India announces record year for wind energy

Posted on 04/03/201704/06/2017 by Ben Debski

On April 2, India’s Ministry of New and Renewable Energy (MRNE) announced the addition of 5,400 mW of wind power capacity between April 2016 and March 2017, far exceeding its 4,000 mW target. Roughly 2,000 of the new megawatts were added in March 2017 alone.

“The Ministry of New and Renewable Energy has set another record”, the MRNE said in a statement. “This year’s achievement surpassed the previous higher capacity addition of 3,423 mW achieved in the previous year. During 2016-17, MRNE has taken various policy initiatives in the wind energy sector that include [the] introduction of bidding.”

India is the world’s third-largest greenhouse gas emitter, behind China and the US

Only nine states in India have strong enough gusts to reliably generate electricity. The greatest capacity last year was added in Andhra Pradesh (2,190 mW), Gujarat (1,275 mW) and Karnataka (887 mW). Madhya Pradesh, Rajasthan, Tamil Nadu, Maharashtra, Telangana and Kerala also contributed to the bumper total.

The need for renewable energy in India is clear. The country is the world’s third-largest greenhouse gas emitter, behind China and the US. It is also set to become the world’s third-largest energy consumer by 2020. This is driven by the boom in access to power in recent years, with electricity coverage expanding from 51 percent in 1991 to 79 percent in 2012. Consequently, there is increasing concern that India’s power grid may be unable to keep pace with demand in the near future, which could seriously curtail the country’s economic growth.

Fortunately, renewables have become much more prevalent over the past three years. India now has over 50,000 mW of renewable power, 55 percent of which is provided by wind farms. Today, renewables comprise 16 percent of total installed electricity capacity – a figure that is set to grow as the state of Gujarat announced the construction of a 63 mW wind project in Devbhumi Dwarka district on March 31.

At present, India continues to import a great deal of renewable energy from neighbouring states. For example, Indian conglomerate Tata Group has large shares in several hydropower stations in Bhutan, a country that relies heavily on electricity exports to India. However, with growing infrastructure, India can become increasingly self-reliant over the next few years.

China reaffirms full commitment to Paris Agreement and urges others to follow

Posted on 03/30/201704/05/2017 by Ben Debski

Donald Trump’s dramatic reversal of Obama-era environmental policies has been met by a resolute affirmation from Chinese authorities that the country is fully committed to honouring its obligations to the Paris agreement. The announcement was made on March 29 by Foreign Ministry spokesman Lu Kang, who said to reporters: “President Xi Jinping said in January this year at UN headquarters that China will continue to make efforts to deal with climate change and we will honour our obligations 100 percent.” Lu stopped short of specifically referring to Donald Trump’s recent actions, but called on all signatories to the agreement to uphold their commitments. “All countries, including the US and China, have made contributions, and we still believe that all parties should go with the tide, seize the opportunity, fulfil their pledges and implement the agreement”, he said.

Donald Trump has famously declared climate change to be a hoax invented by China

Trump, who has famously declared climate change to be a hoax invented by China, released a sweeping executive order on March 28 that will act to expand energy extraction in the US and dismantle the Clean Power Plan put in place by his predecessor. Trump has demonstrated an intention to starve the Environmental Protection Agency of funds, having proposed a 31 percent cut to its budget. Addressing the issue of climate change, a Whitehouse official said: “It is an issue that deserves attention…but I think the President has been very clear that he is not going to pursue climate change policies that put the US economy at risk. It is very simple.” He further elaborated that he believed the Trump administration could both “serve the environment and increase energy independence at the same time”.

In stark contrast to the US, China’s most recent five-year plan incorporates large-scale investment in renewable energy alongside ramped up restrictions on coal power. The scale of Chinese investment in renewables already far outstrips that of the US, but a divergence in policy positions will pave the way for China to become increasingly dominant the sector.

This shift in leadership has been underscored by Miguel Arias Cañete, European Commissioner for Climate Action and Energy, who tweeted about the change during a visit to Beijing:

A new climate era has begun, and the EU and China are ready to lead the way. #ParisAgreement pic.twitter.com/muw4pu0Mxv

— Miguel Arias Cañete (@MAC_europa) March 29, 2017

For a more in-depth analysis of China’s growing dominance in clean energy, look out for the upcoming spring/summer 2017 print edition of The New Economy.

