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Navigating the energy transition: Trinidad and Tobago’s path to a sustainable future

Explore Trinidad and Tobago’s journey toward a sustainable future in the energy transition. Learn how the country is balancing economic growth with cleaner energy solutions, policy shifts, and innovation to secure a low-carbon future.

Trinidad and Tobago faces a complex challenge in transitioning to a sustainable energy future while balancing its economic reliance on oil and natural gas. As a small island developing state, the country must navigate the dual pressures of maintaining its petrochemical industry and meeting global commitments to reduce greenhouse gas emissions. According to the State of the Extractive Industries Report 2024 issued by the Trinidad and Tobago Extractive Industries Transparency Initiative, “The T&T energy sector is at a crossroads.

Gas and oil production have declined significantly. Global geopolitical tensions/flashpoints have affected energy prices and trade flows. And, the country has consistently run deficit budgets over the last decade.” But should not the country use this decline in oil and gas revenues as a pathway to more sustainable energy production and consumption?

energy transition
NP gas station station Eastern Main Road, Tacarigua Trinidad and Tobago (Photo source: Wikipedia Commons)

Over the years, Trinidad and Tobago’s economic fortunes were closely tied to the oil, gas, petrochemical, and quarrying sectors. In 2024, the country witnessed a marked decline in energy sector revenue. The October budget revealed that projected oil revenue decreased from TT$16.709 billion in 2024 to TT$14.174 billion for 2025, based on a decreased oil price assumption of US$77.80 per barrel for 2025, down from US$85.00 per barrel in 2024.

Similarly, royalties declined year on year by 33%, and the production sharing contract (PSC) share of profit also declined year on year by 50%. However, in response to these challenges, the government has still actively negotiated a Dragon Gas deal with Venezuela to increase gas supply and held several bid rounds aimed at boosting oil and gas production, such as the PetroJam Limited deal with Jamaica.

Despite the country still focusing on petrochemicals, there is a gradual shift to focus on renewable energy and promote just transitions. In 2023, NGC Green Company Limited was established as a wholly owned subsidiary of National Gas Company of Trinidad and Tobago, helping to institute a cleaner energy future through investment in low-carbon fuels, energy efficiency, sustainable transportation and associated research and development.

Trinidad and Tobago approved an agreement in 2022 to open the Caribbean’s largest utility-scale solar project led through a partnership with BP, Shell, and Lightsource BP. Now set to open in 2025, the Brechin Castle solar project would be the country’s first grid-scale renewable energy project with capacity of 92.22 MW of solar electricity, equivalent to the energy needs of approximately 31,500 households.

Additionally, the country has commissioned recent studies such as the Ministry of Energy and Energy Industries, National Energy and the Inter-American Development Bank, “The roadmap for a green hydrogen economy in Trinidad and Tobago” in 2022 or the Ministry of Energy and Energy Industries, the Ministry of Planning and Development and European Union, “Setting the path for Wind Energy Generation in Trinidad and Tobago” in 2023. While all these studies are important and can provide demonstrative products and pilots, the country is still mindful of balancing the current oil and gas exports with a gradual shift toward sustainable energy while maintaining economic stability.

Sherwin Long, Head of the Trinidad and Tobago Extractive Industries Transparency Initiative Secretariat, emphasises, “there are potential environmental and economic benefits of accelerating the transition to renewable energy. He noted that increasing renewable power on the grid would reduce the country’s carbon footprint and help meet its Paris Climate Agreement obligations.

Economically, replacing natural gas used for power generation with renewable energy would allow the gas to be used for higher-value exports, such as ammonium and ethanol, providing more value per molecule of gas used.”

Long also acknowledges, “the challenges faced by Trinidad and Tobago as a small island developing state, as the energy transition could impact prices, production, and potentially lead to stranded assets which the country has accumulated over successful years of being an oil producer and exporter.

Notwithstanding, environmentally, the country is vulnerable to climate change impacts such as coastal erosion and increased flooding due to more intense rainfall and must be at the forefront of the energy transition drive to demonstrate to its Caribbean neighbours the understanding that change is imminent.”

While the Environmental Management Authority’s Annual Report for 2022 has noted that there has been a slight decrease in applications for renewable energy projects, ongoing policy development and legislative plans aimed at boosting renewable energy adoption are still afoot. Trinidad and Tobago’s path to a sustainable energy future is fraught with challenges, but the country is making significant strides.

By leveraging natural gas as a transition fuel, implementing robust policies, and encouraging industry participation in emissions reduction, Trinidad and Tobago can achieve its climate goals while maintaining economic stability. The commitment to transparency and continuous improvement will be key to overcoming the challenges of the energy transition. LRT’s Media and Business Solutions continues to monitor and map aspects of Trinidad and Tobago’s energy transition and provides knowledge and awareness to the public so that they can be better informed as we work towards building a sustainable country.

This story was published with the support of the Caribbean Energy Transition Media Mentorship, by Climate Tracker Caribbean.

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LaToyaa Roberts-Thomas

🇹🇹 Latoyaa Roberts-Thomas is a well-travelled bookworm and accomplished storyteller with over a decade of experience in International Development and Communications. She is dedicated to highlighting the successes of the Global South, whether through exploring new novels, writing, or travelling. With a career that spans government, the private sector, and civil society, Latoyaa is committed to sharing the most inspiring stories from around the world. Her adventures are just beginning.

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