Hi everyone!!

It's been a while...dropping by to share a very good article which has caused me some delay in submitting a very important document to the client.

Luckily my client called me up to remind me...

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Speeches, Testimony, Papers
Global Economic Prospects 2008/2009: Hoping for a Global Slowdown and a US Recession
by Michael Mussa, Peterson Institute

Paper presented at the thirteenth semiannual meeting on Global Economic Prospects
April 3, 2008

© Peterson institute for International Economics. All rights reserved.

Overview

After four years of average annual global real GDP growth of better than 4 1/2 percent, recent data indicate that the pace of advance is slowing in the major industrial countries, with the US economy on the verge of, and perhaps already in, outright recession. So far, the evidence points to less of a slowdown in other industrial countries, while most emerging-market economies appear likely to maintain quite strong, albeit somewhat slower, growth.

Meanwhile, world consumer price inflation (on a 12-month basis) is up from barely 2 percent seven years ago to nearly 5 percent as of February 2008. Among both industrial (except for Japan) and major emerging-market countries, inflation is now running at, or in most cases somewhat above, rates consistent with policy objectives. Driven by persistently rising global demand, commodity prices continue to surge upward across the board, especially measured in US dollars but also in terms of the rapidly appreciating euro.

In this situation, the world economy really needs what is now forecast for 2008/2009: a significant slowing of economic growth, down to 3.8 percent (year over year) in 2008 from 4.7 percent in 2007.1 This slowdown will be led by a decline of demand growth in the US economy, which is both pronounced and extends over a considerable period. Indeed, in view of the exceptionally aggressive easing of macroeconomic policies already in place in the United States and the likelihood of monetary policy remaining highly accommodative so long as US financial markets remain under stress, it is now desirable that real GDP growth for 2008 fall to a forecasted rate of barely more than 1 percent (year over year)—an outcome consistent with a very mild and brief recession. Reflecting some risk of a somewhat deeper and more prolonged recession in the United States, the growth forecast for 2009 (year over year) is set at 2 percent.

For the rest of the world, a mild US recession in 2008 will have a modest negative effect on real GDP growth, with more significant impacts in Mexico and Canada. In countries where the slowdown threatens to become excessive and inflation is under control, some easing of monetary and perhaps fiscal policy is both likely and appropriate. More generally, however, it is too soon to call for a general and significant easing of macroeconomic policies. A general slowdown in global economic growth is needed to cool the clearly apparent upsurge in worldwide inflation.

Some countries, including Australia, China, and Sweden, have recently tightened monetary policies in efforts to forestall inflation. Other countries, including Canada and the United Kingdom, have eased monetary policies modestly in response to weakening economic growth. Quite appropriately, however, no country has so far followed the lead of the Federal Reserve in aggressive monetary easing.

As the custodian of the world's second most important currency, the policy of the European Central Bank (ECB) is particularly noteworthy. Inflation in the euro area is running more than a percentage point above the ECB's announced objective. The euro area economy has recently been growing significantly more rapidly than its potential rate of about 1 1/2 percent. The unemployment rate has fallen half a percentage point below the minimum reached in the last expansion. Key monetary aggregates are surging at rates well above their desired target ranges. In this situation, one would normally have expected the ECB to have raised its key policy interest rate a further 100 basis points since last summer.

Instead, with financial turbulence spreading to some extent from the United States to euro area financial markets and institutions, with evidence that euro area economies are beginning to slow, and with a sharp appreciation of the euro against the dollar, which is likely to slow growth and impede inflation, the ECB has wisely held back from further interest rate increases. With the euro area economy now expected to expand by about 1 1/2 percent this year (in line with potential), the timing and direction of future adjustments in ECB interest rates remain—appropriately—dependent upon the evolving balance of risks for inflation and economic growth.

For Japan, the strengthening of the yen against the dollar in recent months and weakening of exports to the United States, together with likely weakness in domestic demand growth, suggest a further write-down in the forecast for real GDP growth for 2008 to 1.2 percent (from 1¾ percent forecast last October). This reflects the assumption that the surprising upsurge of GDP growth in the final quarter of 2007 will be partly offset in the first half of this year.

For the industrial countries as a group, real GDP growth this year is now forecast to be 1.5 percent, and growth for 2009 is projected to be moderately stronger at about 1.9 percent.

In emerging-market economies, circumstances vary and so do appropriate policies, but the general prospect is for continued quite strong economic growth, despite the slowdown in the industrial countries.

Is this "decoupling?" Not really. Mexico, Caribbean and Central American countries, and Asian economies that are particularly dependent on exports to the United States are already feeling and will continue to feel the effects of the US economic slowdown. More broadly, however, strong growth of domestic demand in many emerging-market economies will sustain reasonably strong GDP growth, and rising demand for raw materials by key emerging-market economies, most importantly China, will help keep commodity prices strong and aid growth in other emerging-market economies.

Overall, I forecast that growth for developing and emerging-market economies as a group this year will be about 6 1/2 percent, down from almost a 7 1/2 percent advance in 2007. For 2009, I now project slightly slower growth. The slowdown will be more severe, however, if growth in the industrial countries, especially the United States, turns out to be meaningfully below the present forecast. Exports from emerging-market countries would then be hit in volume terms, and prices of commodity exports could take a serious tumble. Some developing countries, especially among the primary commodity exporters, could face serious economic challenges and potential crises.

