Tag: Commentary

SINGAPORE: The question of whether Singapore can or, more interestingly, should strive toward low-carbon energy transition has been raised recently in climate debates.

In an opinion piece by The Straits Times titled Can Singapore really transit to a post-oil economy?, economists Dr Tilak Doshi and Professor Euston Quah responded to a CNA commentary by Yale-NUS climate data scientist Angel Hsu and attempted to make a case against what they call “an over-hasty transition to newer but less efficient technologies”.

READ: Commentary: Forget bamboo straws. Let’s name the elephants in the room of Singapore’s climate debate

The opinion piece made a strong statement: “Policies fashioned by green ideology will lead to Singapore collapsing economically first before it may drown in sea level rise”.

However, we find the narrative of green ideology posing risk for Singapore’s development rather unbalanced.

The authors argue that Singapore’s legacy as a major petrochemical and refining hub must be central to climate policy discussions, which is indeed undeniable. Oil refining, petrochemicals and specialty chemicals production is one of the key pillars of Singapore’s economy, contributing around 22 per cent of nominal gross domestic product in 2018.

READ: Commentary: Have Singaporeans been mollycoddled on climate change?

But a green economy does not preclude the petrochemical and refining industry altogether, and there are multiple scenarios of a low-carbon transition for Singapore.

For example, adopting technologies for carbon capture, storage and utilisation could cut carbon emissions of the petroleum refinery and chemical industries without significantly affecting economic output.

However, the technology’s cost and energy efficiency have to be improved first, which is why Singapore needs to focus on research and development in that area.

It is fair to argue that pace of energy transition is critical – rapid transition might bring devastating consequences. But there are solid reasons to suggest that achieving a greener economy deserves to be an end-goal for Singapore.

A TRANSITION TOWARDS RENEWABLES IS ON THE HORIZON

One of the criticisms that the green energy transition received in the opinion piece concerned its slow pace.

But oil giant BP’s 2019 Energy Outlook suggests that renewable energy’s penetration into the global energy system is poised to be the quickest compared to any other fuel in history.

While oil and gas took around 40 to 50 years to rise from 1 per cent to 10 per cent in the global energy mix, renewables can take less than 25 years to achieve the same share.

READ:  Commentary: Big Oil talks a good low-carbon game but does little to back that up

Further data from BP and the US Department of Energy indicate that renewable energy would comprise around a third of global electricity generation by 2040. At the same time, in Southeast Asia, the share of renewables in electricity supply would be around 15 per cent in 2040.

Although that seems to be mild progress, a higher share of renewable electricity paves the way for deeper decarbonisation of Singapore. To really understand the island’s low-carbon transition, we must take a closer look at the ongoing moves toward a greener economy and the opportunities these afford.

HOW THE CLEAN ENERGY TRANSITION IS HAPPENING

At the recent Institute of Policy Studies Perspectives 2020 conference, Minister for Trade and Industry Chan Chun Sing said that Singapore is looking at a post-fossil fuel future given the global trends in decarbonisation.

He said however, that this was dependent on how fast Singapore is able to adopt the necessary technologies and address the shift in economic structure that decarbonisation would bring.

Last year, Mr Chan also announced that Singapore would develop “four switches”: Natural gas, solar power and energy storage, regional power grid and low-carbon energy options.

NATURAL GAS

Despite the growth in solar photovoltaic (PV) capacity, Singapore will continue to rely on natural gas over the next 50 years. Natural gas is the cleanest form of fossil fuels, at 50 per cent of carbon intensity of coal and 70 per cent that of oil.

Singapore, like all countries, is concerned about threats to energy security, such as supply disruptions and price increases.

READ: Commentary: Singapore’s rising natural gas ambitions face big challenges

Because we are still studying how much solar electricity Singapore’s grid can take while still ensuring stability and reliability of supply, natural gas is a compromise between more polluting fossil fuels and renewable energy.

SOLAR POWER AND STORAGE

Singapore’s total electricity generation capacity is around 1.9 times the peak system demand, according to the Energy Market Authority’s Singapore Energy Statistics 2019. 

