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I read the President of the Caribbean Development Bank (CDB) comments which were published in the media, for e.g., in the Kaieteur News on October 22, 2021, and titled ‘Region’s future hinges on sustainable energy transition – CDB Pres. tells Member States’. I would like to build on the CDB’s president’s comments and share my own view on how the regional sustainable energy programme can be developed and implemented in a structured and systematic way.
I would like to propose what I call a ‘Guyana, Trinidad and Tobago and Suriname Regional Energy Partnership’ (GTSREP) which could also form a part of the wider regional sustainable energy strategy and programme. Partnerships add value, as such, firstly, the three countries should clearly establish what is the added value they each bring to the energy partnership. Secondly, these countries should determine what are the common principles and values around which the energy partnership will be built, managed, and sustained; and thirdly, what are the core areas of focus, in line with their development objectives, as well as with the regional growth and development objectives.
I will now propose some core focus areas for consideration for such partnership – geopolitics; technological changes; social changes; crisis (oil spills, natural disasters, internal conflicts, etc.); and market changes/influences – global energy development patterns (in developed and developing countries), current and projected regional and global energy consumption patterns, etc.
Globally, the current energy system remains dependent on fossil fuels such as oil, coal, and natural gas, which pprovide just over 80 percent of the world’s energy, in recent years oil has overtaken coal as the largest single source, however, renewables are rapidly becoming an alternative, some countries are currently relying on solar, wind, bioenergy, and hydro to generate almost 25 percent of electricity.
Important to note in the Caribbean and more recently in Guyana and Suriname, is that the geopolitics of energy is changing remarkably; also, important is that energy systems globally are becoming more diversified, more distributed, flexible, and responsive, incorporating innovations like two-way power flow, demand-response, and distributed storage options as a result of the decline in cost of renewable energy.
Hence, it is appropriate for the region, with Guyana, Trinidad, and Suriname, perhaps taking the lead to craft a new strategy in order to survive and compete in the new evolving global energy environment – geopolitics, market, technology, risk factors; as well as articulating how wider regional developmental goals and commitments linked to energy, can be achieved.
Some of the baseline consideration of the broader new regional sustainable energy strategy and the ‘Guyana, Trinidad and Tobago and Suriname Regional Energy Partnership’ should be, the United Nations (UN) Sustainable Development Goals (SDGs), particularly those on energy services.
Another key focus of the regional partnership should be to alleviate regional energy poverty and structuring of the sustainable energy sector to mmeet other developmental needs, such as education and health care, as well as financial mobilization, and technology sharing. The partnership also has a role in enhancing coordination in climate adaptation, where there can be collective gains from a ccollective approach in infrastructure integration, and to mobilize regional and international action in areas where domestic action alone is difficult to pursue such as, reforms.
The regional energy partnership will allow for a structured and systematic approach to addressing matters in the complex landscape in which policymakers, corporate leaders, and investors make decisions relative to short- and long-term outlooks for energy supply, demand, trade, and investment in the region. Guyana for e.g., could be assisted with politically contentious fiscal and structural reforms.
On the market side, it is important to note that the primary driver for energy demand is the change in either gross domestic product (GDP) or GDP per capita, which is a main consideration for the short, medium, and long-term energy investments. A reality is that developing markets in developing countries are becoming attractive with fast growth, rising incomes, and booming populations.
Another key consideration for the regional energy partnership would be consensus on projections on what are the internal and external drivers shaping the view of the future of energy in the region. Energy consumers in the region, are likely to have different future demands. A key question is consumer demand in the region, the fact that consumer tastes inevitably evolve as a result of technology or other forces, what will the regional energy consumption be like? Consumers in the region may have different expectations for energy: for e.g., different preferences for transportation. Will the region’s growth trajectory reflect a shift towards more manufacturing where the demand for certain types of energy could be higher than in a more services-oriented region?
Other areas for the partnership will include, what will be the nature of the ccompetition in the regional energy sector? How will the energy companies in these three countries compete for markets and chose technologies? What is the new regional business model for sustainable energy based on supply and demand?
On the geopolitical side, what is becoming more obvious, is new relationships with regional governments and oil companies with the backing of their respective home countries; and new commercial ties between companies and governments which is also influencing non-energy geopolitical relations in the region.
Crisis is another factor for consideration by the proposed regional energy partnership. The energy sector is often shaped by hard-to-predict accidents, incidents, or conflicts that change the ways countries produce, trade, and consume energy. Big-power geopolitics is already a feature in these three countries, more recently in Guyana and Suriname: as well as increasing internal challenges, particularly in Guyana.
There is a role for proper management of the regional energy landscape which could assist governments as they manage complex internal challenges and opposition which could strain individual government capacity, as in the case of Guyana. In addition to adequately protecting communities and assets in the region.
Changes to the regional energy landscape will continue to be driven by complex economic, technological, political, and geopolitical factors. The partnership will ensure resilience, as a key component of a regional sustainable energy strategy and will also facilitate the agility, flexibility and risk management which is required. The partnership can also assist in overcoming hurdles, for example that gas faces with objections by the environmental communityy that sees gas development as a distraction for lower-carbon sources of power generation, such as wind and solar.
Finally, this partnership can further define a regional pattern for utilities adjusting their fuel mixes; address regional energy security concerns; and whether the energy markets in the region should be interconnected with financial markets and to what extent, since this will change how energy is bought and sold, as well as how eenergy investments are assessed, financed, and developed; in addition to influence the development of new financial instruments.
Citizen Audreyanna Thomas