The future of energy diversification in Trinidad and Tobago

In the current geopolitical environment, tensions between global superpowers and major oil players are reaching unprecedented levels, with the potential for conflict casting a shadow over the stability of energy markets worldwide. For a small island nation like Trinidad and Tobago, heavily reliant on oil and gas exports, the ripple effects of such a conflict—or even a US invasion of neighbouring Venezuela—could be catastrophic. Such events could destabilize the region, disrupt energy supplies, and threaten the economic and political security of the twin-island republic. Compounding these risks is the looming reality of climate change, which threatens to exacerbate natural disasters and disrupt ecosystems, further straining the nation’s resources. At the same time, Trinidad and Tobago’s oil and gas reserves, the lifeblood of its economy for over a century, are dwindling, with production expected to decline significantly in the coming decades.

This dual threat of geopolitical instability and the finite nature of hydrocarbon resources paints a bleak picture of a future in which the government could face severe revenue shortfalls, jeopardizing its ability to fund critical services and infrastructure. In this precarious context, the urgency for energy diversification away from oil and gas towards renewable energy has never been greater, as it offers a pathway to economic resilience, environmental sustainability, and long-term national security.

However, as global energy dynamics shift towards sustainability and climate change mitigation, Trinidadians face a critical juncture. The future of Trinidad and Tobago’s energy sector lies in diversification—transitioning from a heavy reliance on oil and gas to embracing renewable energy sources. This transition is not just an environmental imperative but also an economic necessity to ensure long-term resilience and prosperity.

The nation’s oil and gas industry has been a cornerstone of its development, since the oil boom during the 20th century to the present. Natural gas, discovered later, further bolstered the economy, positioning the country as a leading exporter of liquefied natural gas (LNG) and petrochemicals. Today, the energy sector accounts for approximately 40 per cent of GDP and 80 per cent of exports, making it the lifeblood of the economy.

However, this dependence on hydrocarbons has left the nation vulnerable to global market fluctuations. The volatility of oil and gas prices, coupled with the global push towards decarbonization, poses significant risks to the country’s economic stability. Moreover, the finite nature of fossil fuels means that reserves will eventually deplete, necessitating a shift to more sustainable energy sources.

This global energy landscape must undergo a profound transformation in order to survive. While countries worldwide are committing to net-zero emissions targets, renewable energy technologies such as solar, wind, hydropowers are becoming increasingly cost-competitive. For Trinidad and Tobago, embracing renewable energy is not just about aligning with global trends, it is about securing a sustainable future for the next generation.

Renewable energy offers numerous benefits. It reduces greenhouse gas emissions, mitigates climate change impacts, and enhances energy security by reducing dependence on imported fuels and, indirectly, other necessary goods and services. Additionally, it creates opportunities for economic diversification, job creation, and technological innovation. For a nation blessed with abundant sunshine, wind, and access to the ocean, the potential for renewable energy is immense. Trinidad and Tobago’s energy infrastructure is heavily geared towards oil and gas, and significant investments will be required to develop renewable energy capacity. The country also lacks a comprehensive policy framework to support the transition, and there is a need for greater public awareness and acceptance of renewable energy technologies.

Another challenge is the economic reliance on oil and gas revenues. A sudden shift away from hydrocarbons could have adverse effects on government budgets and employment. Therefore, the transition must be carefully managed to ensure a just and inclusive process that supports affected workers and communities. To successfully transition to renewable energy, the country must adopt a multi-faceted approach that includes policy reform, investment in infrastructure, and capacity building.

The government must establish a clear and supportive policy framework to incentivize renewable energy development. This includes setting renewable energy targets, implementing feed-in tariffs, and providing tax incentives for clean energy projects. The recent announcement of a renewable energy target of 30 per cent by 2030 is a step in the right direction.

Subrina Hall-Azih is a Trinidadian Educator.