Dix­ie-Ann Dick­son

Re­new­able en­er­gy ex­perts may soon be able to have open ac­cess to the T&T Elec­tric­i­ty Com­mis­sion (T&TEC) grid, which was one of the ma­jor lim­i­ta­tions to the growth of al­ter­na­tive en­er­gy sec­tor. The Gov­ern­ment is seek­ing to es­tab­lish a leg­isla­tive frame­work for the re­new­able in­dus­try, which would in­clude amend­ing acts that gov­ern the Reg­u­lat­ed In­dus­tries Com­mis­sion (RIC), T&TEC and Elec­tri­cal In­spec­torate Di­vi­sion (EID). Randy Mau­rice, se­nior plan­ning of­fi­cer, Min­istry of En­er­gy and En­er­gy Af­fairs, made the state­ment on Thurs­day at a sem­i­nar at last week's Trade and In­vest­ment Con­ven­tion (TIC), which was held at the Hy­att Re­gency Trinidad ho­tel, Port-of-Spain.

The theme of the sem­i­nar was busi­ness op­por­tu­ni­ties in re­new­able en­er­gy: so­lar pan­el, so­lar wa­ter heat­ing and en­er­gy sav­ing com­pa­nies. Mau­rice said a team-led by the Min­istry of Pub­lic Util­i­ties and in­cludes the Min­istry of En­er­gy and En­er­gy Af­fairs-is cur­rent­ly un­der­tak­ing a re­view of the T&TEC, RIC, EID Acts. The leg­is­la­tion in con­nec­tion with the var­i­ous acts would in­clude open ac­cess to the T&TEC grid, in which T&TEC has sole au­thor­i­ty, grid in­ter­con­nec­tion, feed-in tar­iff, which would al­low for in­te­grat­ed re­new­ables, net me­ter­ing and net billing. De­spite the in­ter­est shown by many com­pa­nies, Mau­rice said the pri­vate sec­tor has to take the lead role in the re­new­able en­er­gy in­dus­try, while en­sur­ing they have ded­i­cat­ed fi­nanc­ing. He called on fi­nan­cial in­sti­tu­tions, such as banks, to play an in­te­gral role in fa­cil­i­tat­ing such projects.

Prob­lems with in­cen­tives

Mau­rice said there were some is­sues re­gard­ing pro­vid­ing in­cen­tives to en­cour­age in­vest­ment in re­new­able en­er­gy. He said there was am­bi­gu­i­ty with re­gards to the in­ter­pre­ta­tion and ap­pli­ca­tion of the 150 per cent tax al­lowance that Fi­nance Min­is­ter Win­ston Dook­er­an spoke of in the 2010/2011 bud­get.

Un­der the mea­sures to sup­port al­ter­na­tive en­er­gy use in that bud­get, which was ti­tled the En­er­gy Au­dit In­cen­tive, states: "Tax al­lowance on 150 per cent on the cost in­curred by com­pa­nies in the com­mis­sion­ing of en­er­gy au­dits." The fis­cal in­cen­tive un­der the En­er­gy Au­dit fur­ther states that "the al­lowance of 150 per cent of the ex­pen­di­ture in­curred by a com­pa­ny that en­gages as en­er­gy sav­ing com­pa­ny (ES­CO) by the Min­is­ter of En­er­gy, with the re­spon­si­bil­i­ty for en­er­gy. Part of the com­pa­ny's pur­pose is car­ry­ing out an au­dit and the de­sign and in­stal­la­tion of en­er­gy-sav­ing sys­tems.

