Category Archives: Asia

What are the top 3 global trends in the smart grid industry?

Smart grids are a concept that is slowly starting to take shape. Smart Grids can be described as an upgraded electricity network, enabling two-way information and power exchange between suppliers and consumers, thanks to the pervasive incorporation of intelligent communication monitoring and management systems.

That which is usually called a smart grid can be divided into smart grids and smart energy systems. A smart grid contains the whole environment in which smart grid components are implemented, however this can be a hybrid system, in which legacy SCADA systems are part of it. A smart energy system is a specific network, developed as a dedicated smart energy system. Old fashioned legacy systems are not part of the smart energy system. It will be clear that in a world of energy utilities and grid operators, where lead times of 20 to 60 years are normal, a conversion to dedicated smart energy systems will take a long time.

For Smart Grids to deliver their envisaged benefits however, the realization of physical infrastructures alone will not be sufficient and must be complemented with the emergence of new business models and practices, new regulations, as well as more intangible elements such as changes to consumer behavior and social acceptance. Many different stakeholders are involved in this process and different forms of cooperation are already arising.  Many challenges arise to create a smart (energy) world.  I will limit this article to three trends in the smart grid industry.

#1: Consumers are more and more willing to turn into prosumers. It is a combination of the fact that climate change is becoming increasingly visible to everyone. This encourages the sentiment of a necessity to invest in environmentally friendly energy sources. The industry is rapidly developing new smart grid components which support the needs of the consumer while the products are continuously developed and the prices, due to increasing production facilities, are lowering. For example, solar panels are becoming affordable. Government subsidies support the purchase of sustainable energy sources. The public view the effort of the development of smart energy systems in urban areas and centers, and it encourages people to participate in energy saving measures themselves and to invest in environmentally friendly energy sources.

#2: Energy system manufacturers feels the need to smart grid certification. A few years ago security was not an issue. Power-producing companies and grid operators used dedicated networks. Nowadays, so called SCADA networks are connected to office automation and often to the internet. Security has become an important issue. Privacy-related data is transported over the communication infrastructure.  With the development of security risk assessments specific to smart energy systems (encouraged by the US government and the European Committee) and standardized security requirements, it will pave the way to think about certification standards against ones which are yet to be determined. (e.g. NISTIR 7628, ISO/IEC 27019 etc.)

#3: Expansion of existing networks and the conversion to digital networks. The automotive industry, driven by the Kyoto protocol, is quickly changing to more sustainable cars. More full electrical cars and hybrid cars are developed and brought to the public. Some countries subsidize any form of electric transport. The challenge, however, is to expand the current “simple one-direction” power grid to a smart grid environment that has the capacity to supply all the vehicles with energy at the moment the customer needs to refill his vehicle. The largest problem is the small range of full electric vehicles which can be driven in combination with the amount of time to refill the car. Fully digital-controlled networks can provide the load and balance on the net which is necessary to guarantee a reliable grid. Grid operators are working hard on these improvements, however it will still take years to achieve the desired situation.

What is the outlook for the diabetes drug treatment over the 1-3 years?

The outlook for diabetes drug treatment over the next few years is promising for type 2 and type 1 patients. Well known pharmaceutical companies, such as Johnson & Johnson, Novo Nordisk, Abbott Laboratories, Sanofi-Aventis, Merck, Bayer, and Roche are leaders in the diabetes drug and device arena but new companies are involved as well. Market competition will increase with companies setting up operations in emerging markets. China and India, two of the biggest markets are expected to account for much of the growth of the treatment market. This trend will stimulate innovation and price reduction which will provide access to treatments for poorer patients.

A little further down the pipeline is a device/system called The Bionic Pancreas which uses both insulin and glucagon along with a continuous glucose monitor that are controlled by a smartphone. This is truly a game changer and when it comes to market the diabetes world will take notice.

As a person with Type 1 diabetes I often struggle to keep my blood sugars in balance.  It is no easy task to monitor my blood sugar while injecting insulin through an infusion pump to cover the carbohydrates I eat or to correct a high blood sugar.  Balancing food, insulin, stress, and exercise at times can be a monumental task.   I often joke about waving a device over food that can calculate the carbohydrates and automatically dispense the correct amount of insulin to cover the food I eat.