Solar PVs contributed 174.3 MW, or 1.3 per cent of total electricity capacity in 2019 but more information on solar energy demand can help inform Singapore’s energy transition.

The lack of technical need for additional capacity, and a limited understanding of the percentage of solar energy in Singapore’s current energy mix could also be a reason for the inertia in adopting solar energy at a faster pace.

READ: Commentary: A sustainable future increasingly looks more Chinese

This shift towards solar energy should focus on both reducing peak demand and consuming less electricity all around. 

Greater transparency in data and better understanding of energy terminologies could be helpful for an assessment of how Singapore’s electricity mix could become greener.

Additionally, the traditionally vertically integrated power generation utilities were fully divested from Temasek Holdings in December 2008. 

But corporate ownership of utilities in Singapore could add to delays in decision-making on adoption of renewables, especially when Singapore’s Nationally Determined Contribution or climate pledge currently does not include a specific renewable energy target.

However, recent initiatives by the Singapore Government inspire optimism for the future of solar PV on the island. 

The second “switch”, solar power, sets ambitious targets of reaching at least 2 gigawatt peak (GWp) of installed capacity by 2030, or around 4 per cent of current electricity demand.

Knowing that intermittency of generation is one of the key barriers to solar power development, the Singapore Government is planning to deploy energy storage capacity of 200 megawatts beyond 2025.

This way the power can be accumulated when the sun is shining and used later to minimise potential interruptions in electricity supply.

READ: Commentary: The future for Singapore’s energy burns bright

Among measures to achieve the solar target is the installation of decentralised solar power in residential sector.

A significant progress in that area was made by the SolarNova programme launched in 2014 by HDB and EDB of Singapore. 

Since its launch, the programme has installed solar panels on rooftops of about 2,000 HDB blocks, with the installation at additional 2,370 HDB blocks ongoing.

It is worth noting that large-scale solar power in Singapore achieved “grid parity” in 2013, meaning that the cost of solar electricity generation has become equal to or less than that of conventional energy.

Government-led energy storage deployment, falling costs for utility-scale battery storage and grid parity of solar energy build strong prospects for the solar power as commercially feasible and promising industry in Singapore.

A REGIONAL POWER GRID

The Government is also exploring the possibility of creating a regional power grid as the third switch. Creation of such a grid can open vast opportunities for renewable energy trade.

For instance, companies in Singapore could invest in regional renewable energy projects and use renewable energy certificates (RECs) to receive the same amount of electricity from the grid.

RECs are proof of electricity generation from renewable sources, and can be bought and sold by companies to achieve their green targets. In 2019, Singapore utility firm SP Group became the first authorised issuer of renewable energy certificates (REC) in the Asia Pacific.

HYDROGEN AND CARBON CAPTUREAND UTILISATION

Besides solar power, Singapore is also tapping into low-carbon energy alternatives, named a fourth switch.

Hydrogen as a clean fuel is gaining attention in Singapore’s energy agenda. Last year, the National Climate Change Secretariat, housed under the Strategy Group in the Prime Minister’s Office announced a tender for a feasibility study of hydrogen imports and downstream applications.

READ: Explainer: Why Asia’s biggest economies are backing hydrogen fuel cell cars

Development of hydrogen in Singapore’s energy system could allow to significantly reduce carbon emissions and boost production of valuable chemicals, provided that hydrogen is generated using renewable energy. Currently, the vast majority of hydrogen is generated using natural gas.

Another strategic opportunity pursued by the government is carbon capture and utilisation (CCU). 

Singapore has a number of stationary sources of carbon emissions including refineries, power plants and petrochemical facilities. Carbon capture technology traps the emitted carbon, which then can either be transported to a geographical storage or converted to other valuable products.

Lack of available storage sites in Singapore makes utilisation of captured carbon, for example to produce methanol or mineral aggregates, a meaningful option to reduce the island’s emissions and capitalise on its economic value.

With access to hydrogen, carbon dioxide could be used to produce fuel and chemical feedstock, which can supply domestic needs or sold internationally. Carbon dioxide can also be utilised in production of construction materials.

