Balanced transition

My work in the energy transition over the past decade or so have been about fossil fuel diversification but also about renewables diversification. As the system gets more and more electrified, the point of failures shifts from the end-nodes of the energy consumption system (eg. engines, electrical points, etc.) to the transmission and distribution systems, as well as the point of generation.

This is why energy mix features strongly as something that requires government to plan and determine. Singapore’s power generation fleet is ~95% natural gas and hence there is huge risk in being exposed to international gas supply. So we are technically using a mix of long-term contracts and short-term ones, as well as a mix of piped natural gas and liquefied natural gas.

But that is all fossil. What about renewable power? We have been relying on solar power off the rooftops, the mobile plants on empty plots, and the floating solar on reservoirs and that is great. And then we’re thinking of importing renewables from neighbouring countries, which involves long subsea cables at high voltages to transmit the power to Singapore. In order to use the asset well, it is best that the power transmitted is firm and not renewables so you don’t have to oversize the transmission capacity. So you put batteries for those wind and solar power; and then you also try to import hydroelectricity.

But what happens during the dry season (low water levels and hence low hydro), when there are forest fires and haze that block out the sun’s rays and reduce solar yield?

As we are deep within another season of transboundary haze pollution problem, we notice that the energy transition plans may require greater understanding of risks. If the entire region’s energy that we’re relying upon is mainly solar-based, a severe haze event could reduce power yield and result in supply inadequacy. This is regardless of how much battery power you have in the system because the firming is more to smooth out the volatility and system fluctuations across a day, not to deal with capacity factor or yield reductions.

And this brings me to the argument that we need to make the energy transition with a kind of diversification that we do when we had fossil sources in our energy mix as well. We need to be able to secure different, uncorrelated forms of supply and energy vectors in order to maintain supply resilience and stability, even if that may mean a blow to the price/cost impacts. Take it as an insurance premium of sorts. We are buffering ourselves from having to scramble for just what everyone needs when the crisis happens.

Often, this means importing green fuels. That could be biomethane produced from anaerobic digestion of waste water or other wet organic waste streams. It could also mean biodiesel, renewable diesel, or other biofuels produced from organic residues and waste fats and oils from regional markets. This would help us diversify our sources of energy not just geographically but also the pathways that we are relying on so that we are not at the mercy of an energy crisis whenever there is forest fires.

At the same time, developing demand for biomass residue and putting pressure on valorising biomass waste can change incentives for the plantations and forestry industry. If aggregating the waste, processing it can provide a slight return better than break-even, it might make sense for them to do so rather than burning the waste in the forests or fields. The balanced transition requires more systems thinking.

Substance of founding leaders’ paradigm

I spent a couple of hours chatting with a friend about history, politics and society in Singapore. It was an interesting exchange on observations about the government, Singaporeans as a people and our topics ranged from the Maju forest developments to the NDR 2026 announcements.

One of the things that came up repeatedly in the conversation was a thesis I had about the evolution of our leaders’ paradigm about Singapore’s development. It was perhaps a thesis I had in mind but embedded deeply and have not surfaced until this conversation. I articulated this notion that we learnt to mimic the form of policymaking and decision-making that our founding leaders’ had without its substance.

What do I mean?

A short digression first. I have to qualify that I am not an expert in history, but I read widely and have admired Dr Goh Keng Swee since I was 15. I read every speech and piece of writing by him I could find. And of course, the declassification of the Albatross files was to my great delight. I care deeply about Singapore’s governance and leadership. And I always felt that it was important to keep going back to different stories, incidents, and anecdotes to pick the brains of these founding leaders. Knowing about them is different from knowing them. And it would be good to get to know them properly, and understand how they thought about things. Because our success is not just happenstance nor having their relentlessness, nor about just their character. How they thought about things matters.

Let’s start with the systems thinking and approach to nation-building.

