In a recent analysis, it was noted that 11 per cent of T&T’s current natural gas production is used for domestic electricity generation. This is an increase from 8 per cent to 11 per cent, despite a sharp decline in overall gas production from 4.2 bcfd in 2013 to 2.4 bcfd in 2024. This indicates minimal progress in energy conservation or efficiency within the electricity sector, despite declining resources.
To optimise our natural gas revenue, we should set a hypothetical target: replace 50 per cent of natural gas used in electricity generation with renewable energy, redirecting the saved gas to the petrochemical sector and LNG plants. This could generate an estimated US$200 million in additional foreign exchange annually, stimulate the renewable energy sector and lay the groundwork for a green hydrogen industry.
However, while much attention has been given to production, there is untapped potential on the demand side. Optimising natural gas usage requires a dual approach—addressing both supply and demand. In this commentary, I would like us to build on the theme of optimising the use of our natural gas by delving deeper into the demand side, via energy conservation and energy efficiency initiatives.
Energy efficiency and energy conservation are buzzwords used by many of us, but what exactly do they mean?
Energy conservation involves behavioural changes to reduce energy use, such as switching off lights and unplugging appliances.
Energy efficiency, on the other hand, focusses on using advanced technology to perform the same functions with less energy—for example, replacing incandescent bulbs with LED lighting or upgrading to energy-efficient appliances.
Successive governments have maintained a policy of subsidising electricity prices, in an attempt to distribute the wealth generated by our natural resource to every citizen, and also to stimulate the manufacturing and industrial sectors in the country.
As a result, T&T’s rates are among the lowest in Latin America and the Caribbean. The long-term sustainability of these subsidies is now under review by the Regulated Industries Commission (RIC).
I expect that the government, in its wisdom, will consider multiple factors in taking any decisions to adjust the policy and rates.
Apart from political expediency, the government will consider the competitiveness of T&T’s rates versus the increasing natural resource output of neighbouring Guyana, which could affect T&T’s status as a low-cost energy destination. Whatever the outcome of that policy decision, implementing energy efficiency and conservation measures could significantly benefit this country.
Government ministries and state enterprises spend approximately $1.2 billion annually on electricity, with a debt to T&TEC of $2 billion, as was recently reported in Parliament.
Using simple arithmetic, the age of the accounts receivable from government to T&TEC is approximately one year, eight months. By adopting conservation and efficiency initiatives, the government could reduce this financial burden, free up resources for critical infrastructure and redirect natural gas for export, thereby generating foreign exchange.
Additionally, energy efficiency and energy conservation initiatives could jumpstart and stimulate a new industry in T&T, generating meaningful employment for our recent graduates and the population at large. Energy efficiency and energy conservation initiatives also play a significant role in reducing CO2 emissions.
I recall in a recent study conducted on one of the waterfront towers, it was estimated that the electricity usage by the tower at its lowest point during the night, when unoccupied, was equivalent to the energy used by a similar building in Jamaica at peak capacity during the midday period. That report illustrated that the potential for energy conservation and energy efficiency in T&T is indeed substantial.
In another report by a highly diverse team of professionals with backgrounds ranging from academia to the energy sector, it was estimated that a comprehensive focus on these initiatives could result in a targeted reduction in energy demand in the vicinity of 2954GWh in the first five years and 8864GWh over 10 years.
This could result in savings of 29 billion to 89 billion cubic feet of natural gas over a 5-to-10-year period, which, if redirected to the market, has the potential to generate $2.5 billion or US$350 million in gas revenue. It was also estimated that this industry could potentially generate 4,000 new highly skilled jobs and reduce our CO2 impact on the environment by 6 to 18 million metric tons over a 5 to 10-year period.
At a time when we are exploring both adaptive and mitigating initiatives to deal with the effects of climate change, in keeping with our commitment to the Paris Accord agreement to reduce CO2 emissions by approximately 100 metric tonnes by 2030, this initiative alone takes us to almost two per cent of that target.
In business you seldom arrive at a win-win situation. In this scenario however, investing in energy efficiency and conservation can deliver a rare “win-win-win” scenario—economic savings, job creation and environmental benefits.
The countrywide benefits in adopting energy conservation and energy efficiency initiatives are tremendous. Like all other initiatives recommended in the aforementioned report however, significant investment and commitment are also necessary.
The estimated cost of implementing these initiatives ranges from $1.4 billion to $2.7 billion. While substantial, this investment is justified by the projected returns in natural gas revenues, job creation and environmental benefits. This expenditure is not expected to be shouldered by the government alone but by a combination of government incentives, private sector contributions, the Green Fund, concessionary financing and leveraging international grants designed for countries pursuing sustainable energy transitions.
Energy efficiency and conservation offers tremendous potential for Trinidad and Tobago—not just as a solution to resource constraints, but as a pathway to economic diversification and environmental responsibility.
With strategic investment and commitment, our country can maximise its natural gas resources while laying the foundation for a sustainable energy future.
As with all impactful initiatives however, there is a gestation period and as such we need to move now to derive optimal benefits in the short to medium term.