"It is not re­flect­ing the in­tent of the min­istry that the 150 per cent should be ap­plied to the cost, to en­gage the au­di­tor as well as to im­ple­ment the rec­om­men­da­tions of the au­dit," Mau­rice said. He said the oth­er is­sue was the de­f­i­n­i­tion of ES­CO, which re­lates to whether the au­dit func­tion, should be sep­a­rate from the im­ple­men­ta­tion func­tion. An ES­CO is a con­sul­tan­cy group that en­gages in a per­formed-based con­tract with a client firm to im­ple­ment mea­sures, which re­duces en­er­gy con­sump­tion and costs in a tech­ni­cal­ly and fi­nan­cial­ly vi­brant man­ner. Mau­rice said the Min­istry of En­er­gy rec­om­mend­ed that con­sid­er­a­tion should be to in­sti­tute a cap on ex­pen­di­ture in­curred by the client in im­ple­ment­ing the au­dit rec­om­men­da­tions and peg­ging qual­i­fi­ca­tions for in­cen­tive to per­cent­age en­er­gy sav­ings.

In­vest­ment op­por­tu­ni­ties

William Hinds, a Bar­ba­di­an al­ter­na­tive en­er­gy ex­pert, said giv­en that the re­new­able en­er­gy in­dus­try is very com­pet­i­tive glob­al­ly, T&T has to de­vel­op its knowl­edge on a num­ber of dif­fer­ent lev­els in or­der to make that quan­tum leap to suc­cess. Fel­low en­er­gy ex­pert, James Clif­ford, said the out­side mar­kets are very lu­cra­tive and this is where T&T should be head­ing. He said the glob­al so­lar wa­ter heat­ing mar­ket is worth $1 bil­lion. He stressed that T&T should en­gage in more train­ing, pub­lic ed­u­ca­tion aware­ness and knowl­edge of in­vest­ment. Un­der­scor­ing this view was Mau­rice, who said, T&T was chal­lenged in these ar­eas.

Lo­cal re­new­able en­er­gy ex­pert Ian Boon, man­ag­ing di­rec­tor of DC Pow­er Sys­tems Ltd, said, con­se­quent­ly, these ar­eas can be used as av­enues for in­vest­ment. Boon said there are a num­ber of ar­eas, the pri­vate sec­tor can in­vest, which in­clude dis­tri­b­u­tion, pri­vate in­spec­tor com­pa­nies, train­ing fa­cil­i­ty op­er­a­tors, prod­uct de­vel­op­ment, deal­ers and in­stallers. Boon warned that cheap Chi­nese so­lar wa­ter heater (SWH) prod­ucts are flood­ing the lo­cal mar­ket. He said it would be fool­hardy to try and man­u­fac­ture these prod­ucts as T&T is up against some of the largest Chi­nese man­u­fac­tur­ers of SWH.

But Boon said if T&T is ac­cept­ing the im­por­ta­tion of these Chi­nese SWH prod­ucts, they should be of good qual­i­ty and high stan­dards be­cause it could run the risk of fail­ure and give the in­dus­try a bad name.

T&TEC line ex­ten­sion

Cost of over­head six kilo­me­tre line ex­ten­sion: $510,300

(Ten per cent equip­ment main­te­nance cost: $51,030)

An­nu­al line clear­ing cost: $37,800

An­nu­al main­te­nance cost: $88,830

Ten-year main­te­nance cost: $888,300

To­tal: $1.4 mil­lion

Com­pare to pho­to­volta­ic (PV) sys­tem in­stal­la­tion

An­nu­alised cap­i­tal cost of PV

in­stal­la­tion –$182.7(US$29)/Watt

(Typ­i­cal low in­come h/hold load: 1,000 watts)

To­tal cost of in­stal­la­tion: $182,700

(An­nu­al main­te­nance cost: $18,270)

Ten-year main­te­nance cost: $182,700

To­tal: $0.4 mil­lion

Oth­er ob­sta­cles

• In­suf­fi­cient trained tech­ni­cal per­son­nel

• Avail­abil­i­ty of com­pe­tent sup­pli­ers

• Project fund­ing

• Im­port du­ty on en­er­gy sav­ing tech­nol­o­gy

• Le­gal in­fra­struc­ture

• Util­i­ty mo­nop­o­lies

• Risks of new tech­nol­o­gy