When Dr Goh Keng Swee thought about the economy and obsess over job creation, he was thinking about the jobs that common people could take on. He was observing the people and the kind of skills or work they could do. People were not necessarily educated yet. Industrialisation was necessary and made sense; and industries could absorb the labour force. And we needed to build things up anyway – so we had factories of every kind: making nails, steel, mosquito coils, and then textiles. Yes, these were all in the industrialisation roadmap, but the starting point was observation of our people, before finding ideas elsewhere.

For me, there are a few areas of our economy and society which will demonstrate weaknesses that can affect us in the next decade and will need to be properly dealt with:

  • Low fertility coupled with ageing population
  • Decoupling between jobs and GDP growth
  • Bifurcation of the external and internal sector growth
  • Geopolitical uncertainties and rising trade barriers

Not all of these can be dealt with directly but we can position ourselves properly amidst the challenges and align our solutions to deal with the struggles by being absolutely clear about the trade-offs.

There are of course internal political considerations to take care of – but we can be honest about it and speak up about them. I recall how LKY had responded to a question by Han Fook Kwang (former ST editor) a while back when he asked about the foreign talents outdoing Singaporeans – I recalled how he replied candidly to say ‘what choice to do we have if our people are not reproducing ourselves and growing in competitiveness – we’d rather the foreign talents be tugging the economic rope on our side than from elsewhere against us! Be open to real ideas and think of ways how we could approach it with the big picture in mind.

I have three proposals in mind to deal with the four big problems I highlighted. None of the three proposals will be able comprehensive enough but they serve as starting points to think about those four problems at a broader and more strategic level. I’m going to write about these proposals in separate posts and put in the links to the posts as they get published.

  1. Champion caregiving jobs for locals (deals with point 1,2,3)
  2. Get even more strategic about embedding Singapore into critical global supply/value chains (deals with point 2,4)
  3. Increase support towards financial risk-taking activities for locals

Developing the market II

I wrote about the challenges of putting a price discovery process ahead of a market development step. When I look into markets like China, US or even India, market development is very much the main process because they are likely able to produce many different types of commodities and hence anyone who needs something would or could scour the market in search of that commodity or product.

Now if it is difficult to obtain the product because of limited number of producers, you would then undertake the activity of actually developing the supply chains and producing it, assuming that you are able to line up all that is required to start producing it. We are now all operating in the same market, so it would make sense for large corporations because that reflects growth, and for governments as well because it creates jobs and boost economic activities.

Basically, if the market is underdeveloped, instead of buying off the market, you will have to somehow build it yourself. And that means building out the entire value chain. Because going out to ask for a quote will likely give you ridiculous figures from traders and potentially scalpers.

Smaller economies that are unlikely to be able to build supply chains and produce within their own economies would likely have to go elsewhere to seek out the product or commodity. This means finding out where there are already markets already available, getting a sense of the cost, factoring it into their considerations, or developing a full supply chain into their own economies by themselves.

Trading economies like Singapore and Hong Kong are really strong at the price discovery portion, focusing on short term cost reductions, seeking out the most cost-competitive sources. Perhaps the mature, yet geographically disadvantaged economies like Korea and Japan in particularly is really strong at the longer term approach of developing the full supply chain into their own economies and strengthening real economic linkages across borders.

What this means is that Hong Kong and Singapore may be disadvantaged by their approach towards markets when it comes to sustainability and the transition. Part of the reason is that being trading nations, most of the genuine manufacturing base is not actually in the country (demand pushes doesn’t work so well); and for the limited activities that are to be ‘decarbonized’, the ability to do so with domestic resources is limited. When the demand side such as Europe or America starts demanding for ‘decarbonised’ products through various policy instruments or corporate targets, especially when the green fuel, green electricity markets are not sufficiently mature in Asia Pacific, some of those supply chains and relationships will shift.

Japan is able to develop these value chains and build up the ability to connect resources back to their economy mainly because of the strength of their corporates which dominates their domestic economy and also string up a lot of their local supply chains including small-medium enterprises. The large corporations can then draw the resources and potentially even raw materials back into their domestic economy to feed inputs to the other domestic players who could produce for the rest of the world.

Perhaps one day I’d conduct more research into the economic strategies and growth paths of these various Asian economies and what it means for the emerging Asia economies in Southeast Asia.

