Tag Archives: environment

Carbon capture

I think there is a place for carbon capture and utilisation. But just not the way we have been thinking or approaching it. Carbon capture and storage in some kind of cavern or project and expecting it to hold on to the carbon dioxide does not make sense. But many other carbon sequestration approaches do: applying biochar to ground, injecting carbon dioxide into cement to strengthen the concrete, or any processes that somehow mineralises carbon dioxide into some kind of other compounds including carbonates.

All of the approaches where carbon dioxide is somehow transform into some other form which is more permanent and serves a function make sense. The technologies involve in terms of filtering the carbon dioxide to a certain level of purity, conveying it and handling it, will play important role in the low-carbon economy.

The reason is that carbon dioxide is still an essential part of many industrial production processes. In any case, the main challenge of climate change isn’t really the presence of carbon dioxide – it is the fact that we are taking out fossil carbon and then turning it into carbon dioxide, releasing it into the atmosphere faster than it can be cycled back into other parts of nature. This build-up of carbon dioxide, strengthens the greenhouse effect, making things really nutty for the climate.

But when we are taking biogenic carbon dioxide and using it, there is nothing wrong because the carbon was sequestered from present carbon dioxide in the atmosphere. Using it merely ‘recycles’ the carbon around. Human systems that does carbon capture can play that same recycling role. Take for example the capture of biogas from the anaerobic breakdown of organic matter. That is a mix of methane and carbon dioxide gas; the carbon dioxide gas can be filtered out and then used for industrial processes, while the pure methane (or biomethane as we call it) can be used for energy purposes – combustion to produce heat and drive turbines to produce electricity.

Moreover, the carbon dioxide produced from combustion can be captured, purified, and utilised just like the carbon dioxide filtered out from the biogas. This carbon dioxide can actually be combined with green hydrogen to form many other hydrocarbon molecules that act as our more familiar fuels that are compatible with many of the engines and systems we have. Not just that, the combusted fuel will emit that same ‘biogenic’ carbon dioxide, which would not count as greenhouse emissions because they are in the short-term cycle. Nevertheless, we can still capture that carbon dioxide and then return it to those uses we talked about.

To me, that’s the role of carbon capture in the future – it is really to recycle the carbon just as nature already does it. It is not to erase the carbon dioxide that has already been emitted. It is really naive to think that spending more energy trying to capture the emitted carbon dioxide can be more worthwhile than using alternative forms of energy that do not emit so much carbon dioxide in the process. That would be the role of these technologies in the future.

Blunomy & bioenergy

My blog has always been relatively free of direct stuff on my work but here’s just a post where I wanted to document some of the work that the Blunomy/Enea team had worked on over the past couple of years.

Moreover, it has been over a year since I stepped up to take care of our Renewable Fuels practice at Blunomy for the Asia Pacific. Things have been really challenging and tough on the energy transition front for the world, and for the business of consulting but when I look at these analysis and work we’ve put out, I’m reminded of how far the industry and market has come.

Some of these materials I’m putting links to are available as ‘publications’ on our website, but some of them have been put out by our clients who have decided to make some of our work public.

This corpus of work followed public sentiments and appreciation of biogas and biomethane as a source of energy across Europe, Australia and New Zealand. Starting with awareness-building and education on this source of green energy that contributes also to circularity, we went on to develop analytical pieces focusing on feedstocks, understanding feedstock value chains, as well as more advocacy pieces that cuts through the challenges in the industry to recommend suitable policy intervention should the government determine this was a worthy cause to pursue.

Blunomy continues to build upon our experience and expertise. During this period, we also performed due diligence on more than 50 projects across different parts of Europe, looked into impact assessment as well as the help clients develop relevant investment cases for this business. Until biomethane becomes a more mainstream form of green energy, the work will not end. Even at that point, there will be new challenges and issues to overcome.

Media and narratives

I used to love The Economist, and I even used to collect various articles to prescribe them to read for my students whilst I was teaching Economics at A Levels. It’s been a great influence on the way I write and approach sharing my opinion on things, and I enjoyed the dry wit and British humour, but these days I find the anti-China slant a bit uncalled for.

Take the recent report on China’s dominance in renewables. One of the article that talked about the improvement of air quality in China has the headline, ‘China’s air-quality improvements have hastened global warming’. I used to laugh at The Economist’s self-deprecating humour and when they lambasted silly but political manoeuvres of US presidents. When they try to criticise illiberal practices in China, I get it and understand the Western liberal lens that drives those considerations. However, this is a blatant low blow, a stark contrast to the highbrow approach that I would usually associate with The Economist.