Grupo Mexico acquires US railway for $2.1bn

Posted on 03/29/201704/04/2017 by Ben Debski

On March 28, Mexican mining company Grupo Mexico announced its $2.1bn acquisition of Florida East Coast Railway Holdings (FEC) from Fortress Investment Group. Grupo is one of Mexico’s biggest copper miners and freight train operators. The deal secures the company a 351-mile railway between Miami and Jacksonville, and is part of its wider plans to expand US links.

“The acquisition of FEC is an important strategic addition to our North American transportation service offering”, Grupo President Alfredo Casar said. “[It] will significantly enhance the scope, scale and diversification of our service.”

President Trump’s plans to nullify NAFTA could make it harder for Mexican companies to transact business across the border

Grupo currently operates largely in Texas, at five crossing points on the US-Mexico border. It also has connections with eight seaports. Meanwhile, FEC services 550,000 wagonloads of industrial produce every year, from aggregate to chemicals, metals and lumber. Its ties to Jacksonville-based rail operators CSX and Norfolk Southern were also an attraction for Grupo.

To fund the purchase, the Mexican firm will pay $350m cash and shoulder $1.75bn of debt.

Despite the headway already made, Grupo’s huge expansion into the south-eastern US could be derailed. President Donald Trump’s proposed plans to nullify NAFTA are a cause of concern, as they could make it harder for Mexican companies to transact business across the border. Grupo’s hopes of maintaining low-tariff copper exports will be of particular concern in this regard.

Furthermore, the latest deal will now face scrutiny by US regulators, which have recently renewed their emphasis on market competition. For example, in 2016, the US Surface Transportation Board proposed reducing red tape to make it easier for industrial customers to change railroad service providers, which will ultimately increase competition between freight train companies.

Such moves fit with Trump’s recent executive order that called for the scrapping of “outdated, unnecessary or ineffective” regulations. But in the case of a Mexican firm gaining a foothold on US soil, a territorial Trump government could well make an exception and try to block the deal.

India makes biometric database registration mandatory for tax returns

Posted on 03/28/201704/04/2017 by Ben Debski

Over a billion Indians are already registered on the world’s largest biometric identification system – known as Aadhaar – which allows Indian citizens to be recognised for the provision of state benefits. The system uses iris scans and fingerprint information to issue a unique identity number. Inclusion on the system was initially voluntary, but new legislation has now been pushed through making Aadhaar necessary for filing tax returns and acquiring a mobile phone. On March 27, this controversial step was locked in by a Supreme Court ruling, which ordered that the government could not be stopped from using the biometric identification system in such a way.

In a notification on March 16, the department of telecommunications ordered Indian mobile service providers to re-verify all existing customers using their unique Aadhaar identity number and biometric details. The deadline for completion is February next year, at which point all unverified mobile phone numbers will become illegal. Similarly, a recent bill passed through parliament will make it mandatory for each person to quote their Aadhaar number when filing an income tax return.

Fears have surfaced that biometric identification is being pushed too far, and that a countrywide system constitutes a form of state surveillance

The move has been met by criticism from multiple angles, with many questioning the potential implications of a misuse of the data. Fears have also surfaced that biometric identification is being pushed too far, and that a countrywide system constitutes an uncomfortable form of state surveillance. Furthermore, the legislation was pushed through parliament as a finance bill, prompting anger that the government bypassed the scrutiny that a non-finance bill would have received. Further fuelling criticisms is the fact that that the Supreme Court had initially ruled that supplying biometric data to the government must be a voluntary decision.

That said, government officials remain enthusiastic about the potential benefits of the scheme, citing large gains in efficiency and the establishment of a powerful tool against corruption. Nandan Nilekani, who was previously Chairman of the Unique Identification Authority of India, told the Hindustan Times in an interview: “We have seen many instances in the past where people have held multiple PAN numbers and evade taxes. Since more than a billion people already have the Aadhaar number, linking the two will go a long way in dealing with the issue of tax evasion and curbing black money.”

UK Government calls for access to encrypted messages

Posted on 03/27/201704/03/2017 by Ben Debski

UK Home Secretary Amber Rudd has said intelligence services need to have access to encrypted messaging services, specifically WhatsApp, following the recent attack in Westminster. Her statement comes after reports that Khalid Masood, the man behind the incident, had connected to WhatsApp in the minutes before it took place. During an appearance on BBC One’s Andrew Marr Show, Rudd said the inability of intelligence services to access services such as WhatsApp “is completely unacceptable; there should be no place for terrorists to hide”.

