Category Archives: Infrastructure

Gas in households

When corporates purchase carbon credits and try to ‘offset’ their emissions, environmental groups would accuse them of greenwashing and to a certain extent, tokenism. Yet when Victoria state government bans gas in new homes from 2024, environmental groups were pleased and herald it as some degree or progress and victory.

It is easy to pass this off as a big move. Developers of new homes may have more planning restrictions. Those buying new homes will need to stop using gas. Gas demand growth from households will slow down but gas use in homes are a really tiny fraction of 17% contribution to the state’s emissions by the gas sector.

At the system level, Victoria’s grid emission factor in 2022 is actually such that it emits 4.6 times more carbon dioxide equivalent than combusting piped gas for an equivalent amount of energy. You can easily work that out by consulting the greenhouse emission factors published each year. Of course, I’m probably ignoring some of the emissions associated with the distribution part of things and also with fugitives. The reason for this big difference is the presence of coal-fired power plants on Victoria’s grid. In any case, all renewable energy injected into the grid from wind and solar will be used. Coal-fired power plants provide the baseload and gas-fired power plants usually absorb the additional load demand. What this means is that during the times (early morning or in the evenings) when you’re using electricity for heating or cooking in households, it is quite likely you’re consuming more gas fired power than solar power (whose generation peak in the mid-day).

There are questions on the efficiency of the whole process. Burning gas at power plants and converting them to electricity will result in some energy loss, and then using the electricity to convert it back to heat will mean a bit more losses (less than at the power plant of course); so heat applications for electricity isn’t all that efficient.

And then there is the question of energy bills. Whether you are consuming gas directly in the house or indirectly through electricity in the system, you are going to bear the cost of the gas that is consumed. In Australia, a large proportion of the cost of energy isn’t really in the energy itself but the share of cost that goes into infrastructure, especially that of distribution. Going full electric in households serves to help decarbonise the system only when the renewable electricity is supplied during the times when household’s demand peak. For solar, this is unlikely to be the case unless the household installs its own battery system to charge when solar generation is peak in mid-day. Batteries, additional distribution network assets to cater to peak renewable generation, are all infrastructure that will add to the cost of electricity.

So let us be honest about it: banning gas in residential use is unlikely to move the needle much in terms of decarbonisation in the electricity system right now. At least not all that much in Victoria. It is going to push the problem upstream where it can potentially be managed better. But a lot more actions will have to be taken. Would it improve indoor air quality for homes? Maybe, if your house is not properly ventilated but I doubt it is a very serious issue. Would it really reduce energy bills across the household? Quite unlikely. What it could accomplish is some degree of tokenism to pacify the groups of people who thinks it is a good idea.

Yet it is probably a setback for decarbonisation because we are narrowing ourselves to decarbonise by using a narrow set of technologies and forgetting about the ability to decarbonise gas through biomethane.

Carbon credits 101

Earlier this year, Guardian released an expose about forest carbon offsets, in particular about a handful of projects and brought a bit of an uproar in the industry. While it created more awareness about carbon credits and concerns around the quality, methodology around calculation of the emissions reductions or how the “offsets” can really be quantified, there seem to be a lot of misconception remaining around carbon markets and how they work.

First, we need to recognise that there are compliance markets and voluntary markets for carbon. And while we may sometimes call them all ‘carbon credits’, the concepts are vastly different. In compliance settings such as the EU Emissions Trading System (EU ETS), the object that is traded are actually permits or allowances. These are regulatory objects that are created arbitrarily by regulators. Basically, when the regulator says the industry is allowed to emit 100 tonnes of carbon dioxide equivalent, this 100 units becomes permits or allowances. Each unit represents the permission to emit a unit of carbon dioxide linked to a time period based on regulation.

On the other hand, there are voluntary markets; and these are where the majority of carbon credits that can constitute conceptually ‘offsets’. Putting that notion aside first, we need to recognise that those ‘credits’ are conceptually different from emission allowances. In reality, those are supposed to be like merit points awarded for good behaviour – of not emitting carbon dioxide. They are given to projects that protects rainforests, improve efficiency, manage waste more carefully, switch fuel from fossil to low-carbon ones and so on.