The article isn’t even so much about China’s air quality but the science behind how some of the aerosols emitted by coal plants could have helped with cooling the atmosphere and how geo-engineering techniques based on that could play a role in climate change. Though latest studies suggest this will probably not be enough to cope with challenges in the shifting agriculture landscape as a result of climate change.

We are entering a new era where narratives are being distorted by English-language media, and it doesn’t help the rest of the world understand China any better.

I recall in 2018, when The Economist started a new column on China called ‘Chaguan’ (which really means Tea House in Chinese), they wanted to understand China better and to help the world do that. That hadn’t quite work.

Place of the Arts

When I watched Secondary the Musical last year by Checkpoint Theatre, there was so much that resonated with me, with the teachers around me about the Singapore education system. It stirred me to feel something about teachers, students, inequality, and even though there was something moving about the end where the teacher chose to stay and continue to live her passion for teaching, I could not but feel a sense of unease for the character.

I had thought and understood that this was what art was to do for us. And this was why there was such a time when the artists seemed as though they were critical of government all the time. Artists’ role in society is ultimately to bring out the subjects, topics and matters worth the attention of society. They could be overlooked groups in society, or matters that still need to be deliberated and discussed, rather than considered a “sacred cow”.

Arts is also a way to cry out in a deeply human way the causes that are worth attention not because of commercial numbers or tangible metrics but that they touches deeper aspect of being human. Whether it is our relationship with nature, or heritage and history, minority culture, there are just things that our marketised, industrialised modernity do not capture though we as humans ought to.

The place of the arts is also for aesthetics and beauty, but one that has identity and soul in the society from which it blossoms. Yet what is the business model for the arts? In a capitalistic society, what are we to do to feed our artists? Whose responsibility is it to ensure they are not exploited by commercial interests to support unworthy causes? What alternative systems are available to fund, to protect them?

Political culture

Woke Salaryman recently posted this comic article in response to comments towards a previous post about workplace ‘politics’. I really like the realism, the clarity and conviction behind their work. I think it is great that they call out the naivety of those who thinks that they can be ‘above’ politics at work but I’m writing this post because I want to add a more nuance layer to the conversation.

I think Singapore, by and large, have always been sensitive to overt kinds of politicking because of the way politics have been portrayed in our history. We take a more superficial view of what politics mean, as though it is all bad and about behaving in deceptive or conniving, self-serving ways.

And in the workplace, we default to thinking that the virtuous approach is simply to bury head and work hard. That can be a great start in a small working team or organisation where visibility isn’t really a problem. It also works well when productivity, key work metrics are not contentious. Then politicking can seem like it’s all about bootlicking, gossiping and acting in the worse, socially destructive ways.

Politics, which is derived from greek words meaning ‘affairs of a city’ is fundamentally relating to governance and interactions between fellow beings living in the same environment, subject to different constraints and influences that are interdependent on one another in the community. The relationship-building, social interactions, tussle for power, influence or mind-share are all part of it. In a workplace, where we are all coming together to achieve something together, it takes effort and the meta-layer of ‘work’ to organise everyone together.

Work today has evolved and become increasingly complex; it is hard to measure individual effort easily, and particularly challenging to identify precisely what the right skillsets are to progress to the next level. It is ultimately the ability to organise others and persuade them to work together that produces value as opposed to working and contributing directly.

There is a role for politics in all of lives, and maybe Singapore needs to build a culture of politcal-awareness and also encourage citizens to appreciate the positive role it can play in society, workplaces. And we may all also learn the right social, emotional intellect needed to handle tricky situations. With the geopolitical climate of the world today, Singapore needs to cultivate more brilliant diplomats than ever before. How else to do so than to help our people recognise the value of such work to the survival and success of a city state nation.

Energy companies of the future

When I started more than 10 years ago in the infrastructure sector focusing on environmental solutions, I saw a lot of new energy startups. A lot of them were facing difficulty on the capital front because all the wealth of the energy sector is tied up in Oil & Gas or the traditional utilities. The startups needed to access regulated infrastructure, regulated markets as well as capital in order to scale but it was difficult. The incumbents were gate-keeping.

So I came to this conclusion that nurturing startups in the energy space wasn’t so much about forming the next unicorn or tech-giant equivalents. It was about strengthening the incumbents; and that these startups are ultimately finding a match in terms of strategic investors in the incumbents in order to exit or to find their innovations adopted through the value chain.

