A Unique Approach for Sustainable Energy in Trinidad and Tobago
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A Unique Approach for Sustainable Energy in Trinidad and Tobago Natacha C. Marzolf Fernando Casado Cañeque Johanna Klein Detlef Loy Government of the Republic of Trinidad and Tobago MINISTRY OF ENERGY AND ENERGY AFFAIRS Government of the Republic of Trinidad and Tobago Ministry of Energy and Energy Affairs A Unique Approach for Sustainable Energy in Trinidad and Tobago Natacha C. Marzolf Fernando Casado Cañeque Johanna Klein Detlef Loy Inter-American Development Bank Cataloging-in-Publication data provided by the Inter-American Development Bank Felipe Herrera Library A Unique Approach for Sustainable Energy in Trinidad and Tobago/ Natacha C. Marzolf, Fernando Casaquo Cañeque, Johanna Klein, Detlef Loy. p. cm. — (IDB Monograph; 382) Includes bibliographic references. 1. Renewable energy sources —Trinidad and Tobago. 2. Energy policy— Trinidad and Tobago. 3. Power resources—Trinidad and Tobago. I. Marzolf, Natacha C. II. Casaquo Cañeque, Fernando. III. Klein, Johanna. IV. Loy, Detlef. V. Inter-American Development Bank. Energy Division. VI. Series. IDB-MG-382 JEL Codes: Q4, Q42 and Q48 Keywords: Trinidad and Tobago, renewable energy, energy efficiency, energy policies, carbon dioxide emissions. Copyright © 2015 Inter-American Development Bank. This work is licensed under a Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives (CC-IGO BY-NC-ND 3.0 IGO) license (http:// creativecommons.org/licenses/by-nc-nd/3.0/igo/legalcode) and may be reproduced with attribution to the IDB and for any non-commercial purpose. No derivative work is allowed. Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB’s name for any purpose other than for attribution, and the use of IDB’s logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license. Note that the link provided above includes additional terms and conditions of the license The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Boards of Directors, or the countries they represent. Inter-American Development Bank 1300 New York Avenue, N.W. Washington, D.C. 20577 www.iadb.org Acknowledgements iii Acknowledgements The Government of the Republic of Trinidad and Tobago (GoRTT) is in the process of devel- oping a Sustainable Energy Program (SEP), which aims to manage its natural resources in a more sustainable way, enhancing the use of Renewable Energy (RE) and Energy Efficiency (EE). As part of this process, the Inter-American Development Bank (IDB), who is supporting the SEP through a policy loan, has commissioned the consortium of the Centre of Partnerships for Development (CAD), Projekt Consult and LKS Ingenieria to develop consultancy services in order to support the implementation of the SEP. The following report is a summary of the major results of this project. This report would not have been possible without the valuable contribution of a wide range of stakeholders in Trinidad and Tobago. Especially, the RE and EE team of the Ministry of Energy and Energy Affairs (MEEA) of Trinidad and Tobago, under the leadership of Randy Maurice and Anita M. Henkey, who provided continuous support and input in the preparation of this report. In addition, the local consultancy firms, Energy Dynamics Limited, Smart Energy and TISSL, have provided valuable input with regards to the implementation of energy audits throughout the process. We also would like to extend our special thanks to the following experts that have authored different chapters of the report, Jochen Anrehm, Lauren Mia Britton, Andrew Ferdinando, Alvaro Galletebeitia Arruza, Indra Haraksingh, Lander Jimenez Ocio, Christoph Menke, Herbert Samuel and Werner Siemers, as well as its two editors and project managers, Johanna Klein and Detlef Loy and its project director, Fernando Casado Cañeque. Lastly, we would like to thank IDB’s Energy Division for the leadership they are adopting promoting a more sustainable energy environment in Latin America and the Caribbean, especially Natacha C. Marzolf, who directed this monograph, Christiaan Gischler, Edwin Malagón and Anaitee Mills. About CAD CAD (Centre of Partnerships for Development) is a network of international experts special- ized in international development, local economic development and public-private partner- ships, with a focus on Green Economy and Sustainable Energy, SMEs in developing countries, entrepreneurship, Base of the Pyramid and Monitoring and Evaluation tools and methods. About Projekt Consult Projekt Consult is engaged in the management and execution of projects in international co- operation programs. Prime emphasis is given to the promoting