Category Archives: Life

This is a the last of a series of 3 articles on hydrogen. You can access the other 2 parts here and here.

Green hydrogen is chemically indistinguishable from natural gas that has gone through steam methane reforming to extract hydrogen. There is a need to properly certify the origin and volumes of these hydrogen produced to verify their carbon footprint (or lack thereof). This is the first piece of the puzzle.

And in order for this certification, standardisation must happen. Sustainable Aviation Fuel (SAF) has more or less taken off because of this ability to standardise at least technically. And then lots of different additional sustainability requirements are layered upon them to ensure that the green credentials and identity are more established. Standards for SAF are still not exactly super stringent from the sustainability perspective but the prescribed standards and associated pathways allow for a completely separate value chain developed from the A1 jet fuel.

Green hydrogen must go through the same; and its derivative products, such as green ammonia must itself be standardised and certified in order to succeed becoming another low-carbon fuel, whether it is for co-firing in power stations or as a maritime engine fuel.

Development of the separate value chain from the grey or brown hydrogen is the second piece of the puzzle. This means that a lot of work must go into the supply chain players getting together, jointly marketing their newly standardised product, and reflecting to the world that there’s actually some kind of established activity and industry with its associated transparency in pricing.

Final piece of the puzzle is in terms of financing. As there is no clear long-term commitments, the projects must first be funded by equity; likely at slightly smaller scale so that the subsequent scaling-up can enjoy the benefits of falling prices of electrolysers or batteries. The equity players who would come in on these projects would be the impact investors, the offtakers of these green hydrogen (including steelmakers, power-to-liquid e-fuel producers, green ammonia producers, etc.). They should be helping with kickstarting these projects because they will need the green hydrogen – and since they will require more of it over time, the cost of production can be averaged down and they don’t have to worry about being locked into higher prices.

Government can step in to fund the first projects using revenue raised from carbon taxes. By pricing carbon, raising its price over time and using the revenues to push ahead greener technologies and applying innovations, the world can move forward with the energy transition.

This is a the second of a series of 3 articles on hydrogen. You can access the other 2 parts here and here.

So hydrogen is not taking off despite it being so integral in the energy transition and the low carbon economy. What is the problem?

Hydrogen often gets peddled around as the wonderful element or molecule (if you think of it in terms of the gas) that will enable us to transition to zero carbon. It can be combusted or reacted in a fuel cell to produce just hot water – which reflects how unpolluting and clean it is. It can be produced by electrolysing water, and the byproduct is just oxygen, which is again wonderful in terms of the way we think about cleanliness.

Green hydrogen today is costly to produce, mostly because the electrolysis process isn’t particularly efficient and very pure water is needed to reduce the deterioration of the electrodes used in the process. Hydrogen is not easy to capture and store by itself as it isn’t really stable in the atmosphere (quick to recombine with oxygen). The cost of producing was about $3-6/kg but of the spike in natural gas prices recently, the cost of grey hydrogen itself already outstrip those levels of green hydrogen costs. The only tricky part is that because the corresponding electricity costs has also risen due to the energy crisis, diverting renewable electricity to producing green hydrogen has naturally become more expensive.

So it seemed that green hydrogen by itself is caught in a bind where its price rises when its ‘grey counterpart’ rises in price; while not exactly falling as much in price when the grey counterpart is cheap. With such features, it is difficult for potential adopter to embrace it wholly at this point. To the extent that demand for it right now is typically short term and no one is able to commit to buying at the high prices over long periods of time as they believe that prices should fall as technology improves.

So we get into a self-reinforcing feedback loop where the lack of adoption keeps prices high which itself keeps adopters at bay. Developers of hydrogen projects are facing challenges financing these projects since they are not able to secure long-term demand for the products of their project. Hydrogen council’s latest update of the market situation indicates that there are many more projects announced but the conversion rate of projects from ‘being announced’ to ‘final investment decision’ remains startlingly low. In fact so low that there seems to be an ever-growing pipeline of projects partly because projects simply don’t get through the pipeline!

There are very specific opportunities where hydrogen production can make some kind of sense at the moment but they remain limited. For example, when large utility scale wind or solar power needs good, longer term storage due to lack of load demand during periods of strong production. Or perhaps renewable electricity production capacity outstrips local supply either due to population departures or long-term planning of power capacities that did not materialise.

Hydrogen can also be useful when the grid is not strong enough to take high productions of these variable renewable electricity and hence the production gets curtailed (ie. they are not allowed to inject into the grid). Hydrogen storage can be viable at scale and it is also cleaner to the extent that it doesn’t have to be replaced as frequently as Li-ion batteries and hence produce less waste from an environmental footprint perspective.

Outside these opportunities, it is difficult to justify producing green hydrogen; and even with such opportunities, it is not clear how long they would last. Curtailment events are undesirable and not exactly what renewable electricity project developers or owners would wish for. Likewise, it doesn’t make sense for more power capacity than required to be built if the local demand is insufficient.

Green hydrogen projects can really only properly materialise when there’s a clear definite demand for green hydrogen. And for this, a couple of things must happen; which I’ll address in my next post.