The manner for calculating these merit points are complex and set by various standard bodies that are structured as non-profits. In and of themselves, the credits when valued in the market encourages more of the activities that generate them. And because they inevitably entail some kind of emission reduction or even carbon removal (through some sort of sequestration), when companies buy and then retire them, they are basically trying to ‘offset’ their own emissions. The calculation of the amount of merit points was essentially what the Guardian article referenced was really criticising.

The projects in and of themselves are voluntary; and those buying the credits are not really forced to buy them by any regulators. That said, companies have been buying them in order to ‘offset’ their actual emissions and then gain the ability to pass of their products as ‘carbon neutral’ – not because they rejigged the supply chains to no longer emit carbon but because they used the credits/merit points off those projects to neutralise the demerit points they had from emitting carbon. The problem is when this is the value of the carbon emission reduction – so that companies have the ability to emit more, we really wonder if that is worthwhile.

Using the market mechanisms to spur production of something tends to be quite easy but to reduce it might be harder. This is why we have the government, public services such as the police and defence force and not leave these things to the market. Otherwise, the police could just offer bounties for anyone to catch the criminals and so on. Carbon markets are interesting but further regulation and a proper understanding of how we want to value emission reductions and count them is vital.

Tailpipe emissions

We moved to Sydney earlier this year and one of the main highways that the buses move on to get to our place in the suburbs is Parramatta Road. It was a highway leading into the western suburbs but now it is just a road – a relatively narrow one for the heavy traffic that goes through it.

I recall one morning when I walked along the road to get to the bus stop that gets me a bus to the city. There were heavy trucks going down the road, with large SUVs and smaller passenger vehicles as well. I didn’t recall tailpipe emissions bothering me that much back in Singapore – perhaps only the heat that the cars were emitting then. But I noticed how much the tailpipe emissions were stinking up the air even in Sydney where it was less humid than in Singapore and smells tend not to linger or stay strong in the air.

It did make me wonder what the roads would be like without those tailpipe emissions. And that’s probably the dream of those EV companies and the policymakers who are trying to push for more EVs on the roads. Singapore could have done that way earlier; given our ability to manage the vehicle population through COE. Moreover, Singapore already has one of the highest taxes on vehicles in the world. This means the population was ready to shell out the kind of money that an EV would cost.

It is a fine balance to strike given that there’s a lot more consideration around the readiness of our electricity network infrastructure to develop the charging capacities needed. There’s a lot of thinking around whether our vehicle refueling infrastructure is going to be disrupted – and how we can manage those disruptions. Sometimes we just want the transition to happen immediately and for all of us to gain access to the latest technology at reasonable costs. Singapore has done a good job juggling these difficulties and we can do more to explain the linkages between systems to allow us to pinpoint and put pressure on the bottlenecks.

Convenience and waste

Our convenience in this day and age is built upon waste. Lots of it. When we order delivery, we compel an additional person in the society to actually go to the shop to fetch the food for us, bringing it to us before going about his or her way. This creates 3-4 journeys instead of two. It generates more packaging waste and potentially more transactions: between you and the platform, the platform and the deliveryman as well as the platform and the food outlet.

Yet our economy is built upon such foundations, that we generate more activities, monetise and measure it, and consider that an uptick in our growth and economy. Sure, maybe the ability to pay for the service and choice to take it up means you are able to spend that time more productively, at something where you can make a higher level of contribution to society. Indeed, if that is the case and the basic parameter of decision-making, then the economy and society becomes more efficient, not more wasteful. But that is unlikely to be a real decision parameter.

Convenience is something more about psychology, behaviours and motivation than with the cold-calculus of cost and benefits. Besides, the weighting of cost-benefit across time is not as simple as imputing an interest rate or discount factor the way we analyse it in economics. The discount factor adjusts due to the manner our psyche responds to context and situations.

