The Caribbean Association of Industry and Commerce (CAIC) and the Private Sector Organisation of Jamaica (PSOJ) recently completed a project to promote best practices in environmental and energy management for enhanced competitiveness and profitability for Caribbean businesses, while preserving the environment and reducing the carbon footprint of commercial operations. This project involved several components, which included awareness building and training; energy and environmental audits for private sector companies; and policy and legislative assessments, among other aspects. This project culminated in July 2011 with a regional conference entitled, Business Implications of Energy and Environmental Management in the Caribbean, which was held in T&T. The conference represented an opportunity for regional stakeholders and leading private sector representatives from around the Caribbean to meet to discuss common strategies and to map the way forward. The Energy Chamber was an active participant in this project, through our membership of the CAIC, and many of our member companies took part in training sessions and audits. We welcomed the opportunity to be part of this project, including a fact-finding mission to Belgium and the United Kingdom, and welcomed the opportunity to share some our views and opinions on the development of renewable energy in the Caribbean and the role of T&T
Energy inefficient economies
T&T's hydrocarbon resource and, in particular, its natural gas, has enabled it to become the most industrialised Caribbean nation. Given the maturity of the energy sector in T&T, its natural resources are supported by a large number of skilled and well-trained people. There are large numbers of service companies which provide support services to the major producers, these companies are highly experienced and have attained world-renowned reputations. With current technology, gas-fired power stations produce the cheapest electricity globally. In some circumstances, hydro-electricity can compete, though projects involve very large up-front capital costs. T&T's electricity is almost exclusively produced from natural gas and, hence, is amongst the lowest cost electricity in the world. In contrast, other countries in the Caribbean are very reliant upon diesel/fuel oil for their electricity generation; one of the most expensive way of generating electricity. Furthermore, economies of the region tend to be highly energy inefficient (measured in terms of units of energy consumed to units of wealth created), with T&T being especially energy inefficient. The majority of countries in the region are reliant upon imported fossil fuels for most of their energy needs and high international energy prices are placing a significant strain on the economies of the region. Suriname is the only significant exception, with hydro-electricity dominating its electricity generation sector. Given the high prices of electricity generation, most Caribbean nations have been actively exploring alternative sources of energy, including increased natural gas exports from T&T to other islands.
Alternative energy sources
Given the low price of electricity in T&T, major grid applications of renewable energy electricity generation are very unlikely in the medium term. The high cost of alternative sources of energy, at the current time, means that they are unlikely to be viable without government subsidies, or, at the very least, the removal of subsidies from hydrocarbons-based power sources. There are, however, markets on our doorstep with high cost electricity. In these markets, diesel/fuel-oil generated electricity could be very economically replaced by renewable energy sources. T&Ts renewable energy strategy should, therefore, be developed on a Caribbean-wide basis with an emphasis on deployment of technologies in other territories. Given the fact that our economy is reliant upon a depleting resource, the experience that T&T companies gain in other Caribbean markets could eventually be used in the domestic market, if natural gas is no longer available. To develop renewable energy in the Caribbean, T&T should use its cheap electricity to manufacture inputs into renewable energy projects (for example, photovoltaic panels). The work being done by SiTeck and presented to the Energy Chamber at a recent energy luncheon, indicated that the manufacture of these components holds great potential for revenue generation and downstream business development. The study indicates that the solar photovoltaic industry is one of the fastest growing industries in the world and that sustainable jobs can be created across the value chain.
Financing renewable energy projects
T&T should also use available capital from the domestic market to invest into renewable energy projects in other Caribbean countries. At times international financing for Caribbean countries can be difficult to access. Countries in the region should also develop a strong and transparent legislative and regulatory framework for the promotion of investment in the energy sector. The emphasis on developing renewable energy and energy efficiency projects in other Caribbean countries also fits in with the strategy of increasing the export of energy services as a way of diversifying the economy. Increased emphasis should be placed on the energy services sector at both the level of Caricom and by national governments. Energy services are required at each step of the energy process from the location of the potential energy source to its distribution to the final consumer. Services constitute the value added in the energy chain. In a country such as T&T, where there is subsidised fuel and cheap electricity, there are more opportunities for the provision of energy services and the development of expertise, research and development of new technology. This expertise developed should be exported to other Caribbean countries in areas of renewable energy. It is important to recognise that there is a demand for energy services across the entire region, but that this demand is different in different markets. Demand for energy services relating to renewable energy is likely to remain high in every country of the region, other than in T&T. There is also significant potential for demand in areas like energy efficiency consultancy services and insulation.