“It used to be that people would steam open envelopes or just listen in on phones when they wanted to find out what people were doing, legally, through warranty. But on this situation we need to make sure that our intelligence services have the ability to get into situations like encrypted WhatsApp”, Rudd said. While reports have emerged that Masood connected to WhatsApp before the attack, the security system the app uses prevents agencies knowing what, if anything, was sent or received.

WhatsApp, which is owned by Facebook, uses end-to-end encryption to protect conversations, rendering them accessible only to participants. Messages are even inaccessible to the company itself. WhatsApp representatives have previously stated that privacy is a key feature of the app. In the past, its adherence to security has seen it temporally blocked in Brazil for refusing court requests.

Khalid Masood connected to WhatsApp before the Westminster attack, but the app prevents agencies from knowing was sent or received

The situation shares a number of similarities with Apple’s refusal to develop a backdoor to the iPhone that belonged to San Bernardino shooter Syed Farook. Apple refused to build an accessible custom operating system, with the FBI taking the company to court in an attempt to force it to do so. The case was dropped when the FBI announced it had found its own way into the iPhone, but did not disclose what that was.

Aside from the right to privacy, the challenge with encryption is that when workarounds are built into a system, a new door is opened for hackers. While Facebook and Apple may be able to build an encrypted system that is accessible on request, it would only be a matter of time before non-government agencies discovered the same exploit.

Twitter considers paid membership service

Posted on 03/24/201703/30/2017 by Ben Debski

Twitter could be preparing to roll out a paid subscription service in a fresh attempt to grow its plateauing user base. After 11 years of running as a free service, Twitter is considering whether to build a premium version of its site, introducing an improved TweetDeck for paid users.

According to company spokeswoman Brielle Villablanca, the company is currently conducting a user survey “to assess the interest in a new, more enhanced version of TweetDeck”. At present, TweetDeck is a tool that allows better management of Twitter accounts, with a more functional interface than its parent website.

The premium membership scheme could offer Twitter a way to monetise its services

She continued: “We regularly conduct user research to gather feedback about people’s Twitter experience and to better inform our product investment decisions, and we’re exploring several ways to make TweetDeck even more valuable for professionals.”

While not yet confirmed, the premium membership scheme could offer Twitter a way to monetise its services. The social media site is currently struggling with its advertising revenues, which are the firm’s only major income stream. Despite significant growth in the online advertising market, Twitter’s ad revenues are now in decline, and the company has repeatedly failed to turn a profit since its founding 11 years ago. Its social media rivals, however, have succeeded in capitalising from online advertising, with Facebook reported to generate approximately $7.25bn quarterly from both desktop and mobile ads.

In February, Twitter posted its weakest quarterly growth since its stock market floatation in 2013, reporting an annual net loss of $457m. In an effort to cut costs, the social media giant has recently cut over nine percent of its workforce and ditched its popular video-sharing app, Vine. Despite such efforts, Twitter founder Jack Dorsey has warned turning a profit will still prove difficult, particularly amid escalating competition for online ad spending.

Although the site boasts a host of high-profile users – President Donald Trump being perhaps the most notable – Twitter has so far failed to convert its popularity into profit. Diversifying its revenue stream might just offer the struggling site a new way to capitalise on its service.

China signs $6bn mining deal with Australia

Posted on 03/24/201703/29/2017 by Ben Debski

March 24 saw Chinese construction giant CSCEC sign a $6bn memorandum of understanding with Sydney-based BBI Group to build a new mining facility in Pilbara, Western Australia. The state-owned Chinese firm will construct the Balla Balla mine at Whim Creek, which will be capable of producing between six and 10 million tonnes of iron ore per year, as well as a 162km railway and a dedicated export station on the north-west coast.

The project will create 3,300 jobs once underway in 2018, and 900 permanent jobs when finished. BBI, which is owned by the Todd Corporation, said it was pleased with CSCEC’s agreement to employ “on-the-ground”, Pilbara-experienced subcontractors for the project, rather than fly-in fly-out equivalents.

The announcement was made at a Canberra meeting attended by Australian President Malcolm Turnbull and Chinese Premier Li Keqiang. A BBI spokesperson said that their presence “confirms the strength and international significance of the BBI Project”, adding that the company is currently considering “a number of potential Chinese iron ore customers”.

The news comes after BBI signed a state agreement with the former Western Australia Government in January that gave the project the green light. Analysts believe that the new infrastructure will also benefit local mining companies, since Rio Tinto, BHP Billiton and Fortescue Metals Group presently dominate the Pilbara region.