This is a the first of a series of 3 articles on hydrogen. You can access the other 2 parts here and here.

A while back, I wrote about ammonia; and one of the critical chemical precursor is hydrogen. Historically, the focus of ammonia was about getting the nitrogen in a form usable and useful for making fertilisers. The fact is that nitrogen is plentiful in the atmosphere but it needs to be extracted.

The Haber-Bosch process allows for this atmospheric nitrogen to be extracted using hydrogen, producing ammonia or ammonium salts. These chemicals are then more easily transformed into fertilisers. The hydrogen part of the equation had never been considered a challenge so to speak. While it was rare on its own and not the most stable of gases, it was abundant in fossil fuels combined with carbon dioxide. So practically all the ammonia in the world is produced using hydrogen extracted from fossil fuel.

Extraction can be through steam methane reforming of natural gas (grey hydrogen); or gasification of coal (brown hydrogen). All of these processes emits carbon dioxide. In fact quite a bit of them. Not a problem when you’re producing a small amount of ammonia and primarily targeting agriculture rather than using ammonia as a source of fuel. But a big problem when you’re trying to get away from carbon as an energy vector.

So there’s low-carbon based hydrogen. They come from largely electrolysis of water using renewable electricity (green hydrogen). And if you capture the carbon dioxide from those traditional pathways mentioned above, then you get blue hydrogen. These color codes and names are from McKinsey and a shorthand to describe the carbon intensity of the hydrogen production. Useful for layman, not so much for the people in the industry since the actual carbon intensity is not exactly clear.

Nevertheless, it is interesting that because we are now increasingly looking at hydrogen as an energy vector, ammonia becomes a fuel again. It is being explored for a variety of energy applications: as a maritime fuel being combusted in ship engines, as a co-fired fuel with coal in the coal power plants, as well as a co-fired fuel with natural gas in a gas turbine. All of these allows the coal or gas power plants to continue running with lower levels of carbon emissions and allows them to be utilised through their economic life, and continue servicing the loans rather than becoming stranded assets.

So hydrogen seems really important in the low carbon economy. Yet it is not taking off. Stay tuned to understand the bottlenecks and challenges.

When I read about the stories Adrian Tan shared with Lianhe Zaobao recently, I was almost moved to tears – perhaps also due to the awareness that he lost his mum to cancer earlier and is currently fighting cancer himself. I resonated with his experience when I first went to Chinese High myself. My parents didn’t have to pull any strings to get me there but they did do their part in emphasizing the importance of a good education (though not so much the results), and encouraged me to explore my intellectual interests.

Like how ACS changed the life of Adrian, Chinese High changed my life too. I didn’t feel too competitive in school but I never felt like I was an outsider despite the fact that the students who got to the school were mostly from Nanyang Primary while I was from an unknown neighbourhood school. I made friends, I participated in activities with the rest in school. I didn’t do any better or worse than my classmates. I didn’t have additional tuition or music instrument classes compared to my classmates, but it’s okay. I got into an Arts programme in school and spent so much time in the arts studio slogging away on my arts project. I developed my confidence, awareness of the world, politics, sensitivity to culture, work ethic.

For me, education was indeed a leveller. And though I missed out on further opportunities that a more privileged background would have afforded me, I’m really grateful. It was being in Chinese High and around people who had huge ambitions and big aspirations to change the world that drove me to aspire the same. And that was also what granted me access to scholarship applications, one of which eventually landed me in LSE and NYU.

Yet I’m not sure if Singaporeans today had that same access as me if they were from my background. I’m concerned there are greater disparities between the performance of students from better backgrounds compared to those who don’t. This is a reflection of greater and more intense reinvestment of the privileged family in securing educational advantages for their progeny. It is only natural; but the society will really have to try and even out the playing field more.

Or the cubby hole. Or lockers. Whatever.

As humans, status roles and desire for affiliation drives a lot of our behaviour. These are the two fundamental drivers that typically underlie Seth Godin’s thinking and ideas about humans and most phenomena in the market and societies. Both of those ideas involves some categorization of grouping of some kind. A taxonomy if you may. Within our minds at least.

Status roles are driven by some ideas of dimensions, some basis by which to compare. How much more money, talents, capabilities, or recognition. The values that matters, they are in a bucket. The values that don’t are in another and hardly even thought about. You’re putting attributes into pigeonholes of different labels and kinds.

Affiliation is once again about groupings. Wanting to be in one bucket rather than another. Only this time, you’re putting people and yourself into pigeonholes. You actually want to be occupying a hole.

What if we can no longer compare. And when everything is just moving around rather than being in neat, tidy drawers? What happens when things or people tries to defy the pigeonhole? Does it cause anxiety? Or creates peace?

Why would we rely on companies’ goodwill and marketing desires to drive environmental, social and governance goals? Why don’t we as a society go out the push these agenda upon them? After all, we did the same with labour laws, we also regulate the release of harmful substance into the air or water bodies. There are more draconian and extensive rules around. The financial markets might look like they will survive climate change. But not human lives. Especially not the ones whose livelihood and critical infrastructure depends on stable environment.