No joke, the team at the Diabetes Unit and Department of Medicine, Massachusetts General Hospital and Harvard Medical School along with the Department of Biomedical Engineering, Boston University may have just invented this device.  It is fondly called the Bionic Pancreas.  

In order to understand the game changing technology, it is important to point out the current technology being used to treat hundreds of thousands of patients with diabetes using insulin.  Insulin is administered in mainly two methods, through a needle injection/pen or an insulin pump.  Calculating the amount of insulin to administer prior to eating a meal or snack requires estimating the carbohydrates as well as being knowledgeable about the effect of protein and fat on blood sugar levels over time.  Many times it is done through trial and error, especially when a new food is introduced.

Monitoring blood sugar is typically done through finger sticks with a traditional blood glucose device.  More and more patients are using a fast growing device called a continuous glucose monitor which gives a number, typically every five minutes, but more importantly arrows that point up, down, or sideways to indicate trends and the rate at which the blood sugar level is moving up or down.

Glucagon, a hormone secreted in the pancreas, works by telling the liver to release sugar (glucose) into the bloodstream to quickly bring the blood sugar level back up before or when it drops too low.  For patients with type 1 diabetes, a synthetic version of glucagon is used in emergency situations such as loss of consciousness due to a severe low blood sugar.

The team working on the Bionic Pancreas used these devices and drugs (insulin pump, continuous glucose sensor, insulin, and glucagon) as well as a smart phone with an app using the algorithm developed by the engineers on the team. 

Overall, my experience on the Bionic Pancreas for five days was excellent.  It was refreshing to not have to think about my diabetes as much as I do on my traditional therapy (an insulin pump and continuous glucose sensor).  The key take-home message is that the Bionic Pancreas improved average blood glucose levels with less frequent hypoglycemia events in adults and adolescents with type 1 diabetes. The primary focus of the team of inventors at this juncture is to invent a dual chambered pump as soon as possible. 

That alone would make me move to this device once it is cleared by the FDA and comes to market.

Sources: http://www.nejm.org/doi/full/10.1056/NEJMoa1314474?query=featured_home#t=articleMethods

Outpatient Glycemic Control with a Bionic Pancreas in Type 1 Diabetes:  Russell, Steven J., MD., Ph.D., El-Khatib, Firas H., Ph.D., Sinha, Manasi, M.D., M.P.H., Magyar, Kendra L., M.S.N., N.P., McKeon, Katherine, M.Eng., Goergen, Laura G., B.S.N., R.N., Balliro, Courtney, B.S.N, R.N., Hillard, Mallory A., B.S.N., R.N., Nathan, David M., M.D., Damiano, Edward R., Ph.D. New England Journal of Medicine: June 2014.

What is the outlook for the global cybersecurity industry and regulations over the next 1-3 years?

“The increased role of Information Technology, and an increasing number of information security incidents, means that security improvements are needed.”

For Europe, much of the focus continues to be upon privacy concerns. We have seen EU countries strengthen the regulations relating to information security in recent years.  For example, the Dutch Data Protection Authority (College Beschrming Persoonsgegevens) has replaced earlier guidelines on the protection of personal data.  These guidelines go much further than previously.  For example the guidelines require a “Plan-Do-Check-Act” cycle, which includes a risk assessment. 

The Dutch guidelines go as far as requiring, depending on the risk assessment, the achievement of high levels of security in accordance with generally accepted security standards (ISO 27002:2007) and also the (Dutch) National Cyber Security Centre’s ICT Security Guidelines for Web Applications.  Similarly, Belgium has propagated new guidelines (“Reference Measures for the Security of Any Personal Data Processing”) which also address the organisation of information security.

It can be expected that other EU countries, which have mostly tended to regulate via specifying precise security controls (for example, mandating the off-site storage of tape backup off-site) will further regulate here too, strengthening the regulation of information security concerning personal data.  It will be interesting to see whether other countries will follow the Netherlands in incorporating information security standards in their regulations, or whether they will continue to only mandate specific security controls.  Incorporating security standards can mean not just specific controls are mandated, but that there must be an appropriate information security organization and management of information security.

Elsewhere, the need to strengthen privacy is not the dominant motivation.  Indeed US reactions to the recent European Court of Justice’s decision on the “right to be forgotten” strongly suggest that Europe and the US have a much different conception of privacy and how to protect it. 