environmentally-sound work procedures and participatory approaches, as well as the application and transfer of needs-ori- ented technology acceptable to the community. Projekt-Consult GmbH, working in close co- operation with donor agencies and project partners, has developed comprehensive solu- tions which correspond to the particular socio-economic, cultural and ecological situation. About LKS Ingenieria LKS is an international engineering and consultancy cooperative which provides strategic ad- vice, project assessment and project development expertise in various areas including sus- tainable development in which it has experts in renewable energies, energy efficiency and climate change. Contents v Contents ABBREVIATIONS AND ACRONYMS ix 1. EXECUTIVE SUMMARY xi 2. INTRODUCTION 1 2.1 Limitations of the Report 2 3. BASELINE FOR ELECTRICITY GENERATION AND CONSUMPTION 5 3.1 Objective and Scope of the Baseline 5 3.2 The Trinidad and Tobago Energy Matrix 5 3.3 Natural Gas and Diesel Oil (Final Use) applied for Electricity Generation 7 Annual Domestic Consumption of Natural Gas and LNG Export 7 Annual Consumption of Oil 9 Projections of Natural Gas for Electricity Generation 12 3.4 Type and Generation Efficiencies of Existing and Future Power Plants 16 Projected Type and Generation Efficiencies of Power Plants 18 3.5 Longer-term Development of Power Generation Capacity 19 3.6 Peak Loads and Peak Demand 21 3.7 Past and future Development of CO2 Emissions in the Power Sector 22 Development of past CO2 Emissions in the Power Sector 22 Estimated near-term Development of CO2 Emissions (Baseline Scenario) 23 3.8 Typical Daily Load Curves 26 3.9 Transmission and Distribution Grid and Plans for Reinforcement or Extension 28 3.10 Electricity Generation Costs 31 3.11 Conclusions of baseline study 33 4. ENERGY POLICY 35 4.1 Main actors 35 Ministry of Energy and Energy Affairs (MEEA) 35 T&TEC and Independent Power Producers 37 4.2 Legal and Regulatory Framework and Supporting Policies 40 Status quo of the regulatory framework 40 Amending of the Trinidad and Tobago Electricity Commission Act and the RIC act 41 Targets for RE 42 4.3 Input to the Green Paper 45 4.4 Electricity Tariffs and Subsidy Schemes 45 Tariff Schedule 45 A Unique Approach for Sustainable Energy in Trinidad and Tobago vi 4.5 Adaptation of criteria for using the Green Fund 49 4.6 Financing of SEP projects 49 4.7 Needs for capacity building and institutional strengthening 52 5. ENERGY EFFICIENCY 55 5.1 Energy Efficiency Potential 55 Which Technologies have Potential? 56 The Viability of Energy-saving Technologies 56 How is Uptake to be encouraged? 60 A note on Behavior 61 5.2 Proposed EE Programmes 62 Residential Sector 62 Hotel Sector 68 Commercial & Small Industrial Sector 72 Government 75 5.3 Energy Efficiency Action Plan & Budget 82 Existing Activities 82 Energy Efficiency Targets, Action Plan and Budget Plan 82 5.4 Energy Policy measures with regards to EE 82 General recommendations for EE Policies 82 Proposed Trinidad and Tobago Energy Agency 89 5.5 ESCO Certification Committee 91 Background 91 5.6 Energy Audits 92 Building selection methodology 92 Auditor selection 95 Audit support 95 Guidelines for Energy Audits 96 Results of the Auditing Process 97 Shortcomings and Conclusions of the Auditing Process 99 Next Steps 102 6. RENEWABLE ENERGY 105 6.1 Establishment of mechanisms for feeding energy into the grid 105 Feed-in Tariffs 105 Net-Metering 109 Net-Billing 110 Competitive Bidding 111 Renewable Portfolio Standards 111 The Development of Power Purchase Agreements 114 6.2 Generation Costs for Onshore Wind Farms and Small-scale PV Systems 115 Levelized Cost of Energy (LCOE)—Background 115 Contents vii Wind Power 116 Photovoltaics 126 6.3 Offshore Wind Energy 137 Status of offshore wind energy 137 Costs of offshore wind power 138 Offshore wind power and risks of hurricanes 139 Environmental impact 139 Offshore location availability 140 Conclusions and recommendations 140 6.4 Potential for Solar Water Heating 141 Introduction 141 Solar Resources 143 Technology of Solar Water Heaters 148 Consumption of Hot Water 150 Costs 153 Cost Comparison 153 Environmental Benefits 154 Current Fiscal Incentives for SWH 157 Barriers and Recommendations 157 Potential and Opportunities for Local SWH Manufacturing 160 Capacity Building 160 Standards for SWH Systems in T&T 161 Conclusions 163 6.5 Waste to Energy (WtE) 163 Limitations of this Chapter 164 Current Situation of Waste Management in Trinidad 164 Investigated Technologies 171 Suggested Technology 174 Economic Feasibility of WtE 177 Current Obstacles for the Implementation of WtE projects 181 Suggested Implementation Strategy 182