The question then is whether we want to make that short term gain in our economy, giving in to our impulses or to generate the long term sustainability in our world and fulfill a greater meaning for our lives on earth?

Fear and inspiration

Do you think that Singapore is governed mainly by fear of sticks and people drawn by carrots? That we have a pragmatic society that is often about dollars and cents? And people are following rules because they are induced by incentives and pushed away by disincentives?

If you look at videos of Lee Kuan Yew’s speeches in the past they were fiery but also inspirational. He does not try to push actions or responsibility on people without giving them a destination that is worth their while. We tend to forget this in public communications.

We tend to tell people that they can’t do this or that because if everyone does it, there will be chaos. Instead, they should be saying that when we disallow people from doing this or that, it makes for a more orderly system or design. And it allows everyone to enjoy the environment better.

Instilling inspiration can be more rewarding than trying to great fear. But we are all too anxious for success, too impatient to do that. We prefer to think the energy to wield a whip is less than providing a carrot. That may not always be true.

Big Fossil has a chance

I don’t want to call them big oil or big coal, or big gas anymore. They are big on fossil, fossil fuels. And they have a chance to make the future a better place; one that we all want to be part of. They have the opportunity; enormous opportunity to create the products and services that people need and want which will be good for them, and good for everybody else, not just good for the big fossil companies.

But to take advantage of this opportunity, they need to recognise people are not demanding for fossil fuels. They are demanding for energy, for access to energy, for cheaper energy. But that form of energy is fossil fuel, big fossil might retort. It is not. Fossil fuel is not cheap. It is not cheap because we all are paying in the form of greater natural disasters, in facing once-in-a-hundred-year floods almost every decade, in having to pay even more for heating during winters and cooling during summers. Fossil fuel is not what the world is demanding for.

Big fossil can ignore the NGOs, they can ignore the activist investors or the climate activists, and even government. Heck, they could buy out those sitting on the fence. They could even subsidize all manner of appliance, infrastructure, systems that entrench fossil fuels further. But they cannot ignore climate change; they cannot ignore the fact that we are not destroying earth with carbon emissions. We are destroying ourselves. And for what? Profits? What good are profits if that’s just creating a future no one wants to be part of?

Going in circles

Our spray bottles for cleaning the kitchen counter, pump bottles that come with our body foam, as well as that shampoo bottle are all going to outlast our use of the fluids stored within them. They can be reused – and in reusing them for the same applications, we are reducing their usage. Good for the overall economy in terms of saving resources, for our pockets and also the environment. Except that it is in the interest of the fossil fuel companies to churn out more plastics, for the consumer goods company to create more new packaging and mark up the price of these products, for logistics companies to handle a consistent set of quality, new containers rather than re-used, non-standardized ones.

We’ve created incentives, built our economies around sheer wastage and environmental destruction. Can new business models be created, alongside the harnessing of forces to drive change in consumer culture and consumption practices? Grist reports on some interesting examples recently.

Indeed, we already have vending machines and public water fountains. Why not make soda fountains where people pay for soda that goes into their water bottles? Scoop Wholefoods already tries to retail all kinds of products by having customers bring containers into store where they are filled up.

Laundry detergent, hand soap and all can definitely be sold in bulk dispensed from big containers into the containers brought by the consumers. During the Covid pandemic, Singapore had deployed vending machines and various physical outposts around community centers where Singaporeans could bring their containers to refill and get alcohol-free hand sanitisers. Why not make that the norm?

It will be difficult for the market capitalism as we have evolved it to stomach and put up with all these changes. People want to carry on with proliferation of brands and ‘choices’ – they want to make different containers and so many different kinds of detergent, soaps and handwash that makes it hard to retail all of these in bulk.

Would you rather have more options of soap and less possibilities of a future we would want to be part of? Or less option of soaps so we can choose better futures to exist in?

Demand for energy is growing

We’ve been seeing on the news that 2023 will probably go down in history as the year oil majors backtracked on their promises towards the climate transition, and continued their trajectory of emissions as the demand for fossil fuels continue to grow.