While many in the US agree that information security improvements are required, there are others that believe that more regulation will inhibit innovation.  One alternative is self-regulation by US firms and their adoption of information security standards.  Indeed, I have recently seen US companies adopt information security standards such as ISO 27002, and indeed have begun to press their suppliers in Europe to follow such standards.”

What is the outlook for the global retail banking industries and which geographies and segments will be growing the fastest over the next 12-18 months?

Retail banking will broadly follow regional economic growth patterns over this period, with special consideration to some of the sensitive geopolitical issues in certain regions.  In the U.S., retail banking performance should continue to stay relatively strong as the economy continues to rebound and loan losses remain moderate.  However, more significant growth expectations should be tempered given the continuing regulatory pressures in the aftermath of the financial crisis.

Western Europe and Japan will generally lag behind the U.S. due to slower economic growth, with Latin and South America performing more on par with the U.S.  China should continue to experience robust growth, albeit at a slower pace than in recent years.  The current turmoil with Ukraine and Russia have the potential to significantly impact economic growth throughout Eastern Europe and Russia and negatively impact the retail banking sector in those markets.

From a segment perspective, the mass (or emerging) affluent has the most significant growth potential.   The aging of the baby boomer generation in the U.S. along with the continued growth of the emerging affluent in markets like China and India creates tremendous opportunity for wealth management services.

One other segment that has strong growth potential is the unbanked or underbanked portions of the mass market segment, especially in emerging markets.  As these consumers begin to enter the financial mainstream, there is strong demand for basic banking products, low cost options such as debit-card only products, and online and mobile services, especially among tech-savvy consumers.  For retail banks who compete in this segment, their challenge is to strike the right balance between revenue potential and cost-to-serve while managing the risk of cannibalization within the existing customer base.

 

What are the top trends in the global energy efficiency regulations and are there any regional differences?

“It is better to create a structured framework than prescribe singular solutions”

To reach challenging energy efficiency targets it is important to look at all stages of the energy chain (generation, transformation, distribution and final consumption) and at all sectors (Industry, Residential, Tertiary, Transportation). All energy efficiency regulations in the world’s major energy consuming states address these stages. In my opinion, the European Union Regulations concerning Energy Efficiency represent the benchmark and define a framework in which the top trends in energy efficiency are as follows:

  • Setting Energy Efficiency targets
  • Prescribing products, services & buildings with high energy efficiency standards  
  • Supporting the introduction of Energy Management Systems
  • Promoting systematic use of Energy Performance Contracting
  • Introducing an Energy Efficiency obligation scheme for utilities
  • Providing a comprehensive account of current energy cost to end-users

Other countries’ regulations have more or less the same layout. Below you will find a brief description of each of the aforementioned points.

Energy Efficiency Targets

The importance of targets is in setting a long-term objective and in monitoring progress. Targets can be seen as an “instrument” to motivate energy saving and they are important for the maintenance of a priority, focus and attention. The EU has set a 20% target on energy efficiency for 2020. Other countries have their own targets but not all consider energy as a whole and sometimes focus only on electricity or gas.

Energy Efficiency standards

Specifying performance requirements for energy-consuming items (such as products, services & buildings) effectively limits the maximum amount of energy that may be consumed by the item. A standard is made mandatory by a government body and can be accompanied by the introduction of labeling. This aims to provide end-users with clear and relevant information about the quality of the products, and to guide them towards choosing a product which is more efficient.

In the EU, the Ecodesign Directive provides rules for improving the environmental performance of energy-related products. In the USA there is the US ENERGY STAR program which has a similar scope and structure.

Energy Management Systems

An Energy Management System is a systematic process for continually improving energy performance. Recently the ISO 50001 on Energy Management was released. It is based on the management system model of continual improvement, also used for other standards such as ISO 9001 or ISO 14001. The system needs to:

  • Develop and implement an energy policy
  • Identify main energy users
  • Set energy objectives and measurable targets
  • Implement and operate programs to meet these objectives and targets
  • Check and take corrective action as required
  • Review system continually and improve where possible

Continual improvement ensures that new opportunities are found in all areas where energy savings become a recurring task.

