Contact Magazine April 2018

transforming t&T
2016 2017
Renewable Energy
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2013
2014
2015
2016
Caribbean Sustainable Energy Roadmap and
Strategy (C-SERMS) RE goal:
20% by 2017
28% by 2022
47% by 2027
“Renewable sources of energy are the way forward”
– Robert Le Hunte, Public Utilities Minister, January 2018
T&T RE goal:
2017
10% by
2021
Return on investment
While minister Khan is happy about
all this, he is not so pleased about the
amount of revenue the government
gains from this output. The government,
he says, is therefore “reviewing the
taxation system and the suite of
allowances available to oil and gas
companies.”
This process began with the royalty
rate on production, which was raised to
12.5% in January. Other tax changes
will be announced in due course.
The minister has reassured the
industry that “the government is
receptive to, and welcomes, foreign
investment” – but with the caveat that
“there must be an equitable sharing of
revenue earned from the exploitation
of our hydrocarbon resources.”
The UK’s Poten and Partners, in its
Gas Master Plan report, highlighted the
“great disparity in value”, as minister
Khan put it, “between that which the
government received, as compared to
that received by energy companies and
their affiliates from the monetisation of
the country’s hydrocarbon resources.”
He gave as a sterling example the
revenue impact of the liquefied natural
gas (LNG) trains in Point Fortin. The
“potential value loss from the four LNG
“There must be an equitable
sharing of revenue earned
from the exploitation of our
hydrocarbon resources”
trains averaged around US$6 billion a
year between 2011 and 2014, which is a
staggering figure,” he explained.
Poten and Partners found that
“the beneficiary of the substantial
value generated by the trains was not
so much the upstream gas suppliers
but rather the offshore jurisdictions,
which were either low-priced markets
or high-priced markets, but with the
revenue not flowing back to Trinidad
and Tobago.”
In the majority of transactions,
it was found that “the offtake
arrangements for upstream companies
involved sales to downstream marketing
affiliates, which potentially led to nonarm’s
length transactions.”
Renewable energy
As far as renewable energy (RE) is
concerned, Trinidad and Tobago has
been a late convert. Minister Khan
acknowledges this. “Trinidad and Tobago
recognises the benefits that would
accrue from the diversification of its
energy mix” – but he points out that
it is “the only country in the western
hemisphere that generates 100% of its
power from natural gas, the cleanest of
the fossil fuels.”
A target of 10% of RE in power
generation by 2021 has been set.
According to the minister, a
“suitably qualified international firm,
together with a joint venture local
partner, will be required to design,
build, operate, maintain and fund RE
projects greater than, or equal to, 3MW
for grid integration.”
RE comes basically from the sun
and the wind, but there is also the more
esoteric waste-to-energy approach.
Once there is a landfill, waste-to-energy
becomes a possibility. The minister
confirms that “expressions of interest
have been issued for the development
of a waste-to-energy facility at the
Beetham Landfill for the conversion of
municipal waste for power generation.”
Trinidad and Tobago is a signatory
to the Paris climate change agreement,
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Trinidad
and Tobago Chamber
of Industry and Commerce
www.chamber.org.tt/contact-magazine