WHAT CAN BE DONE NEXT?

Singapore should continue its commitment to decarbonising its economy outside of the energy generation sector.

Solar power, hydrogen, carbon capture and utilisation and other energy efficiency technologies have a strong potential to reduce Singapore’s emissions while contributing to its economy.

READ: Commentary: What if governments and firms measure the one thing that matters most – carbon productivity?

Energy security cannot be the last concern for Singapore given its heavy reliance on natural gas imports for power generation. Rising demand for liquefied natural gas (LNG), mostly driven by Asia, renders Singapore’s energy sector potentially vulnerable to volatility and price shocks.

By diversifying its energy mix, Singapore can reduce its dependence on imported LNG and strengthen its energy resilience.

Therefore, the focus should be on controlling the growth of natural gas consumption. It doesn’t matter how laudable Singapore’s solar targets are if the growth in energy consumption offsets renewable energy capacity additions. Singapore should strive toward meeting new energy demand through expansion of solar power deployment and energy efficiency measures.

LISTEN: Heart of the Matter: Talking about the Madrid climate talks, what happened and what’s next?

One critical way to facilitate that is setting a more ambitious Nationally Determined Contribution (NDC) for 2030.

At the Madrid COP25 climate conference last December, Singapore’s Minister for the Environment and Water Resources Masagos Zulkifli announced in his speech that Singapore will update its NDC and communicate a long-term low emissions strategy soon.

Singapore’s updated NDC should translate into more specific targets for long-term energy mix of Singapore. 

Having specific targets for solar and hydrogen will indeed send a market signal and galvanise action toward a greener future in Singapore.

Magzhan Sovetbek is a Research Associate at the Energy Studies Institute, National University of Singapore. Melissa Low is a Research Fellow at the Energy Studies Institute, National University of Singapore.

NEWPORT BEACH, California: Last week’s fretting over the coronavirus was a good illustration of a tug of war that has been playing out in financial markets for a while: Between favourable sentiment and mounting longer-term economic uncertainties.

Until now, at least, that contest has been resolved in favour of ever-higher stock prices.

But investors need to decide if they want to opt for more of the same, by continuing to implement an investment playbook that has served them well, or if they want to treat the viral outbreak for what it is — a big economic shock that could derail global growth and shake markets out of their “buy-the-dip” conditioning.

Entering 2020, investors faced the challenge of balancing favourable short-term market technicals with weaker fundamentals, and doing so with government bonds providing little protection given the very low — and, in some cases, negative — level of yields in advanced countries.

NOVEL VULNERABILITIES

The coronavirus outbreak amplifies two vulnerabilities: Structurally weak global growth and less effective central banks.

It is becoming harder for markets to treat such fragilities as being beyond the immediate horizon, especially with a host of other uncertainties not far behind, including the recurrence of trade tensions, growing realisation of the impact of climate change, technological shocks, political polarisation and changing demographics.

READ: Commentary: China in a coronavirus lockdown – life is normal but not really

READ: Commentary: Tourism in Asia takes a beating after novel coronavirus outbreak

Retail, trade and travel are simple ways to illustrate what is going on in China.

Stores are facing dramatic disruptions involving a virtual halt in traffic, while suppliers are finding it harder and slower to move their merchandise, both within and in and out of the country.

And there is a huge drop in travel to China, dealing another blow to economic activities undermined by less internal mobility.

This virtual stoppage of economic activities is cascading throughout the second-largest economy in the world, and one with considerable regional and global ties. It is fundamentally weakening the country’s services sector, at a time of considerable challenges for manufacturing.

CHINA SLOWDOWN

With both engines of growth now sputtering, internal and external, China will also find it harder to navigate its transition from a middle-income economy.

The country’s increasing “sudden stop” economic dynamics also involve adverse spill-over effects, first and foremost for emerging Asian economies with strong economic and financial linkages with China. 

A weakening China is also a problem for Europe, where the European Central Bank is effectively out of productive ammunition and politicians are yet to implement a comprehensive pro-growth policy package.