Energy Performance Contracting

Energy Performance Contracting (EPC) is a form of financing. Under an EPC arrangement, an external organization (ESCO) implements a project to deliver energy efficiency and uses the stream of income from the cost savings to repay the costs of the project.

EPC allows the delivery of infrastructure improvements to facilitate that which is lacking in energy engineering skills, manpower or management time, capital funding, understanding of risk, or technology information.

Energy Efficiency obligation scheme

An energy efficiency obligation is a regulatory mechanism that requires obligated parties to meet quantitative energy saving targets by delivering or procuring energy savings produced by implementing energy efficiency measures.

An Energy Efficiency obligation scheme generally has the following features:

  • a quantitative target for energy efficiency improvement;
  • obligated parties that must meet the target (typically, providers of energy such as electricity and natural gas distributors);
  • a system that defines the energy saving activities that can be implemented, measures and verifies the energy savings achieved.

The main advantages coming from the introduction of an Energy Efficiency Obligation Scheme are that there is no impact on national budgets and it is one of the most efficient energy efficiency instruments available for policy makers; furthermore the scheme contributes to the creation of a strong market for energy services.

Comprehensive account of current energy cost

Easy access to data on energy consumption will empower end-users to better manage and control their energy consumption, making more informed choices on devices, energy providers and the impact of energy costs on budgets.

Conclusions

Global energy efficiency regulations tend to create a framework that enables market actors to move towards efficiency “automatically”, in compliance with standards for energy-consuming items, starting a continual improvement through the introduction of an Energy Management System, Energy Performance Contracts, Energy Efficiency obligation schemes and enabling better cost control by end-users. All these are drivers that push efficiency to the best practice levels. This is a low-cost way to ensure optimization in a much more “efficient” way compared to prescribing singular technologies or solutions.

What are the key trends to watch in the Global Mining industry over the next 1-3 years?

The key trends to watch in the Global Mining industry over the next one to three years primarily root into one or both of the big ticket items: Access to Resources and Cost Management.

Access to Resources – Low-Cost Reserves (Producers)

Over the past decade, exploration for many mineral commodities has not been extremely effective at substituting the annual production by new reserves. Although commodity prices have been high and metal production revenues have been robust, most companies have seen their overall reserve base shrinking or have seen the low-cost production being replaced by higher-cost reserves, whilst development timelines through the exploration and development cycle have lengthened and the associated costs from exploration to feasibility have been steadily rising. Companies are aware that in the years to come they will need to be even more rigorous in project development, from the first exploration stages or acquisition, through development to production, so as to have reserves that can be extracted at all-in low costs. A clear focus on operational efficiency and on effective risk management will serve a sustainable low-cost, reserve-based business.

Access to Resources – Security of Supply (Users)

Whilst mining companies will be encouraged to focus on cost-efficient production, the governments of industrial countries will be seeking ways to secure their future supply of raw materials. In the years to come, the G8 and other governments will aim to forward-manage their access to more resources, not to miss out on the availability of mineral resources that are critical to their respective industries. Industrial partnerships will likely see more government involvement, through strategic alliances, pre-guaranteed mineral resource off-take, and other means, all aiming to mitigate potential future scarcity of critical raw materials.

Capital Management & Cost-Efficiency

Financial discipline will be further requested in the coming years. Cost efficiency and business optimisation, again at every step of the business development and mine production, is necessary to lower the all-in cost of production. Volatility seen on the capital markets has introduced further uncertainty of the availability of funds; in quantum, source and in timing. Projects that demonstrate a clear, cost-effective focus and present greater returns through robust capital management, cost optimisation and cost-efficient project performance, will be having an advantage in the on-going competition for funds. Along with this general trend, companies and financiers will be developing more integrated funding solutions in support of their project development.

 

What would be the global and regional social economic and political consequence on governments and industry financial and business reporting using eXBRL?

Introduction to eXBRL (Extensible Business Reporting Language)

Extensible Business Reporting Language (eXBRL) provides the following:

1. Global standard method for the electronic exchange of business information (replacing 100s of proprietary methods). XBRL is also a method of expressing meta-data and semantics, that is how the business information can be exchanged. Basically, this is what the XBRL Specification provides.