Even for the commercial & industrial, behind-the-meter type solutions, I had in mind that the traditional incumbents would still win out because of their brands and stability.

Turns out that these became areas where they tend to beat a strategic retreat. Because it was too difficult. The big guys had a couple of things they wanted to sell; and they sure could provide some service in order to sell those electrons or molecules. They would even invest in some hardware on your site such as a metering system, or some tanks and nozzles, etc.

But once things got complex, where they have to manage some operations (even virtual ones), and liability at the customers’ sites, it became too difficult. They also think it’s too small, so they left it to whom they believe would be the small guys.

Now it took a long time but these were still difficult projects for the small guys! The EPC players, system integrators, tech solution providers had to come together, get into the complexities of energy service contracting and setting up new operation protocol to get projects up. Slowly they came up; sometimes with investments from the cashflow of these contracting firms, sometimes from family offices and rich borrowers. Financial innovation sort of quickly caught up to support this.

The resulting model, as it turns out, is more of a fund structure where capital is raised in a vehicle that will deploy capital into those energy-as-a-service projects. There is basically an increasing specialisation in the capital-heavy versus labour/technical-heavy segments of the industry. The market is still struggling to understand whether these C&I type energy assets (be it a new chiller/cooler, some kind of tech-enabled energy management systems, or just a set of solar panels with battery energy storage system) is considered infrastructure. Nevertheless, they see it as riskier than traditional state-granted concession type of infrastructure, but still safer than privatw equity where the money is put into operating companies without committed long-term revenues.

Now, I want to address the segment of the market that is also dealing in utility scale renewable power. The end of market moves and financial innovations seem to also point towards a fund structure. Whether it is Equis Energy (now Vena) or even Brookfield Infrastructure that started off in more traditional infrastructure, a whole lot of large scale renewable projects are eventually funded and operated by funds.

I would have imagined that funds would be taking over the more traditional parts of the sectors but instead, what we are really seeing is that funds have become the vehicle for transiting into a new energy system of the world. Is this just an interim solution or do we expect funds to become the energy companies of the future?

Advancement through dilemmas

As I ponder over the paradoxes of our society and nature, I begin to see more and more how our traditional linear paradigms about advancement and growth jars too much against reality.

There are many things that appears contradictory and yet continue to co-exist peacefully in the world without apparent conflict except in our minds. There are tyrants who are charismatic, loved and admired but also incompetent democratically elected leaders who could set a country back by decades. And there are both decentralised and centralised systems that appear to thrive, and also implode.

We ask ourselves if history proceeds through its course regardless of individual’s actions and it is just collective macro force created by the tiny actions of every individual that matters, or that it progresses through the agency of a few, put in the positions of power and influence? It’s not clear at all.

So when we think that progress in the system involves maturity of technology, of having regulation, standardisation, proper rules of engagement in place, we also recognise that these things stifles innovation and block new, emergent contenders from taking over incumbent structures.

Similarly, having contending standards or technology pathways look as though they are going to create a gridlock that prevents the industry from adopting a single unified approach.

The western, perhaps Anglo-Saxon, thought models make it difficult to hold those juxtaposing, contradictory ideas together because it supposes that there is just this one way that is the right way.

What if that is not reality at all?

Blunting policies II

I wrote about the government blunting their policies previously when it comes to SME grants, particularly in Singapore. The same applies to many countries where policy directions are not just unclear but constantly changing. In the energy transition world, so many projects and companies in the US were taking investment decisions on the basis of tax credits for production of renewable energy.

So when the fate of the tax credits was suddenly called into question, it massively derailed the plans of these companies and projects, resulting in a whole sector or industrial sub-segment seizing up. I have always thought it’s incredible that in Europe and US, you could build an entire business or project based on revenues that are only possible because of subsidies or government tax credits. That’s amazing to me because in Asia, companies do not rely on government subsidies to build their business cases. At least not the private companies who have no political influence.

The reason for that is that the private sector is unwilling to take a lot of the regulatory risks from the Asian government, and they are not sure about the longevity of those policies and incentives. They recognise that when leadership changes, these incentives could disappear (as it happened in the US most recently). In other words, those policy measures in Asia are actually pretty blunt because the private sector is not going to respond to it much. US government risk that happening and losing such a precious lever to influence the economy and coordinate the change that is required.