Developing the market

In my day job, I provide strategy, commercial as well as policy advice particularly related to the energy transition. We aim to support players to make evidence-based decisions and to ground their decisions on proper assessment of risks and the dynamics underlying the operating environment.

One of the big mistakes I have been encountering when it comes to the energy transition is that market players (including government) have this mistaken idea that certain solutions are not viable or possible after trying to get a sense of pricing when a market has not been developed. In essence, price discovery can only take place after establishing a market. We can try to work out the cost of bringing certain products into the market, but that is different from trying to call a tender a have a price discovery process.

Take for example biomethane in Southeast Asia. There are pockets of it already produced, and you would be able to get price quotes for delivery of the products to where you need. Maybe you could also sign a long term contract on a small volume but pricing is going to be high because the players would put in more margins in order to deal with their risks. The lack of liquidity and a fleshed out market leads to distortions in price quotes. Moreover, biomethane being a gas means that transport cost can be a huge portion of the delivered cost if you are situated far from the original source.

Logically, you could put the biomethane into the national gas networks and then distribute it using mass balance methodologies. However, there are issues and questions around gas grid access – the immaturity of regulations around open gas grid access in Southeast Asia makes things a bit more complex and that gets amplified when you consider cross-border trades, and even liquefaction.

Don’t get me wrong, complex markets do exists. The global LNG market is a marvel, and our agrifood supply chains are truly an amazing showing of what the free market does. But these markets took time to develop and have had to go through a process of evolution where the supply is driven by initial demand and the willingness to build infrastructure to support all that.

The same principle applies to cross-border renewable electricity; there is typically a gradual process of working out the infrastructure costs, understanding the approaches towards delivery of the electricity, developing feasibility studies and so on. Having diversified sources is all well-and-good but that works when you are accessing markets that have developed supply available to make these happen.

No matter how sophisticated your price discovery process is; it will not deliver in an environment where the market is under-developed.

Grieving a loss

It was 20 years ago.

A group of students taking the project work (PW) subject at A Levels thought to embark on a ‘controversial’ topic: reviving dialect speaking amongst our generation.

Never mind the topic that year was actually ‘Maintaining momentum’ (the other topic was maintaining tradition, but we didn’t want to paint dialects as a tradition) – we thought there was a bit more momentum in reversing the policy at that point in time.

Guess we were wrong.

Anyways, if you look into our presentation deck, it was just a glimpse of the research work we did and ideas we had. There were interviews with teachers, clan associations, social welfare organisations, primary surveys with students, peers. Even if only some of those ideas were implemented, perhaps we won’t grieve the loss as much (as Prof Tan Ying Ying written in her commentary on CNA).

But it’s too late. And it’s not much to do with policy anymore.

PW Oral Presentation materialsDownload


English language was perhaps too successful, with our education system and the employment market providing all of the carrots and sticks necessary to beat us into shape. Think about the people who actually did not lose their dialect abilities. They were the ones who weren’t quite in the system to be beaten into shape.

In our project, we even considered why it was important to keep this part of us. We thought about communication, cultural transmission, social divides, and public service.

20 years ago, we came up with all of these. But perhaps we didn’t believe in it enough. Some of us who entered public service did not enter the arts, heritage, culture or social sector. Most of us were successful in the system.

Surely it was not up to us for sensibilities to prevail.

Driving the market

The challenge with over-financialisation is that price signals get confused in the market. We are trying to make prices mean too many different things. And there gradually is some kind of misallocation. This is probably something not studied deeply enough in economics because it’s always been glossed over in the assumptions about free markets.

We often think only about the demand and supply sides of free markets, but never quite about the income side. The assumption is that incomes then unlock the demand back in the free market. Yet the income side of the equation also changes the underlying demand. A society that has higher concentration of wealth will have a different demand profile than one that has lower concentration of wealth.

Not to mention that different regulations and rules will divert income and wealth in different ways. Countries with stricter labour regulations can have higher unemployment, but wages can also tend to be higher, and that gives rise to a broader middle class while also resulting in labour-based services commanding higher prices, and changing the value of goods vis-a-vis services.

