Category Archives: Infrastructure

Hybrid cars are efficient internal combustion engine (ICE) cars. They are electric vehicles to the extent they have batteries and an electric motor. But the truth is, 100% of the energy used by hybrid cars are from fossil fuels, unlike EVs which could offer a chance of using completely green electricity. Of course, you can argue that Plug-in Hybrids allows for that. So for a moment, I’m just going to declare I’m not talking about Plug-ins.

The thing about Hybrid is that they are probably great in terms of making the power generated by the ICE more efficient. Whether this is more efficient than the total process of generating the power from fossil fuels and then pushing the electrons down the power grid to the charging station to supply a pure battery EV, I’m not too sure. But the point is that you’re still using fossil fuels. On a per-unit traveled basis, your carbon footprint is lower. So yes, it reduces carbon emissions through its efficiency gains.

But then that’s what ultra-critical coal power technology does too. It makes coal fired power plants; and we stopped that. So when we think about phasing out ICE, it is important to make it more of a binary choice such that we are not leaving too much room for ICE cars in the form of hybrids. Accelerating decarbonisation is a significant priority and creating these wriggle room does not help.

The energy transition is vital for the world, for our future generations and I’ve previously explained how moving toward sustainability is a change and there is pain associated with it. And I’ve also used the term disruption then. This time, I want to look at it from the perspective of disruption to the energy industry itself.

The energy industry acted like a chain, passing on hydrocarbons from one segment of the chain down to another, processing it in different ways until you get energy. That’s why there is the upstream (which is mainly exploration, drilling, extraction), followed by midstream (transport vessels, pipelines, etc) and downstream (power plants, internal combustion engines, marine and aviation fuel engines).

Trying to decarbonise this energy value chain inadvertently changes the dynamics of that ecosystem that has been working for quite some time (if you consider just Oil & Gas, that is recent but if you consider Coal, then it’s been centuries). The players used to work together and despite the commoditisation of these products, the connections and relationships within the industry means there is some degree of coziness with the structure of who does what and how.

When an international oil company now wants to be sustainable and sees themselves not as an oil company but one that supplies energy (which they technically have been doing in the past), they are now having to sever ties with some midstream players and competing with those who were their downstream customers. All of a sudden, they are bidding for renewable energy projects against the independent power producers whom they counted on to purchase their fuels.

Transitions have knock-on effects and eventually becomes disruptions because things displaced don’t fit well naturally elsewhere. Are you ready for them? Is your business ready for them?

How much should we price convenience? We should probably price it based on the damage it makes. If you’re picking up something on your way and that saves time for someone else, it does cost you that tad bit of time so it makes sense for that someone else to compensate you up to the cost you’re bearing.

These transactions can result in efficiency in the system. But the cost have to be identified easily. When we place the onus of providing a plastic carrier on the seller of wares/goods, we are getting them to price convenience to the buyer. Unfortunately it is usually mispriced because the material, production are not all the cost that goes into the lifecycle of the plastic bag.

So even though the individual marginal costs holding all else constant are rising slowly, the joint social marginal costs rises really quickly. As usual, when costs are dispersed and benefits are concentrated (just like tariffs on sugar in US), you have an issue. We cannot ignore the importance of aligning incentives here and if the government wants to pander to the market and take the microscopic view, we’re all doomed to fail.

Waste is under-rated everywhere. Demand for second hand stuff mostly fell as the price of newly made goods fall with the rise of mass manufacturing. Efficient logistics moving manufactured goods helped to fuel the purchase of brand new items. Recycled goods are being seen as second class or for those underprivileged.

There is a clear case to using second-hand goods besides savings and economics. The reason is that the cost of waste and disposal has not exactly been priced into the goods because cities everywhere tends to put a blanket price on things like waste. There are arbitrage opportunities where this is the case and have been used by many different businesses or informal organisations around the world. But they are hard to scale, tend to be very specific around local context and culture.

Which is why growing a culture of acceptance for recycled products and second hand goods is going to be part of the drive for sustainability. It is not just about packaging but the goods themselves. I really think highly of marketplaces like Carousell which helps to match the needs and supply for such second-hand market. Curators of communities need to add this dimension of facilitating exchanges across members as a vital additional pillar to communities: coworking spaces, residential committees, management committees of buildings. Local community based marketplaces have the highest chance of spreading the culture and creating quick wins.

Governments build infrastructure. Well yes the private players get involved, and they might be the ones doing the actual construction, or they might even be the ones investing. Ultimately though, the government calls the shots, they approve the plans, they set the parameters and set up the policy environment which the projects operates in.

Governments measure themselves by socio-economic parameters. They should be focusing not on making money for the treasury (because there are wider externalities they care about which they won’t account for if they only think in terms of “returns” from an individual project), but on social level benefits and gains against social level costs. These quantifications are difficult; they probably require procurement of consultants’ assistance, and along the way, governments can get confused about the methodology, and hence the recommendations put forth.

So they might fall back on trying to get political value out of the projects. They’ll choose and work on projects that can capture people’s imagination, that can be repeated at the next couple of speeches or events. They might put too much weight on the anticipated political support or popularity of the project/idea.

Yet the fact is, if they want to make a genuine impact, and a positive difference to the system, they will need to do the hard work and possibly not take the credit. They need to think not what can they get out of it but what can they give to the people through it.

On the trek I had with friends recently, I was explaining that all the power sources we have on the earth (with the exception of geothermal energy and maybe nuclear energy) is from the Sun. Solar PV or Concentrated Solar Power are obvious but actually all other renewables sources relies on the sun as well.

