Cheap electricity causes $325M loss

NGC President, Mark Loquan, revealed the significant sum while speaking at the opening ceremony of the Energy Chamber’s Clean Energy Conference, held yesterday at the Arthur Lok Jack Graduate School of Business, Mt Hope.

“The low-price advantage for electricity assumed a supply of royalty gas to the Government; that was stopped in September 2016.

While there has been no change in supply for power generation, NGC has had to fund the subsidy.

The estimated value of lost revenue to NGC is US$50 million/TT$325 million per annum.” Loquan warned, “In the absence of new commercial arrangements, by 2020, the cumulative value foregone could be as much as TT $2 billion.”

Making indirect reference to TT’s current fiscal shortfall, he asked, “Is this the best use of our resources? Would the country not benefit more if our gas was sold for commercial use, with the real value captured as dividends, taxes and re-invested funds?”

Unlike their regional counterparts, some industries in TT pay as little as US $0.02 per kilowatt of electricity. This, Loquan reminded, “comes in no small part from a fairly reliable supply of very cheap electricity.”

In addition to there being no real incentive to switch from the “clean energy” of natural gas to renewable energy such as solar and wind power, Loquan said many consumers are “unaware of the true economic cost of electricity and the commercial arrangements that allow our power generators an unlimited supply of gas; at no direct expense to them, (so) there is even less incentive to pursue energy efficiency in a meaningful way.”

Government has set a target of ten percent renewable power generation by 2021. Prime Minister Dr Keith Rowley, addressing business groups in Chile last week, said, “This will require the development of around 150 MW of renewable energy resources.”

Loquan argued that if TT is to “resolve this issue of seeming inertia” regarding the switch to renewables, people’s mindset has to change.