Likewise, in Singapore, one of the biggest advantage that the government have is the ability to coordinate change properly. Technically, they don’t need to use market-based mechanisms to do that, but decades of indoctrination about the need to use free-market capitalism to ensure efficiency have brought us to the approach taken these days. The topic of subsidies is tricky and often at the top level, the thinking is ‘who would not want subsidies and freebies for their business?’ Yet in practice, it is not so easy. But it is not the bureaucracy that companies are unwilling to engage with – it is the uncertainty around the discretion of agencies’ decisions on whether some company or activity merits the funding.

Often, if the government’s grants or subsidies are uncertain and criteria are flexibly applied to accept or reject applications, then companies would rather focus on dealing with the vicissitudes of the market than of the government. I’m writing these because I feel that our agencies could inadvertently undermine something precious that the government have built up in the past. The full implications can only be seen and experience when it’s probably too late.

Blunting policies I

I started my first serious job with the Singapore government over a decade ago. Before that, I worked variously in education (math and economics tutor, and teaching assistant for undergraduates), as a freelance writer for a local economics magazine, and water treatment systems (B2C and B2B sales of drinking water filters and treatment units).

But I’ve been thinking about government policies and the institutions required to build a strong economy for almost two decades. This is partly because I was influenced by Dr Goh Keng Swee’s achievements to study economics. In particular, I thought a lot about industrial policies and the approaches taken for that in Singapore.

I was subsequently part of IE Singapore, and then Enterprise Singapore. They were agencies that provided grants to local companies for various activities. To avoid ‘picking winners’ in terms of selecting particular sectors to support, most of these incentive policies are broad sweeping – they were targeted at investments that enhanced productivity such as supporting automation, digitisation, etc. Sustainability was recently a key theme for some of these incentive schemes.

As I’ve been out of the system for a long time, my views are not based on what I know from inside the system but observations made from conversations with businesses on the outside. In all of these incentive schemes, there’s a strong emphasis on governance so the process takes a bit of time. Companies are encouraged to go ahead with their plans while the grant application is in process. This plays the role of reducing risks of delays to the companies’ plans but it also mean that the companies faces uncertainty on the final outlay/expenses that the government would cover.

The government exercises a significant amount of discretion when approving grants. This is a conclusion arrived at by consulting and digital service solution providers to the Small-medium Enterprises (SMEs) with solutions or services that were supported by the grants.

What eventually happens as a result is that incentive schemes by the government becomes weaker and weaker as a tool to encourage companies to take up new solutions or move in the direction of the government. In the short run, when government pushes out incentives to help SMEs with payment systems, or improve their marketing, or even start R&D, the SMEs will definitely start looking into this areas thinking it’s their chance to defray some of their costs of making such improvements and getting more competitive advantage. Some may even realise they should go into it with or without grant support. But a majority of them would not look deep enough to make that decision – instead, they’ll make the decision contingent on the availability of support. When their applications are either denied or the amount granted falls short of their expectations, a certain trust in the government is broken.

The next time these grants or incentives are peddled around, they no longer respond to them. They are skeptical about the government’s sincerity. This is especially if they had experienced cases where the rejection comes through technical grounds or when they expected a particular expense to be eligible due to vague policy wording, but eventually the agency exercised discretion to deny it.

In the long run, these policies gets more and more blunt, and public servants will be spending so much effort thinking about the policies, setting up governance procedures, only to realise that uptake of these incentives are poor. I wonder how much governments realise this is actually a problem for longer term policy-making and economic levers. As much as they try to use market-oriented levers, some of these intangible factors make a huge difference.

Green jobs

While in the meeting rooms of policymakers, the discussion around green economy and creation of ‘green jobs’ is underway, there is a slightly different conversation about green jobs in the coffee shops and cafes.

“Good work-life balance. But limited impact.”

“We move two steps forward and three steps back sometimes when trying to drive corporate green transition.”

“We have no veto power on investment decisions, the company still needs to make money so the frontline business units have the final say even when the investment have adverse environmental impacts.”

“The corporate sustainability department primarily manages reputational risks, not environmental ones.”

The best way to create impactful green jobs is perhaps when the laws and regulations properly require compliance with stricter environmental standards. At the moment, a lot of compliance are around reporting requirements and yes you do get some kind of ‘green jobs’ but they are mainly the bean-counter sort. The solution-seeking sort will come when you begin to set up standards in environmental performance that companies have to meet.

There is no point propagating green jobs, trying to subsidise manpower for these jobs and using tax credits or other incentives to force companies to locate their sustainability or green functions in Singapore when there is no corresponding increase in environmental performance standards imposed on our corporates.

Better to spend the resources studying the suitable regulations to put in place. And then you can support the companies to meet them.