Since signing a free trade agreement in 2015, China has become Australia’s biggest trading partner

Li further announced at the Canberra meeting that China will remove its last remaining restrictions on Australian beef imports, which were installed in 2013 in what many said was a protectionist move by Beijing. “Australian exports play a major role supporting China’s growth”, Turnbull said, adding that the country’s beef exports to China already constitute $400m per year. “Our high-quality, clean, green agricultural produce supports China’s food security.”

Since signing a free trade agreement in 2015, China has become Australia’s biggest trading partner, all the while maintaining its position as the world’s largest consumer of commodities. Western Australia contains copious natural resources besides iron ore, including petroleum, gold, aluminium and nickel. In the context of increasingly jagged Washington-Canberra relations and recent moves by China to proposition alternatives to the failed Trans-Pacific Partnership agreement, an upswing in bilateral deals between Australia and China seems to be the way forward.

Notwithstanding, it is questionable whether such increased integration would be enough to offset the economic damage that could be done to Australia by an escalating trade conflict between China and the US. Former Australian Foreign Minister Bob Carr recently said that such a process “would be disastrous for the world [and] really bad for this region”, given the potential for Chinese growth to be cut. In the event of a weaker Chinese market, Australia would likely have to start looking elsewhere for deals in order to fill the gap.

Soundcloud completes $70m debt round

Posted on 03/24/201703/28/2017 by Ben Debski

Popularity has not been enough for Soundcloud, with the company being forced on a $70m round of debt funding to support its efforts towards financial sustainability. The deal comes after reports that the company was struggling either to find a buyer or to raise $100m in necessary funding.

The latest round of debt funding comes from investors Ares Capital, Kreos Capital and Davidson Technology. As reported by TechCrunch, a spokesperson for Soundcloud said the latest round of funding would allow the company to invest in the technology and personnel resources needed to achieve its predicted goal of 2.5 times year-on-year growth in 2017. The latest round brings to total amount raised by the company to $320m. In 2014, investors put the value of the company at $700m.

Spotify has never turned a profit despite having 50m paid subscribers

Differing from competitors such as Spotify and Apple Music, Soundcloud has a focus on user-generated content. Users upload tracks or podcasts to the service, much like YouTube, with fellow users able to listen to content on both mobile and desktop devices. The company touts its selection of tracks by up-and-coming artists, most of which can’t be found anywhere else, as its strongest asset.

Like Spotify and Apple music, Soundcloud has a number of paid options for ad-free and offline listening. It debuted a $9.99 per month tier last year, but in February it began offering a $4.99 subscription level as well. The lower tier subscription offers offline listening, no ads, and is half the price of its competitors, but restricts access to premium tracks hosted on the service.

Despite the popularity and increasing ubiquity of music streaming services, the business model they operate under is yet to truly prove itself. Spotify has never turned a profit despite having 50m paid subscribers, with the vast majority of its income going to paying record label royalties.

Coal reaches turning point in key markets

Posted on 03/23/201703/27/2017 by Ben Debski

On March 22, Greenpeace and other environmental groups released a joint report that underscored a global shift away from coal energy, driven largely by policies in Asia as well as the improved commercial viability of green power. The report, titled Boom and Bust 2017, found that the number of new coal plant construction projects dropped by almost two thirds over the course of 2016. Furthermore, over 100 projects in India and China have ground to a halt, with financial backing for coal seeing a dramatic drop in both countries. Pre-construction activity has also slumped by 48 percent, implying that the shift away from the fuel is consistent throughout the project pipeline.

“It’s not normal to see construction frozen at scores of locations, but central authorities in China and bankers in India have come to recognise overbuilding of coal plants is a major waste of resources,” said Ted Nace, Director of CoalSwarm. In China, the move away from coal has been driven by a clampdown on coal capacity by authorities. A series of new restrictions have been implemented, including a cap on capacity at 1,100 gW. In line with this, the amount of new coal power capacity authorised dropped by a massive 85 percent.

India already has enough coal-fired plants to meet demand through to 2019

According to Lauri Myllyvirta, senior global campaigner on coal and air pollution at Greenpeace: “China all but stopped new coal projects after astonishing clean energy growth has made new coal-fired power plants redundant, with all additional power needs covered from non-fossil sources since 2013.”

In India, the decline is driven in part by the fact that capacity has outstripped supply. Notably, in June last year, the Ministry of Power recommended that developers curtail their plans based on a projection that India already had enough coal-fired plants to meet demand through to 2019. The report also stated that the country is currently in the midst of a “solar power revolution”, making renewables increasingly attractive for investors. As a result, banks and other financiers have been reluctant to fund coal-powered projects.