2. Global agreement of the semantics of financial reporting concepts and business rules. These concepts and rules, the semantics, have already been created for IFRS and US GAAP. These two taxonomies provide agreed upon semantics against the respective set of accounting standards. So, rather than each company defining it own financial reporting terms and business rules, standard taxonomies of concepts and rules have been created which enhances comparability across companies.

3. An organization, comprised of 400+ members from around the world which stands behind and maintains XBRL. The non profit organization XBRL International provides this. XBRL will cause a fundamental shift in infrastructure relating to the creation, storage, transmission and consumption of business information as the cost/benefit model for creating and using such information has substantially changed.

Global social and economic impact of using eXBRL by governments, public sectors, and industries

eXBRL is useful for several reasons:

  • Large scale planning and budgeting process at local, regional, and national level
  • Identifying country resources and possibilities of  exchanging and moving capital through investments 
  • Tax and regulatory compliance of international trade, taxation and tariff regulations
  • Comparative analysis across industries, sectors within a country or across countries
  • Uniformity of definition od financial, and accounting terms
  • Investment decision by investors and analysis
  • Fiscal decision based on financial and nonfinancial data presented using different criteria and scenarios
  • Reusing format with updated data
  • Applying accounting standards and concepts uniformly

There are many characteristics of XBRL which contribute to its overall benefit. The following is a summary of the features of XBRL. 

XML Standard: One way to solve a problem, rather than 100s of different ways of transferring data. Lowered costs of training staff (only have to learn XML). XBRL is XML. Lots of standard software for working with XML. Reduced training costs.

Open Standards Provide Leverage: Open standards provide leverage. You can get for free things you would typically have to buy and you are not locked into one specific vendor.

COTS Software: Commercial off-the-shelf software can be used, rather than building custom, internally created and supported applications.

Cheap Business Rules Engines Improve Data Quality: Robust, validation engine and validation infrastructure moves the creation of business rules from programmers to business users. One-to-many validation rather than one-to-one programmatic validation.

Flexible, Extensible, Comprehensive Solution: XBRL is quite comprehensive in what it can achieve. Its flexible, extensible nature makes it extremely effective.

Structured versus Unstructured Data: People often miss the fundamental reason for XBRL/XML: structured versus unstructured data, meaning and “context” attached to data, truly can be exchanged effectively. Exchanged between trading partners, between entities and regulators, exchanged internally. Properly structured data is fundamentally easier to reuse between automated applications. Unstructured data is fundamentally difficult to reuse unless manual intervention is used.

Automated Exchange of Data: All the above adds up to the automated exchange of data within a single organization (subsidiary to parent, one application to another), or within a supply chain (between one company and another, between a company and its regulators).

The following is a brief list of some of those using or preparing to use XBRL:

  • APRA (Australian Prudential Regulatory Authority) – 12,000 regulated organizations, went live with XBRL in 2000
  • FSA (Financial Services Authority) – regulates 70,000 financial institutions in the UK
  • Korean Stock Exchange – regulates approximately 850 listed entities; (53 stock exchanges around the world)
  • EU – $1.2 million grant to jumpstart XBRL-based financial reporting in the European Union.
  • Dutch Government – financial reporting by the Dutch Water Board; will expand to 12 Dutch providences for reporting by municipalities. Currently the Dutch Government is building a taxonomy for all information collected by the government. This XBRL taxonomy will be used to collect information by all agencies of the Dutch Government.
  • CRAS – Credit Risk Assessment Services currently uses EDI to exchange credit risk information; they are building a solution to replace the EDI exchange mechanisms with XBRL.
  • CEBS – The Committee of European Banking Supervisors (CEBS) is building Common Reporting (COREP) taxonomy for solvency ratio reporting by 9000 credit institutions and investment firms to 25 supervisors/regulators in Europe under future EU capital requirements regime. This is part of Basel II. They are also creating FINREP, a financial reporting taxonomy for these same financial institutions, this will be modelled using the Belgium Banking Taxonomy as a starting point.
  • US SEC – The United States Security and Exchange Commission (SEC) announced in February 2005 that public companies could begin supplying XBRL data for specific EDGAR filings. This voluntary filing program is to help the SEC evaluate XBRL.

A pattern exists in these users. The first wave of use of XBRL is being made by regulators who already collect data from those they regulate. Each of these regulators already had some proprietary format for gathering information or used paper of unstructured formats such as PDF.