The philosophy to leave things to the market isn’t neutral per se. We cannot make a conscious decision to say this or that should be left to the market and then disclaim the negative consequences of it. Once we institute a market, or any other policies, we ought to recognise the presence of winners and losers, and then the overall system needs to deal with the shortfall of the system.

In the HDB for example, the government seeks to ‘subsidise’ housing for the BTO flats but allow secondary ‘resale’ transactions to be ‘priced’ by the market. Yet this pricing is subject to forces such as private housing prices, which is in turn related to land sales and also buying power from foreign capital. This means that as much as we try to create the two-track market to ensure locals have access to affordable housing, it is subject to forces on the other side. Ultimately, the tension is political – with so much wealth of the people locked in real estate, can the government or the political parties allow for massive collapse in real estate value to ‘reset’ costs for a younger generation?

And if not, how can we ensure that intergenerational wealth transfers do not massively handicap those who do not receive them? Do we then intervene in the market? I would think that the market continues and should be part of the whole suite of allocation mechanisms available for policy-makers but treating it like the default approach for allocation of everything would be wrong.

Quiet in Tokyo

At first, I thought it was because I didn’t speak a word of Japanese.

There was something silent about being in a country that spoke a foreign language you do not understand.

But then I realised it wasn’t just my own experience. Others thought that Tokyo was quiet for the density of the city as well.

It is amazing. Indeed.

It was impolite to take calls in cafes.

And I realised that when Japanese people spoke to each other in the city they did not speak out aloud; they leaned in and speak. They were intentional and speaking to one another, not talking out loud randomly.

It was interesting and I sure think we all can learn a little from that.

Coming back from Japan, I found Singapore pretty noisy. The traffic, the ventilators, the impatient people using their voice to rush others – with their orders, with their pace, with their movements.

I wished we didn’t have to use our voices that much.

Hunger versus desperation

I think it’s great that Edwin & Shulin’s interview/podcast with Steve Chia and Tiff Ang on CNA provoked a whole bunch of discussion. The point that Steve brought up at the beginning of the podcast was that he talked about the need to balance between the aspirations of the nation and the work preferences of the younger generation. Unfortunately, it wasn’t really the conversation they had because the grander picture of Singapore’s economy and market evolution isn’t mentioned.

Jeraldine Phneah actually posted a video discussing some of her take on how these things blew up and it was a really balanced perspective. I like how she gently took a jab at Shulin’s approach to delivering the message when Shulin herself talked about the importance of communication.

Personally, I’m more concerned about the characterisation of what ‘hunger’ is about. A lot of the discussions made it seem like this ‘hunger’ is self-evident but it isn’t. Different people had different interpretation of what hunger is and what it looks like.

For Shulin, it might be more about an attitude, not projecting so much me-first; being willing to stretch and take on learning opportunities as opposed to viewing things outside job scope as a chore or seeing some work as ‘beneath’ a job title. Yet for many others, hunger might look more like desperation; of making sacrifices that are unreasonable, and sucking up to bosses, going all out to please clients or entertain their unreasonable requests, etc. Shulin even posed ‘hunger’ as binary – whether you have it or not. That just probably didn’t seem right.

Tan Min-Liang, the founder of Razer, made a very good point on Linkedin about the younger ones behaving simply as a response to the corporates and employers. Give them the right sense of purpose and the work that they feel they deserve, and they will make the appropriate sacrifices.

Technology has made it possible for people to just keep working non-stop; and at the same time, companies may not have properly adapted technologies to their own business and workflow, and managed their employees poorly in that process. It would only make sense that without the management improvements (with management being stuck in the 80-90s mindset and management style), the company is suffering from actually really poor productivity, of which the younger employees are bearing the brunt of.