Combined, China and India accounted for 86 percent of coal power built globally throughout the period of 2006 to 2016, meaning the simultaneous slowdown across both countries has global implications. Indeed, according to Myllyvirta: “2016 marked a veritable turning point.”

Huawei brings IoT to smart city plans

Posted on 03/22/201703/24/2017 by Ben Debski

The first day of CeBIT 2017, which began on March 20, saw Huawei, the world’s largest telecommunications equipment producer, announce a renewed collaboration with Honeywell International to develop smart buildings and smart city projects. The new joint offering will take advantage of the Internet of Things (IoT) and is designed to make it easier for civic administrators to manage infrastructure.

Huawei said that its partnership with Honeywell, a US conglomerate that offers everything from consumer products to engineering services and aerospace equipment, is designed “to help make buildings more stable, secure and energy efficient”. Huawei plans to use the Niagara Framework, which is owned by Honeywell’s independent business. The intention is to limit energy consumption through better heating and cooling controls, alongside all-round better management of electrical appliances that are built into the infrastructure itself.

This is one of a series of global smart building projects that Huawei has been developing over the past few years. The push already incorporates 400 partners in 40 countries, from Kenya to the Netherlands.

By 2018, there will be three billion connected devices in smart cities across the world

Its most recent collaboration with Honeywell, in Longgang, China, saw Huawei’s cloud storage facilities, data centres and other infrastructure used in conjunction with Honeywell’s components to create automated heating, ventilation and air conditioning systems, alongside security and fire management infrastructure. The most impressive aspect of the project was the integration of all these elements and the linking of multiple buildings via Huawei’s cloud-based Intelligent Operation Centre solution, with a view to making the administration of multiple buildings more efficient.

Speaking in November, Victor Yu, the Huawei’s President of Industry Marketing and Solutions, highlighted the need for collaborative partnerships in moving forward with such ambitious projects: “We think a smart city is a very complicated system and one company cannot do all the jobs itself.”

CeBIT, the world’s largest technology expo, is held every year in Hanover, Germany, showcasing the latest offerings from hundreds of start-ups and a handful of large names, including Intel, Hitachi and Brother. So far this year, it has seen numerous interesting announcements, including a guest appearance by Edward Snowden and the revelation that Huawei will open 15 new labs across Europe and Africa.

Research and advisory firm Gartner has estimated that, by 2018, there will be three billion connected devices in smart cities across the world, and that two thirds of these will be rooted in smart homes and commercial buildings. By getting ahead in the game, Huawei is well-positioned to be a key future player in the rapidly emerging IoT market.

Airbnb becomes latest Silicon Valley titan to take on China

Posted on 03/22/201703/24/2017 by Ben Debski

Undeterred by the fates of fellow US tech giants that have tried and failed to take on China, Airbnb has announced a new plan to tap into the fast-growing Chinese market. The $31bn hospitality start-up has chosen the name ‘Aibiying’ in a bid to capture the attention of Chinese consumers. The name can be translated as “to welcome each other with love”, and is part of a broader effort to localise the platform. The company will also triple its staff and double its capital investment in the country.

Domestic competition, regulatory hurdles, and political restrictions have made it notoriously difficult to establish a foothold in the Chinese market. Many companies – including Facebook, eBay and Uber – have struggled in the past to gain any ground in the country.

This said, Airbnb’s co-founder Nathan Blecharczyk has long been optimistic about the company’s potential in China. In a blog post last year, he said that “China, in particular, has embraced the sharing economy”, quoting figures that show sharing economy platforms are expected to represent 10 percent of GDP by 2020. Furthermore, the platform has already struck a chord in the Chinese market. “China is Airbnb’s fastest growing market for outbound travellers. We’ve seen a 500 percent increase in outbound travel from China in just the past year. And since 2008, there have been over two million guest arrivals from China at Airbnb listings worldwide”, Blecharczyk said.

Domestic competition, regulatory hurdles, and political restrictions have made it notoriously difficult to establish a foothold in China

While the company is directing much of the push toward Chinese overseas tourism, it is also aiming to carve out a greater domestic presence. It has launched a new programme called “trips”, which will offer city tours in Shanghai. It has also reportedly succeeded in reaching regulatory agreements with Shanghai, Shenzhen, Chongqing and Guangzhou.

According to Airbnb CEO Brian Chesky: “There’s a whole new generation of Chinese travellers who want to see the world in a different way. We hope that Aibingyi and our Trips product strike a chord with them.”