Home' Trinidad and Tobago Guardian : February 4th 2016 Contents FEBRUARY 4 • 2016 www.guardian.co.tt BUSINESS GUARDIAN
NEWS | BG5
The drastic reduction in the
country s revenue over the
last two years must force
policymakers to come up
with innovative ways to create new sources of
revenue, said Conrad Enill, former Energy Min-
ister and faculty member of the Arthur Lok Jack Graduate
School of Business.
Enill said the reduced revenues that the Government is col-
lecting now is not what the country has become accustomed
to and he raised the question about the consequences that lie
"The importance of energy to the economy of T&T should
be a concern to all. The sector plays a dominant role in export
preferences, gross domestic product (GDP) and foreign direct
investment (FDI). Between 2010 and 2020, the over-60 pop-
ulation is going to grow by about 69,000. If you think we had
problems before, this is going to create some challenges in the
context of how we are going to create growth and all the things
we have grown accustomed to," he said.
He spoke last week Wednesday at a seminar entitled, The
Future of Renewable Energy In a Recession Economy, at the
Arthur Lok Jack Graduate School of Business, Mt Hope.
Enill gave the definition of recession as a period of temporary
economic decline during which trade and industrial activity
are reduced, generally identified by a fall in GDP in two suc-
However, he added that this definition ignores any changes
in the unemployment rate or consumer confidence.
Also, by using quarterly data, this definition makes it difficult
to pinpoint when a recession begins or ends. This means that
a recession that lasts ten months or less may go undetect-
ed.He pointed to government data and said when one looks
at the estimates presented in September 2015, expenditure as
a country was $63 billion to be paid for by revenue of $40
billion, dividends of $8 billion, sale of assets $9 billion and
borrowings of $6 billion.
He questioned how sustainable the situation is.
"The first issue to treat with is if
in 2016 the Government will be able
to repeat this in 2017 and 2018, espe-
cially the dividends, sale of assets and
borrowings," he said.
According to information he provided, oil companies in
2014 provided tax dollars of $16 billion and, in 2016, it could
decline to just over $3 billion.
"That is where the beginning and continuation of our slight
challenge lies. The point is price is a major contributor but
it is not the only one as there are issues around production,
price and fiscal incentives."
He listed other challenges from the Global Competitiveness
Index which include: an inefficient government bureaucracy,
crime and theft, poor work ethic in the national labour force.
Despite challenges, he believes T&T can do well and there
are examples internationally.
Enill said following the 2008 financial crisis a lot of companies
were forced to adjust to a dramatically different business
He added several thrived by resisting the customary corporate
reflex to contract, defying convention by carving out unusual
Having said this, he gave several positive features one can
take from an economic downturn. These include that com-
petition may be less intense, it may be easier to get qualified
staff and costs may be lower.
Enill said of the 30 companies that currently comprise the
Dow Jones Industrial Average, 18 were founded during recessions
"There is evidence to suggest that good things happen, even
Looking into T&T s future and possible diversification, Enill
said there are benefits to renewable energy. These include
reducing reliance on fossil fuels, curbing global warming,
improving air quality, adding good jobs to the economy and
protecting environmental values such as habitat and water
He defined renewable energy as energy that is collected from
resources which are naturally replenished on a human timescale,
such as sunlight, wind, rain, tides, waves, and geothermal heat.
Renewable energy often provides energy in four important
areas: electricity generation, air and water heating/cooling,
transportation, and rural (off-grid) energy services.
"As the world moves in recognition of the challenges of that
faces the environment, these issues are becoming more and
more important," he said.
He referred to the present Government s manifesto on renew-
able energy which states:
"Maximise, where practicable, the use of renewable energy
(such as solar, wind and wave energy) through incentives,
concessions and enabling legislation, and make reduction of
T&T s carbon footprint a priority by setting appropriate renew-
able energy production targets, as has been done in the European
Union, where EU countries have been mandated to achieve
a target of 20 per cent of energy production from renewable
energy sources by the year 2020."
Enill continued by saying that renewable energy as a feature
of the country s future energy mix is supported by the policy
position of the government and this decision has already been
made and will allow institutions and businesses to implement
an agenda for achieving the targets.
AN INEFFICIENT NATION
Former Energy Minister Kevin Ramnarine---who also gave
a presentation during the seminar---said T&T is one of the
world s least energy efficient countries.
During his presentation he used a graph with statistics from
the World Development Indicators---the World Bank s data-
base---which shows the GDP per unit use of energy of countries
around the world. He said this measures energy efficiency and
says how efficiently it is converting a unit of energy into a
unit of GDP.
T&T is the least energy efficient country of the 133 countries
on its database. Hong Kong was rated as the most energy effi-
"When I looked at this data five or six years ago I knew
T&T was close to the bottom but I did not know we graduated
to the bottom of the scale. T&T, according to World Bank
data, is the least energy efficient country."
However, he said the data could be "misleading" as a country
like Chad would be graded as more energy efficient as they
have a small GDP and do not use much energy at all.
"Generally, the data tell us that something is wrong with
our relationship with energy. This has to do with the energy
we use in the confines of T&T. It says we are using energy
in a very inefficient manner."
He also said electricity is subsidised in T&T though not
"It is subsidised because of the price that T&TEC pays to
National Gas Company (NGC) for natural gas. T&TEC procures
natural gas from the NGC on behalf of the independent power
providers in T&T."
He said when he drives into Port-of-Spain at nights and
sees all the buildings in Port-of-Spain with their lights on,
this is an example of inefficiency and waste of energy.
"When you drive into Panama City at night there are many
sky scrapers but they are all dark as no one in the buildings.
We waste energy in T&T. Every time you turn off your light
at home that is not supposed to be on, you are saving the
country natural gas."
According to Ramnarine, T&TEC s average tariff is around
US $0.06 per kWh vs the rest of the Caribbean which is
US$0.34 per kWh.
He said the tariffs in T&T are lower because of low cost
of natural gas and that NGC sells natural gas to T&T at a
lower price than it could earn by selling to methanol and
ammonia plants. He gave information from the IMF s Energy
Subsidy Reform report in 2013 which shows that the fund
estimates that T&T lost revenue from these sales of natural
gas totals about US$1 billion annually.
He attributes this waste to T&T having cheap energy available
to private citizens and businesses.
"The subsidisation of energy has created tremendous inef-
ficiencies in this economy, which has an serious impact. In
a time of recession, the best approach would be to drive the
economy towards more efficiency."
vital in times
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