And with the virus affecting the movement of people and goods, there is an increased risk of a multi-year process of de-globalisation that neither the global economy nor markets are wired for.

The coronavirus also has the potential to constitute a structural break for markets: A big enough shock that fundamentally shifts sentiment.

READ: Commentary: Coronavirus – Where should Koreans evacuated from Wuhan stay?

LISTEN: Novel coronavirus – The WHO, Singapore’s infectious diseases authority and a global outbreak expert answer your burning questions

NEW GAME PLAN

Previously, markets had been underpinned by the belief that central banks were always willing and able to repress volatility and boost asset prices. That fuelled investors’ fear of missing out on a seemingly never-ending rally.

Until last Friday (Jan 31) when US stocks dropped about 2 per cent, markets’ inclination was to respond to sell-offs by deploying a game plan that worked well in 2019 and early 2020, including in response to shocks such as the US missile attack that killed a top Iranian general and the disruption to half of Saudi Arabia’s oil production.

For the previous year, traders and investors quickly bought every dip in the belief that the latest shock would prove temporary, contained and reversible.

Now, the multi-year gap between elevated asset prices and weaker economic conditions is becoming increasingly unsustainable.

The global economy and markets are getting closer to the neck of a T-junction. What comes after that involves a stark contrast, depending on how policymakers respond.

One way involves recession, financial instability and even more complicated politics; the other, a genuine growth process that validates elevated asset prices in an orderly fashion and opens the way for more constructive politics.

If investors still insist on immediately buying dips, they should do so in a much more differentiated manner by favouring higher-quality issuers that are underpinned by strong balance sheets. 

They should also avoid swapping US assets for more international exposure, which — although more attractively valued — is much less resilient to global economic weakness. 

For the remainder, which is probably most investors, they should consider that this latest shock to fundamentals could prove severe enough to dislodge for a while the bullish market conditioning that has been so critical to this historic stock rally.

Given that the negative economic effects of the virus are yet to be sufficiently absorbed by markets, this also calls for much greater immediate attention to potential vulnerabilities in portfolios, in the form of equity and liquidity risk.

Mohamed El-Erianis Allianz’s chief economic adviser and president-elect of Queens’ College, University of Cambridge

GLASGOW: The UK’s decision not to ban China’s Huawei from being a supplier for its next-generation mobile network has caused ructions.

US politicians are outraged, with Newt Gingrich calling it a “major defeat” for his country.

In the UK, there could be a Tory rebellion against forthcoming legislation on the matter.

In truth, the government had little choice. When you look at the background, the decision is at least understandable – and more complex than just a security issue.

READ: Commentary: Out from the ashes of Brexit, the UK emerges into a brave new world

Mobile phone networks comprise two parts: the core and the radio access network or RAN. The core handles security-sensitive aspects such as user authentication, routing calls, data and so on. The radio network consists of base stations and other networking equipment across mast sites nationwide.

When a user makes a call or uses the internet, a signal from their phone is picked up by a base station and is passed across the radio network to the core, where it is routed to wherever it is supposed to reach.

While your call or data is encrypted, it is decrypted on the base station before being passed on – the base station can therefore see its content.

In the UK, the 5G equipment roll-out is well underway, with more to come. It’s difficult to get figures for the outlay by the four network operators – Vodafone, O2, EE and Three – but the radio network upgrade is certainly most of what is required and is spread throughout the country.

COMMERCIAL REALITIES

Huawei has been banned from supplying the network core, but is to be allowed to supply a maximum of 35 per cent of the radio network equipment. Let’s be clear here: the UK operators were lobbying hard for Huawei not to be excluded.

READ: Commentary: The US-China tech rivalry is fracturing the world and affecting trade, firms and jobs

They are all using the Chinese company’s equipment to some extent in the 5G upgrades to their radio networks. Though they are still having to rethink their 5G plans because of the partial ban, they were facing huge costs and delays to rolling out 5G if the equipment had to be removed altogether.