So the question now goes back to the employers. Are they hungry enough? Are they hungry enough for the right people and talents to provide the appropriate training, software systems, management and leadership? Shulin mentioned about employers’ lack of flexibility and the corporates limitations in meeting the needs of the current workforce culture. I thought Tiffany helped to voice out some of that employers’ and managers’ grievances about the inability to have the real conversations about work / job redesign. These are exactly the issues that we are not confronting enough in this podcast. I am actually really glad that the younger workforce is forcing employers to rethink their approach.

It will be politically challenging for the government to keep the situation in the way it is and allow the market to simmer and boil a bit so that the culture would shift. To do that, they will need to let businesses struggle with the manpower challenges. But maybe, they need to do just that.

Prompt too far

While engineering our prompts well can maximise the possibility of a good result from GenAI tools that we are using, it is also important to understand the technology, the features that AI are really good at, and the things that they are really poor at so that you’re leveraging the right strengths and not wasting your tokens or prompting attempts on things that are fundamentally not going to come out of the AI tool.

One thing to appreciate, especially for GenAI, is that LLMs are designed to provide you with high probability responses that will be considered ‘right’ or ‘appropriate’ by human raters. So even though they are trained on a large amount of data and information, it is difficult to necessarily weight the information appropriately to your needs when giving you a response. As a result, they would tend to give you motherhood statements that have a high probability of being on-point even if they are tangentially related to what you are really looking for. You may be able to guide it in your prompt to go a bit more specific towards what you want, but essentially, you’ll have to do the work of narrowing down things. This is because the LLM is designed not to clarify your questions and sharpen their output for you – that’s something that you are supposed to do. Yet at the same time, they would already be consuming your tokens even during that process while you’re ‘finetuning’ them towards your output.

The other challenge for LLM is the problem of hallucination and even creating false data or connections. Quite often even when they are citing or linking to certain sources, the LLMs are making guesses on the content and association with what you’re searching for and also what they are ‘talking about’ themselves. So an assertion may be associated with a link they furnish you, rather than being based on that link. This is radically different from academic citations when your ‘sources’ are really saying or validating what you are saying. Most GenAI tools simply provide materials that may be associated rather than actually make certain points. Worse still, they could make up links that are broken and claim them as source.

Of course, there’s a whole issue around existing softwares being replaced by AI or vibe-coding. Often, this involves almost reinventing the wheel. Yes, maybe the prototyping cost has come down: what AI has done is that it has taken down some of the initial barriers in getting some kind of digital product out. But all that without providing a proper long-term infrastructure planning or system thinking because it is not exactly optimising towards a longer-term vision. This means a lot more resources dealing with bugs and bolting on new features or other aspects of the software in a way that is not optimised at the system level. Moreover, the AI companies are themselves competing with their own customers and users in developing the more bespoke tools for those willing-to-pay clients. So what makes you think you are going to vibe-code your way to a proper product people will pay you for?

Delighting in rules and laws

I was just chatting with a Christian friend who purportedly likes rules because they make things clear to follow and, hence, help determine the right course of action or decision. Yet this friend feels tortured when she is somehow made to break rules, or when rules are suspended in her favour after she has broken them.

I asked if she love those rules in a manner that is not about practicality or functionality but actually appreciate the heart of the rules and meaning of them. Not always, she recognises.

Yet the Psalmist could say in Psalm 112 as well as 119 (they may or may not be written by the same author) that he delights in God’s laws and statues or that one who delights in it is blessed. How do you love rules? How do you delight in these things anyways? Surely it is because you’ve grasp and understood the spirit beyond them and what they were set out to do. And in order to do that you, must embrace the character and spirit of the one who have put these rules in place.

It is in fearing God, loving God where we find ourselves delighting in the statues of God because He had put them in place as a manner of relating to us and guiding us, revealing His intentions and His designs. And that’s why the Bible often portrays obedience as a consequence of love. That is what it means to fear God – to be in awe of Him, His works, His intents. We can love God, and learn to love His laws but still struggle with them, and struggle with obedience. Until we are about to allow our will to be subject to Him, and to have our will be aligned to loving and serving Him, there will always be a tension.

Which is why I determined that each day, we are choosing to be Christians all over again. Conscious that our every deed and, in fact, every decision will bring us back to consider our faith in the Lord.