There is a huge crack in the system and it is going to cause a great deal of pain if we try to fix it. This pain is in terms of profits; but we know it is also going to cause a greater deal of pain, agony and anguish to many lives, and a future that is ahead of us. Yet for some reason, we are willing to safeguard profits at the expense of a future. We think the profit can buy us safeguards – what form, I’m not exactly sure about.

A green economy requires external intervention and it is not going to come about naturally. Sure, it will be quite difficult to gain societal consensus around these issues and things. Most of the population may not be well-aware of the issues at hand enough to actually support some of these reforms or policy changes. Others whose profits and livelihood are impacted may question the wisdom of these. Public education and creating awareness is just as important – we’ve done that with hand-washing and encouraging public hygiene, we have moved people from kampongs (villages) into high-rise public housing in a single generation, and we have turned Singapore from Third World to First in just about 25-30 years.

We can make this transition to a green economy.

You can’t solve a problem you aren’t willing to have.

Bill Burnett and Dave Evans

I know of a workplace a person close to me work at. They are essentially supposed to perform innovation and the staff are trained in design thinking. And yet the struggles of the staff there are unthinkable.

They spend some time hunting around for problem statements. And I think one of the biggest challenge is that they spend more time choosing the problems to solve rather than trying to deeply characterise them. As a result, they had a cohort of staff spending a lot of time and resources on problems which eventually appeared to be unsolvable. That then led on to the management trying to steer the team towards scoping down problems to smaller, manageable types.

What started out as a culture that was supposed to be more candid, fun and open became full of tension and sensitivity. People were afraid to voice real problems; and elephants started to appear in rooms, chats, and zooms. Issues were being skirted around. Indeed, if one is unwilling to have a particular problem, one will never be able to solve it.

I was visiting a part of Singapore where there was a new MRT station but a small population of residents around that station. I expressed that it was such a waste of taxpayer’s money to build a station there when hardly anyone lived there and yet the cost of the station is borne by the population. On the other hand, there were amenities which were not built in more densely populated locations in Singapore where it would be needed and served way more people.

Then it dawned on me that if you have the transport node in place, the value of the land surrounding it would rise and any further developments in the area would be more valuable. The government being the main land owner around the new MRT station in this sleepy village would eventually benefit from the land sales. So in some sense, it was ‘investing’ in the taxpayer’s money for the future.

But to a certain extent, this argument mean that there’s probably no point building or serving the places where you’re originally extracting taxes from because those taxpayers would be the ones benefiting disproportionately from the developments rather than the government. I wonder how this calculus works. Public finance is actually such a fascinating topic worth more public awareness and public education on.

I think it’s such a pity that when budget of the government is presented, the things that catches people’s attention is mostly about what sort of handout or welfare benefits are coming along and for who. There’s insufficient attention placed on how much is spent on what infrastructure, where they are going to be, who they are going to serve and why. The common man should know, and should be questioning these.

A few days back I wrote about my observations in Primark. There are simply products that needs to roll off shelves as soon as they are put on it for the business to work well and stay successful. And pricing contributes significantly to that.

Near my place, there’s always been a hot food stall that sells affordable hot breakfast food (for those who knows, it’s an economic bee hoon stall); they are incredibly successful with long queues every morning and they usually sell out right before or during lunch time. They start as early as 5.30am, and queues start forming from 6-6.30am. Unfortunately, some time late last year, they sold their business to another larger food company that runs multiple food stalls in neighbourhood coffeeshops. I heard it was because one of the proprietors fell sick.

In any case, after the company took over the business, they retained some of the previous partners but raised prices after renovating the stall. The food were not different but then because queues stopped forming, the food items were left on the display longer. As a result, they were less tasty, which reduced demand further.

Just by raising the price, the stall suffered a double whammy, the original model of selling made-in-time hot food broke down. The hot food stall became a mediocre stall in the coffeeshop. There are just some models of business that requires low prices; this is good for both the proprietor and the target pool of customers. When one considers raising prices, one must recognise that the pricing is part of the overall business model.

When I consult with businesses about various different new trends or emerging technologies in energy transition, there’s always the inevitable question of costs and when they will come down. For greener fuels in particular, there’s always the cost comparison against the usual fossil fuels. At the same time, for green electricity, there’s always the comparison against the grid.

I’d remind them that we have to be prepared that despite the learning curves and technological improvements, the cost may not come down sufficiently. In other words cost of the new greener technology may not be able to match the current cost of the traditional, more carbon-intensive technology.

But yet they might reach parity for other reasons. First, carbon price through taxes or emissions trading can raise the cost of the more traditional technology. Second, as players start switching towards the greener technology, there may be a reduction in scale economies for the traditional technology that also increases its costs. Finally, the producer of the legacy technology may also diversify their business towards the greener technology in face of public pressure which would make it costlier for those who need to find replacements for legacy components or parts.

Or there may be other problems and external issues that upset the current economics. The best example is the energy crisis around the world now with shortage of natural gas. It is almost artificially created but not any less real. And people are scrambling in fact to develop more solar capacity; and also faced with rising costs because of global supply chain bottlenecks.

Surprising but energy transition is being accelerated by rising prices.