Wind relies on temperature and hence pressure differentials and this is a result of the sun. Hydropower actually relies on the hydrological cycle where water is drawn up into the sky (by the sun through evaporation) and falls on water bodies or location which are higher altitude and hence subsequently released from the gravitation potential energy.

All biomass and of course biogas (which comes primarily from biological decomposition/digestion of organic waste) are stored energy from the sun via photosynthesis by plants. And with that, you can also see that all fossil fuels are actually stored energy from ‘historical sun’ where plants of the past performed photosynthesis and was subsequently buried, compressed and then forming our fossil fuels.

With that in mind, even as we marvel at engineering, technology and all that crazy amount of knowledge accumulation and civilisation that enabled humans to flourish the way it does today, let us acknowledge the wonders of nature that have been supplying us unceasingly. And let us recognise that it is also important for us to honour the order of our natural world, that we may continue to enjoy the fruits of the planet we live in.

While the worlds’ cities go gaga over the whole idea of a Smart City and wow city governments over the capability to develop ‘dashboard’ views of cities, from seeing traffic jams, predicting upcoming power outages or water pipe issues, I hold a slightly different view towards the idea that assimilating lots of information is always a good thing.

I think it is important to have specific use-cases for data and to design suitable data silos for the use-cases. Mindless big data mining may generate insights retrospectively but it should not be the default way of using them. If you think that being able to respond quickly to large amount of unordered, rich information is advantageous, then think about the stock market. The people who take fewer actions with stocks tend to do better than those who are too active. Having the ticker moving constantly can be exciting and appealing – it gives that concrete sense of ‘knowledge’ or visibility of the ground.

But it is an illusion. Consider autism – it reduces a person’s ability to function by overwhelming a person’s senses. Smart cities can still be an important vision to make the lives of people in cities better. But city dashboards that shows city authorities many things at one goal and makes for a fancy place to visit do not make lives better.

Satellite towns are going to need some upgrading: the neighbourhood malls require more amenities and services. There has to be more shops around the malls to provide alternatives and greater variety. Because working from home is probably here to stay. Besides the way we consume housing, the demands we place on our neighbourhood malls are going to change. We will probably shop more there and lunch options will need to be more varied, not just catering to students after school.

Shops in the major town areas including eating outlets are going to consider moving out into more residential areas, fragmenting flagship stores into local distribution points. There can actually be more combinations of online-to-offline business models with this change in landscape. Because a small shop in the neighbourhood is never going to rival the variety one can offer up in a flagship store, you want to allow customers to access the greater range of products through digital means either at the store or nearby so they can eventually consume at the store or bring it home from there.

Food options will have to go beyond the usual chain outlets and provide takeaways or delivery options with ease. Malls can start considering ways in which the last-mile food logistics can be better organised than having an army of grab delivery or foodpanda delivery men/ladies sitting outside malls. Perhaps some kind of central holding area where food will be pushed to for that mall?

Food courts can start simplifying their dinning areas (if they are not keen on having crowds gather and sit for long), maybe even combining kitchens to create cloud-kitchen type of setup.

The smaller scale amenities that may be a little “odd” or less consumer-ish such as the laundromat, dry-cleaner, money-changer, hardware shops can be organised around the malls. These outlets may need to serve people who are there for a clear purpose and don’t enjoy as much agglomeration economies.

Networks are powerful, they amplify signals and messages, create effects that anchor and entrench products and players. When we have a power plant and a network supplying power to a lot of households, we gain from economies of scale, the higher power available unlocks higher consumption of electrical appliances, increases our productive hours and amplify the wonders of having electricity.

It also means that if that power plant fails, you’ve a blackout. Not just you but across the network. Expanding the network, putting more plants on it enhances resilience to an extent – so much so we have taken our network’s reliability for granted.

But guess what, power networks are going to be less stable. Intermittent sources of electricity from wind and solar power, as well as decentralised generation of power reduces the predictability of power flows and makes it harder for the system to operate smoothly in matching demand and supply. Huge mismatches will cause outages and when that happens, can your decentralised generation actually help you? Do you have “island” capabilities on your microgrid?

A microgrid that has capabilities to disconnect from the main grid and supply itself is powerful – even if the supply is just to sustain the system for some time. That enhances resilience. In life as well, it makes sense to acquire another skill on the side, make friends from beyond work and save up significantly, to achieve this resilience. Too often we are silently being lulled into being dependent on the mammoth bureacracy and system built around us we think we don’t need the island capabilities anymore.

With working from home becoming a norm following Covid-19 pandemic outbreak, there’s going to be major shifts in infrastructure one might start to expect and consider as one thinks about entering a career in infrastructure. I’m going to share some thoughts on this particularly from the perspective of housing first and in the coming posts, maybe some other aspects.

Housing has traditionally been about proximity to work and also key amenities and that was what created waves of urbanisation right from the start of industrialisation. However, over time, as the industrial core and city centres became a little degraded, the patterns of housing moved out to the city fringes and even to the suburbs, giving rise to suburban malls but also transport lines, roads that connects the city to the suburbs.

In the case of Singapore, we’ve been successful in creating satellite towns to support housing needs as our urban core area becomes too unaffordable for ordinary people to live in, and the continuous refreshing of old spaces means it has become increasingly high-rise and land-use intensified. This intensification is made possible only through advancements in public transport and the ability to pull people from more satellite towns into this urban core where people work and also do some of their consumption.

With the pandemic and work from home, demand for housing that are sitting on transport nodes linking to city centres may fall a little; the desire for more space, and comfort might become more important. Cramming people into small shoebox apartments and encouraging them to be out of their houses (a la Hong Kong) might be increasingly difficult. I am looking forward to shifts in valuation of property though that change might take much longer to reflect in the property market.