Low-cost power supply attracts investors

DENIS R. SINGH General Manager of the Trinidad and Tobago Electricity Commission

Trinidad and Tobago provides electricity at some of the lowest costs in the region. As part of its bid to prioritize economic diversification the government has made low-cost energy a vital incentive for industrial growth.
The Trinidad and Tobago Electricity Commission (T&TEC) is central to this plan. “We are trying to encourage people to come here on the basis of our low-cost electricity,” says Denis R. Singh, General Manager. “I think that this is one of the crucial things which has attracted investors to this country. Domestic customers pay about 3.5 cents a unit, industrial customers pay even less. Our rates are the lowest in the Caribbean and Latin America,” he adds.

The country is fortunate in having its own domestic supply of natural gas, which fuels the three main power stations on Trinidad. “We have also made great efforts at reducing the cost of our operations,” says Mr. Singh.

THE NATIONAL GENERATOR, the national generator, Powergen, has a spare capacity of nearly 500MW

T&TEC is responsible for the design, construction, operation, and maintenance of the electrical transmission and distribution network throughout the twin islands. It supplies electricity to Tobago via two submarine cables, and maintains a standby generating plant there, which runs on diesel fuel.
The company’s turnover in 2002 was approximately $200 million. This is forecast to grow by 2% in 2003. Meanwhile, demand for electric power is growing by 4% annually. This growth comes largely from the expansion of the industrial sector, which consumes 70% of the country’s electricity.
“T&TEC has been one of the driving forces for industrialization in the country. We have done well in providing electricity to both large and small customers,” says Mr. Singh.

He believes that the company is well positioned to meet this increase. “We have been able to keep up with demand and that is the important thing. The major industries we have here operate on a 24-hour basis and we are able to keep on top of that,” he says.
The company’s infrastructure, most of which was built during the oil boom of the 1970s, is in good repair, and 97% of the country have access to electricity. A series of projects has been included in a ten-year program of upgrades.

ELECTRICITY distribution throughout the islands is a crucial part of T&TEC’s remit

“We have to look seriously at developing our transmission system coming into Port of Spain, which is developing as a city. We anticipate quite a lot of growth in the construction of major office buildings. Transmission and distribution will also need improvements on the western peninsula where we have seen major industrial development at Point Lisas.”

T&TEC is prepared to extend these plans as the government moves forward with its own program of economic development. New industrial estates are being considered in the southern parts of Trinidad. Business growth is also expected to be strong along the east-west corridor. All of these developments will require further improvements to existing infrastructure.
“We also need to decide at what point to source new generation capacity,” says Mr. Singh. The national generator, Powergen, has some spare capacity. It operates at a peak of 700MW but has maximum capacity of 1178MW.

T&TEC established Powergen as its subsidiary in 1994, and passed control of the electricity generation assets of its three power stations to the new firm. T&TEC owns 51% of the company, from which it buys bulk electric power for resale. It also secures its fuel supplies. Its two investment partners in the generator are the U.S.’s Mirant Corporation and British Petroleum.

Electricity export is, however, not being considered. Instead, the government plans to supply low-cost gas to its neighbors via the proposed undersea pipeline. It is looking at ways of getting more private investment into the energy sector, according to Eric Williams, Minister of Energy and Energy Industries.
“The major component in our economic transformation process is to promote local as well as foreign investment in the energy sector. Increased revenues will assist in financing development in other sectors and facilitate the diversification process,” says the Minister.
“The country is already quite investor-friendly. But there is always room for improvement. So we are streamlining investment requirements to make them even more welcoming,” he adds.