This is partly because today’s 5G equipment piggybacks onto existing 4G base stations, and both the 4G and 5G kit tends to have to be supplied by one vendor. Banning Huawei would therefore mean replacing both 4G and 5G equipment. Vodafone alone said this would cost the company “hundreds of millions” of pounds.

Secondly, there are only three major radio suppliers: Huawei, Ericsson and Nokia (all of which manufacture in China). Excluding Huawei risked exposing operators to duopoly pricing. Partly for this reason, the government commissioned a review of the telecoms supply chain in 2018.

READ: Commentary: China makes inroads into Europe. That’s creating some discomfort

The resulting report last July said the government would develop a new security framework, and consult with industry on the best way forward. It also highlighted the need for more supplier competition, but there seems no easy solution.

THE SECURITY ISSUE

Without a doubt, the network operators’ commercial interests are potentially at odds with UK security interests over Huawei. People often worry about the threat of “backdoors” in Huawei equipment and software that would allow remote control from outside the UK, but the issue is more systematic security failings in the software that could be remotely exploited.

READ: Commentary: Is Huawei dangerous because it’s Chinese? What about Facebook?

The 2019 report of the board that oversees the Huawei Cyber Security Evaluation Centre (HCSEC) said much of the software “lacks basic engineering competence” and “significantly increased risk to UK operators”.

The board could only give “limited assurance” about managing the risks, and said Huawei’s coding practices make the “job of any code auditor exceptionally hard”. In other words, the verifiers could miss insertions or oversights that might enable security breaches.

Another risk is that equipment suppliers usually have authorised remote access to their hardware to provide support or fulfil a managed services contract, and the equipment needs regular software security updates and bug fixes. Security updates could be vetted by HCSEC, but this would probably be a difficult undertaking to scale. 

There is also a lot of outsourcing in this sector, including to Huawei, which opens up further potential for security breaches.

The UK National Cyber Security Centre, which advises the government, concedes the risks of admitting Huawei, but thinks they can be made “acceptable” by limiting access.

This may be challenging with the changes 5G may bring to mobile networks. For example, connected and driverless vehicles needing to exchange information quickly won’t route all their data traffic via the network core.

Instead, many 5G core functions may take place in the radio network, making it increasingly harder to define Huawei’s permitted area. And with base stations inherently connected to the network core, there is a limit to the isolation which can be put in place anyway.

RISKS AND REWARDS

Overall, however, the government seems to have been caught between a rock and a hard place: faced with wounding the UK network operators and slowing the 5G roll-out, it has sought a compromise.

READ: Commentary: Big Tech is showing some love to the US government – which comes as no surprise

To some extent, this is the consequences of deciding too slowly. Had the UK banned Huawei in 2018 like the US and Australia, the mobile operators’ 5G roll-out plans would have been at an earlier stage. The US also compensated some of its networks for the costs of equipment removal.

The UK government is instead looking to the future. Nicky Morgan, the culture secretary, told the House of Lords on January 28 that the government wants to attract established equipment vendors to the UK who are not already present, to support new disruptive entrants, and reduce barriers to market entry.

On established vendors, she may be referring to companies that make radio network equipment but don’t compete aggressively in this space: Samsung, for example.

As for new entrants, there may be a hope of enticing players who supply different types of networks, such as Cisco or Juniper. There is also significant potential to innovate in 5G networks. The UK’s Testbeds and Trials programme is enabling this and will continue to do so.

For the time being, the government can hardly be enjoying the fallout from its decision. To date, much focus has been on the confidentiality of communications over mobile networks, and risks of spying.

A bigger issue is the need to keep the mobile phone network running. We are in an era where everything from Uber and Deliveroo to most credit card machines cannot function without it

The nightmare scenario is a hostile state-affiliated actor shutting down or damaging the mobile networks. It may have effectively been impossible for the UK to say no to Huawei, but the current compromise is far from ideal.

Greig Paul is Lead Mobile Networks & Security Engineer at the University of Strathclyde. This commentary first appeared in The Conversation.

LONDON: Productivity growth in the UK has stalled since 2008. The puzzle has become so tricky that toilet makers are getting in on the act of suggesting solutions.