This is exactly the kind of behaviour that makes it easy for people to keep painting them as the enemy. As a matter of fact, they risk painting themselves out of the low carbon future when they allow their “core” fossil fuel business to continue cannibalising their renewables business. Yes you heard me right; in refusing to see their core business as that of providing the world with sustainable energy, they are rapidly destroying a market they want to be part of.

Instead of seeing it as demand for fossil fuels, the oil majors need to recognise that there’s demand for energy – and it is growing. The opportunity to convert their customers to green users, energy users of the future rather than keeping them in the past. Their behaviour will at some point push the authorities to act even more aggressively against fossil fuels. The trouble right now is that they think the world needs them to go on spinning.

Who is the enemy?

Is it fossil fuels or the fossil fuel companies?

Biomethane (or upgraded biogas) has a challenging reputation in some markets. It is chemically indistinguishable from natural gas which is a fossil fuel. It burns identically and emits carbon dioxide when combusted. However, it is considered a low-carbon fuel because the carbon content from biomethane is actually the short-cycle carbon dioxide. It is great because you can combust and generate power or heat using a conventional gas turbine or other gas appliances with it without having to retool or change the equipment.

Biomethane is a clear pathway to support decarbonisation of gas and yet it is being shunned by critics. Part of the reason is that the fossil fuel companies are getting involved and could extend the lifespan of their fossil fuel assets and infrastructure using it. And some people are unhappy that they even receive low-carbon funding for the gas infrastructure.

When we see fossil fuel companies as enemies, then anything they do will be wrong and things that continues driving their asset base even tangentially related to fossil gas seem like a problem.

But if the enemy is carbon emissions, then those companies need to be given a chance. We need to demarcate some boundaries: for example, they could set a profit margin cap on themselves and commit all the funds above that towards clean energy investments. Or even better, they could funnel those funds into a ring-fenced facility which then dole out the resources towards anything proven to be low-carbon.

Story of methane

I thought of writing about methane. It is a curious molecule consisting of a single carbon atom surrounded by four hydrogen atoms around it which pretty strong bonds with the carbon atom. The entire molecule is relatively small and exists in gaseous form at room temperatures. It is naturally occurring and comes out of natural processes that involves anaerobic bacteria actions. It is a fuel that can be combusted to produce carbon dioxide and water vapour.

It also happens to be a greenhouse gas. Each methane molecule is thought to have 25 times more global warming potential than carbon dioxide. Natural gas is largely made up of it; hence it is a greenhouse gas by itself though combusting it will also produce carbon dioxide which itself is a greenhouse gas though with lower potential.

The focus on carbon emissions is a result of the recognition that we have spewed so much of this particular greenhouse into the atmosphere that it is having extreme effects on the global climate due to the warming potential. The world needs to move towards low-carbon and that means having activities that are emitting less carbon dioxide into the atmosphere. In general, fossil fuel based carbon holds the largest responsibility in anthropogenic carbon emissions.

Interestingly, you could produce methane through anaerobic biological process. And cows are known to release methane into the air because of the bacteria actions in their stomach. The dairy industry therefore becomes a rather larger emitter of greenhouse gas for this reason. That is where stuff gets a bit fuzzy when you’re counting global warming potential, anthropogenic emissions and so on.

So biomethane is the methane produced through anaerobic digestion of organic matter can be captured and used as a fuel. When combusted it likewise produces carbon dioxide and water. But this carbon dioxide belongs to the short carbon cycle due to its organic/plant heritage and hence is excused from what typical constitutes carbon emissions. Yet when biomethane leaks or is released into the air, the methane’s global warming potential is counted and the carbon-equivalent emissions actually forms part of the emissions from processes whenever biomethane is used. This ‘short cycle’ argument doesn’t seem to apply.

This may not seem very consistent and can potentially create a lot of confusion around the truly ‘green’ identity of biomethane. One could see how biomethane, or renewable natural gas as it is known in the US, is going to suffer from being conflated with fossil fuel natural gas.