Black Immigrant Daily News
Energy Minister Stuart Young, from left, Energy Chamber CEO Dr Thackwray Driver, NGC president Mark Loquan and bpTT president David Campbell at the Energy Chamber conference, Hyatt Regency, Port of Spain. Photo by Sureash Cholai
THE Prime Minister is seeking coastal locations for wind farms around TT as he pushed a mix of renewable energy, hydrocarbons (oil and gas) and green hydrogen, addressing the Energy Conference hosted by the Energy Chamber at the Hyatt Regency in Port of Spain on Monday.
Noting global uncertainties over energy demand, production and price, Dr Rowley vowed a balanced approach to managing TT’s energy resources, declaring, “as a Government we are doing our part.”
He cited the findings of Government’s Roadmap for a Green Economy launched last November with the IDB and National Energy.
“Of all the potential renewable energy sources in TT, offshore wind offers the largest potential for the country with a projected output of approximately 25 gigawatts of levelised energy. The initial goal of the roadmap is the establishment of a wind pilot project, demonstrating visible end-use applications of green hydrogen in TT.” Green hydrogen burns to produce just water and carbon dioxide as end products and it is “green” if it’s production by the splitting of water molecules (by hydrolysis) is powered by renewable energy such as sunlight, known as solar power.
“Towards this end, the Ministry of Energy in collaboration with National Energy and the European Union will be conducting a National Wind Resource Assessment, to identify potential sites for wind farm development in TT.”
Rowley gave figures to suggest TT as an energy producer has had a good past year with good production levels of hydrocarbons alongside high global prices for oil, gas and petrochemicals. However the future was a bit more complex with predictions of a high demand for energy, yet at lower prices.
Rowley said the US Government’s Energy Information Agency (EIA) has predicted a 50 per cent rise in global energy use by 2050, largely from Asia.
He said the global energy supply now included 27 per cent liquid fuels (crude oil derivatives), 27 per cent renewables, and 22 per cent natural gas, (with the remainder presumably nuclear power and coal.) The World Bank, he said, predicted global growth will fall from 2.9 per cent in 2022 to 1.7 per cent in 2023.
Prime Minister Dr Keith Rowley, second from left, visits one of the many booths on display by energy-sector companies at the TT Energy Conference, Hyatt Regency, Port of Spain on Monday. Photo by Sureash Cholai
Likewise, the IMF predicted a drop from 3.2 per cent in 2022 to 2.7 per cent in 2023.
Rowley said global volatility in energy prices had reduced energy revenues within TT’s GDP from 46.8 per cent in 2011 to 26.8 per cent in 2021., but expected to rise to 33.7 per cent for 2022 due to new major upstream projects and buoyant prices.
“However for 2023, the outlook is not as buoyant as oil and gas prices are predicted to be average to moderate, due to the global economic slowdown, tight hydrocarbon markets and OPEC’s conservative production strategy.”
He said the EIA predicted the WTI oil price will fall from US$95 last year to US$77 this year, and the Henry Hub gas price to drop from US$7.42 per MMbtu to US$4.90 per MMbtu.
Rowley said Atlantic LNG has moved away from using Henry Hub and Spanish market prices, to earn more revenue for TT. Government renegotiations of energy contracts across the whole value chain have brought higher earnings at the upstream, midstream and downstream. “Had these negotiations not been successful, given the lower production volumes, and the initial lopsided sharing of benefits then it is easy to calculate the dire consequences for the national revenue streams which we would have been experiencing at this time.”
Rowley said TT’s petrochemical producers had weathered tough economic conditions, but noted predictions of falling global prices.
The ammonia price had moved from US$226 per tonne in mid-2020 to US$1,300 in early 2022, but was now predicted to fall from US$995 to US$445 from the first to third quarter this year.
Likewise, he said the methanol price moved from US$148 per tonne in mid-2020 to US$437 in late 2021, but then fell as supply exceeded demand, now predicted to reach US$298-US$328.
He congratulated NGC for ensuring a gas-supply to these downstream producers, via the execution of 29 upstream contracts (gas producers), 97 downstream contracts (gas users) and the resolution of “failure to supply gas” claims amounting to over TT$8 billion.
The PM said even with efficiency, energy demand was expected to rise 50 per cent by 2050. “All sources of energy are needed,” he said, citing predicted global population growth from eight to ten billion people. However he noted the cost of producing renewables had risen due to rising commodity, energy and shipping prices.
He said a 112 megawatt solar park would be built from the first quarter 2023 to the fourth quarter in 2024, to supply eight per cent of TT’s power needs, of which 30 per cent were to be renewables.
“It is the Government’s stated objective to increase power from renewables to meet 30 per cent of the country’s requirements.”
Rowley has challenged the ministry to quickly get more renewable energy projects on stream.
He said TT’s power needs will rise from 1400 MW in 2022 to 1600 MW by 2032. “During this period the PPAs (power purchase agreements) of two of the country’s major independent power producers representing 40 per cent of the country’s installed generation capacity are due to expire. We therefore have an opportunity to achieve much of the target of 30 per cent of power from renewables.”
Rowley promised incentives for renewable energy producers, known as a feed-in tariff, where a utility provider guarantees a certain payment for each unit of electricity it gets from the producer.
“In the near future we, in TT will be introducing feed-in tariff legislation as part of our strategy to encourage low carbon power generation technologies and renewable energy generation.”
Yet, he said the shift to carbon neutrality “was not a spontaneous event” due to challenges such as the cost, reliability and stability of renewables, even as fossil fuels remain cheaper.
He said many countries, including TT, pursue an energy mix.
“In the current global energy scenario our policy is to take a measured approach to the energy transition.
“In this regard we will be pursuing the accelerated exploration and development of our hydrocarbon resources as we transition to a lower carbon economy.”
He noted the past deepwater, ongoing onshore and pending shallow-water bid rounds for hydrocarbon exploitation. “The success of the recent bid-round is a testimony to policies introduced by Government, including constant engagement with stakeholders, to encourage upstream investment both onshore and offshore and the confidence of industry participants in the geological prospects of the TT provenance.” He hoped to maintain the momentum of exploration by improved fiscal incentives and acreage availability.
“Accordingly, we will continue the dialogue with upstream companies on the incentives required to stimulate activity for the exploration of upstream resources.”
The PM surmised the global energy sector was undergoing transformational change.
“The combination of price volatility, the uncertainty for future oil and gas markets and the push for de-carbonisation and other climate control efforts has created a complex energy future.”
“It is a challenging period which will require a clear vision, astute management and the seamless integration of mixed fuel systems. “
Saying “transformation is not a single event but a journey,” he said it was best managed by stakeholder collaboration.