his speech at the launch, as he made a call for a just tran­si­tion not­ing that while T&T did have an econ­o­my based on hy­dro­car­bons, and had been high on the list in terms of CO2 emis­sions per capi­ta, it still large­ly con­tributes far less to emis­sions than many larg­er de­vel­oped na­tions.

Al­lub said this con­sid­er­a­tion al­so had to be mea­sured against the very se­ri­ous threat of cli­mate change, which had al­ready se­vere­ly im­pact­ed the Latin Amer­i­ca and Caribbean re­gion. The Caribbean he not­ed al­so faced a greater chal­lenge in es­tab­lish­ing re­new­able en­er­gy com­pared to the rest of the re­gion, par­tic­u­lar­ly due to lim­it­ed re­sources and land space.

“What I have shown is that the par­tic­i­pa­tion of re­new­ables in the elec­tric­i­ty ma­trix is still low in the Caribbean. But, at some point, that’s nat­ur­al be­cause re­new­able sources need a lot of space in or­der to gen­er­ate so the so­lar farms or the wind farms take a lot more of space than a gas plant to pro­duce en­er­gy. And al­so, the fixed cost of en­ter­ing in these tech­nolo­gies, is very high. And we have to think that the Caribbean Is­lands al­so are more af­fect­ed by ex­treme weath­er events,” said Al­lub, who not­ed the cli­mate chal­lenge would con­tin­ue to be a con­cern.

“I know that the Caribbean and Cen­tral Amer­i­ca are the re­gions with­in Latin Amer­i­ca and the Caribbean and in the world that are have ex­pe­ri­enced the most ex­treme weath­er events, and our 2023 re­port fo­cussed on cli­mate change and the preser­va­tion of bio­di­ver­si­ty. And there you can find more in­for­ma­tion on how cli­mate change has af­fect­ed dif­fer­ent re­gions and the pro­por­tion of weath­er events and what was a change in the tem­per­a­ture,” said Al­lub.

He said while he does not have all the num­bers re­gard­ing the en­vi­ron­men­tal im­pact of cli­mate change, he was sure the Caribbean and Cen­tral Amer­i­ca are go­ing to be the re­gions that are more af­fect­ed by ex­treme weath­er events, and that the in­creas­ing tem­per­a­ture will hit hard­er.”

T&T’s tran­si­tion al­so had to weighed against its cur­rent con­sump­tion, Carl­ton Thomas, busi­ness ven­ture man­ag­er, sus­tain­able en­er­gy di­vi­sion, Na­tion­al En­er­gy Cor­po­ra­tion of Trinidad and To­ba­go not­ed.

“When you look at Trinidad and To­ba­go, we have de­mand to­day for 1.7 mil­lion tonnes of hy­dro­gen. That is a very sig­nif­i­cant num­ber. When you look through­out the re­gion, I think your re­port quot­ed that rep­re­sents 40 per cent of the de­mand for hy­dro­gen in the re­gion just in one coun­try and pre­dom­i­nant­ly con­cen­trat­ed in one lo­ca­tion in Point Lisas. So the po­ten­tial cer­tain­ly is there and its re­al­ly about just ad­vanc­ing this pi­lot fa­cil­i­ty start­ing from now,” said Thomas dur­ing the pan­el dis­cus­sion.

Thomas agreed with Sir­ju-Ram­nar­ine in her as­sess­ment that the es­tab­lish­ment of projects like Lara and NGC Green were in­deed “a state­ment of in­tent” by the T&T gov­ern­ment to take the tran­si­tion se­ri­ous­ly.