The company StandardToilet has designed a tilted toilet, whose seat slopes downward at a 13 degree angle. Its goal is to stop users lingering too long on the lav.

After about five minutes, sitting on a tilted toilet will put a strain on users’ legs, said to be similar to a “low level squat thrust”.

The idea is it would save employers money because, according to the company’s press release, “extended employee breaks cost industry and commerce an estimated £4 billion (US$5.2 billion) per annum” in the UK.

An uncharitable commentator might question where the company pulled this (unsubstantiated) figure from.

But a steady stream of news reports suggests that employers around the world are indeed clamping down on toilet breaks in a bid to improve productivity.

A Chicago-based firm hit the news when a union filed a complaint against it for “bathroom harassment”. The firm, which had introduced swipe cards to monitor toilet use, advised that employees should spend no more than six minutes on the loo per day and even gave gift cards to workers who didn’t use the toilet at all during work time.

Meanwhile, in Scotland, call centre staff were asked to sign a new contract limiting toilet breaks to 1 per cent of their shift – just two minutes for those working a four-hour part-time day. 

In Norway one company required female employees to wear red bracelets while menstruating, to show they were allowed to visit the toilet more often.

TOILET TALK

Time away from the desk or production line may not be an employer’s only concern when it comes to toilet use.

As studies on workplaces as diverse as Japanese-owned car firms in the UK and textile factories in Kenya have found, toilets are also places where workers express anti-company sentiment, share advice and even covertly organise.

A study of Italian factories in the post-war period – an era of union suppression – found that toilets became a focal point for resistance. As one of the few places in a factory that wasn’t monitored, toilets were used as a meeting point as well as a place where anti-company feelings could be more freely expressed and union literature shared.

In one case, a female worker found graffiti accusing the factory boss of being an “idiot and a buffoon” inscribed on a toilet door. Perhaps scared that she would be accused of writing it, she reported the infraction to management.

The door was removed and, to root out the culprit, all workers were forced to write out the phrase in front of a handwriting expert. The guilty party was found and relieved of their position – but, as researcher Ilaria Favretto points out, at least they got to see every worker in the factory repeat the insult.

READ: Commentary: Does the thought of using public toilets make you anxious? You’re not alone

READ: Commentary: Is it okay to hold in your pee?

One thing stands out in all these examples: It’s lower paid, more precarious workers who are more likely to have their workplace activities – and toilet breaks – more tightly controlled and monitored.

Writing about workplace surveillance technologies, economist Joelle Gamble points out that as employers collect more data on their workers, they increase their power over them. In some cases, workers’ wages are directly affected.

Companies using just-in-time scheduling technologies have been cancelling workers’ shifts at short notice when sales are down.

CRITICALLY PLANNED

But is this drive for ever more rigid control of workers’ (bowel) movements actually good for productivity?

A new collection of essays published by Carnegie Trust and the RSA think tank suggests not. Instead, it makes a strong case that good quality work is the key to improving productivity, especially at the bottom end of the labour market, where job quality is poorest.

Instead of trying to optimise every minute of their workforce’s time, employers might be better off improving working life.

Rather than punitive measures, several of the essays argue that giving workers voice and agency is crucial in increasing productivity. New workplace technologies are more likely to be successful when workers feel involved in decision-making.

A report by the Living Wage Foundation makes similar points. Focusing on the retail sector, it argues that standardising tasks while empowering staff to use their discretion is important in improving productivity and profits. This helps improve staff retention and motivation, among other benefits.

READ: Commentary: Are you better off working from home than in the office?

READ: Commentary: Not enough time? Transforming work and sleeping better in a digital world

In a knowledge-driven economy, the mostsuccessful firms are constantly innovating. We need to spread the practices that these firms use – collaboration, decentralisation, autonomous teams – if we want a step-change in productivity.

So the next time someone tries to sell you a productivity-enhancing toilet, don’t just take it sitting down.

Madeleine Gabriel is Head of Inclusive Innovation at Nesta. This commentary first appeared in The Conversation.