SourceFINANCIAL REPORTING USING XBRL – IFRS AND US GAAP EDITION (2006-03-01), © 2006 UBmatrix, Inc.

What are the top trends in the global Insurance industry in 2014 and which segments will be the growth drivers?

Top Trends in the Global Insurance Industry in 2014

In 2014, businesses will continue to come out of their shell and make their way forward.  In response to pressure from the government, shareholders, suppliers and creditors, budget spending will increase on risk management.  This is not to transfer more away but rather to retain as much as possible.  Businesses will be looking to partner with insurers who offer cost effective risk management and business continuity programs and services aimed at saving them premium dollars and, more importantly, in helping them attain a reputation for distinguished accountability.  This will remain important in 2014 as the scent of fear of corporate greed and dishonesty continues lingering on the trail ahead of us.             

Advancements in technology will continue to drive growth as well.  In 2014, insurers will continue developing applications which allow customers to communicate using their mobile devices.  Securing this personal information and managing it will continue to be a challenge. 

Lastly, insurers will continue introducing new products and enhancing existing coverage offering protection from cyber attacks, as more and more customer’s move on-line.  

What key trends will shape the global Solar Energy industry in 2014 and which regions will have the most growth potential?

Key trends: 

Solar vs. Utilities (grid parity, distributed generation, energy storage)

For years, utilities thought of solar as an ‘eco-geek’ gadget and ignored it. But the costs of solar energy have dropped each year and in 2013, solar energy reached grid parity in several markets around the world. In those markets, solar no longer needs public support to exist. It’s a first choice generation technology, especially for customers who want to generate energy for their own use (distributed generation).

Because solar is now gaining momentum, you can observe utilities trying to fight it, especially in the US, Spain and Germany. US utilities, through their Edison Electric Institute, realized that distributed generation is a serious threat to the revenues of utilities. The Institute even published a report about it: “Disruptive Challenges: Financial Implications and Strategic Responses to a Changing Retail Electric Business”. In Germany and Spain, they lobbied for and succeeded in national government backing of solar incentives.

The utility companies are not only losing the battle, they will lose the war in the long run. A utility company that makes it harder for customers to connect PV systems to the grid will only entice and encourage them to invest in energy storage and go completely off-grid.

Fortunately, some utility companies, instead of fighting the inevitable, understand what is really happening. Right now they are re-inventing themselves and trying to benefit from the solar PV technology. German RWE admitted that they invested in solar too late and are redefining their strategy now. Finnish Fortum integrated solar into their sustainability commitment and are now discussing the creation of a “solar economy”.

In 2014, the PV industry will be shaped by solar companies offering even more affordable solutions for distributed generation and energy storage.

Regions:

  • UK

The UK is the best solar market in the EU right now. The government is specifically focused on solar. In April, the UK government published its solar strategy focusing on distributed generation and innovation. With a stable economy and confident investors, the government’s goal of 2.5 GWP of solar per year is achievable.

  • US

It’s a huge market that has only recently began to develop. As SolarCity surmised in its report: We haven’t even scratched the surface yet. Wall Street is realizing it should de-invest from utilities and focus on solar PV solution providers.

  • China

The country is developing very quickly and is hungry for energy. China’s PV manufacturing capacity is enormous. Some claim it is even too big. The government doesn’t want its companies to go out of business so it is subsidizing huge PV projects in China.

  • India

India is a huge market and has very good solar resources. Solar distributed generation allows for the delivery of power despite a poor electric distribution network.

In conclusion, 2014 will be a very interesting year for the PV industry. It will establish a new balance of power with the utilities, especially in the aforementioned markets.  

What impact will the global trends have on the Animal Health Industry over the next year?

Regarding technology and process, when we talk about global trends in Animal Health Industry, comes up Biotechnology. Research in biotechnology fields, such as genomics, proteomics, and molecular techniques, have the potential to impact the Animal Health Industry. We could describe some products likely to emerge: DNA-based products, Real-time diagnostics and testing kits to confirm pathogens. Other focus area within animal health that presents opportunity to develop is vaccine delivery technology.

So, the scenario that we could expect over the next years is that the biotechnology will drive product development and technology innovation in the Animal Health Industry.