On this occasion, Arvind Subramanian is available to share his expertise on emerging-market economies, particularly in Asia and especially India. Accordingly, I will limit my remarks on these economies to selected observations on some key emerging-market countries. Then, in view of the departure from the Institute of my colleague Martin Baily and the (at least) temporary absence of Douglas Holtz-Eakin, I will turn to discuss growth prospects in the industrial countries, especially the United States. This should provide background for Morris Goldstein's more in-depth observations on the present financial crisis and proposals for reform.

Sustained Growth in Emerging Markets

China's economy continues to surge forward, so much so that the authorities are tightening policies to cool down inflation. Growth will likely slow from 11 1/2 percent last year to about 10 percent this year and next. On the policy front, the key action that should be taken—but that the Chinese authorities have so far refused—is a significant step appreciation of the renminbi against the dollar and in real effective terms, combined with policies to stimulate domestic demand.

In the rest of emerging Asia, growth will likely moderate somewhat in 2008 and 2009 but stay above 6 percent, with India continuing to grow at nearly 8 percent.

In Latin America, Mexico will suffer spillover effects from the slowing US economy, and growth this year is likely to fall to about 2 1/2 percent before recovering modestly in 2009. In contrast, Brazil should be able to sustain growth of nearly 5 percent, despite the strong appreciation of the real against the dollar. Growth in Argentina and Venezuela is expected to slow from the high rates of recent years, bringing down the growth rate for all of Latin America to about 4 1/2 percent this year and slightly less in 2009.

For Central and Eastern Europe, weak growth in Hungary and Turkey hurt regional performance in 2007 and partly offset strong results in Bulgaria, the Czech Republic, Poland, and Slovakia. For 2008 and 2009, regional growth will likely run about 4 percent, reflecting partly the impact of slower growth in Western Europe.

In the Commonwealth of Independent States, the dominant Russian economy should continue to grow at about 7 percent, and growth rates will likely remain somewhat higher (on average) in the smaller economies.

For the Middle East, high oil prices will help keep growth strong in the energy-exporting countries. The larger and more diversified economies of Egypt and Israel should also maintain growth rates in the 5 percent range.

High commodity prices will continue to benefit many African countries, and growth in the region appears likely to continue at least at a 5 percent rate.

Slowing in Other Industrial Countries

Among the industrial countries other than the United States, growth will slow significantly from the 2 3/4 percent advance of 2007 to barely more than 1 1/2 percent this year. However, aside from the United States, I see significant risk of recession this year only in Japan and possibly Italy. The impact of the yen's recent appreciation and weakening of exports to the United States, together with deteriorating sentiment among Japanese businesses and consumers, could push GDP into a couple of quarters of negative growth, even if year-over-year growth remains slightly positive. And the Japanese policy authorities have little room to provide offsetting stimulus.

In Canada, growth this year will likely fall a little below 2 percent, under the impact of slowing US growth and a strong Canadian dollar. However, solid income growth from strong export revenues should keep domestic demand relatively robust, and the Canadian authorities have considerable room to ease policy should that appear needed to forestall very weak growth or recession.

In the United Kingdom, growth this year is also likely to slow to slightly less than 2 percent. But this is not entirely unwelcome in view of the need to curb inflationary pressures, and the Bank of England has plenty of room to ease further should that appear warranted. The Reserve Bank of Australia has continued to tighten in recent months and would surely welcome the forecasted slowing of growth to 3 percent this year.

In the euro area, as previously noted, the projected slowing of growth this year to 1.6 percent from 2.6 percent last year involves nothing more than slowing to the potential growth rate. The slowdown will affect all countries in the area. The Italian economy looks likely to be extremely sluggish and is at some risk of falling into recession. Growth should remain stronger in Germany, sustained by good export performance in the face of weaker consumer demand. France will lag slightly behind Germany, while Spain will slow considerably due to a sharp downturn in home building. The slowdown will probably be reflected in a small uptick in unemployment and will be unpopular with most politicians. However, with inflation running well above the ECB's tolerance rate of 2 percent, the central bank is likely to see the slowing of growth more as a solution than as a problem.

A Mild US Recession

Despite signs of increasing financial strains, the US economy achieved almost 5 percent annualized growth in the third quarter of last year. Economic data that became available through Christmas indicated that the economy was still expanding through November. The data since late December, however, suggest that economic activity has been no better than flat and probably modestly declining since very late last year. The economic data do not indicate an economy that is crashing into steep recession.

The three most recent monthly employment reports have shown small declines in private-sector jobs. Weekly initial unemployment claims have risen from around 300,000 to slightly over 350,000. Residential investment continues to decline. The boom in nonresidential construction appears to have peaked. Data on durable goods orders and shipments suggest weak or even declining business equipment investment. As should be expected in the face of falling home prices and household wealth, sharp increases in energy and food prices, and stagnating employment, real consumer spending has not increased since November—but it has not declined.

Net exports are probably continuing to improve, but this will not be enough to offset weakness in the other components of final demand. Annualized real GDP growth in the first quarter will likely be modestly negative—probably between minus one-half and minus one percent in the first quarter. (And, if there is a modestly positive result, it will probably reflect an upsurge in inventory investment, which is not a positive sign for future growth.)

The second quarter may see moderation in the pace of decline of residential investment, but the other elements of domestic demand are likely to remain weak. Another quarter of modestly negative real GDP growth now seems to be the most likely outcome. Whether this will be enough to persuade the National Bureau of Economic Research (NBER) to proclaim an official recession is not clear, but I would now put the likelihood of such a recession at over 50 percent.

By June, the tax cuts from the recently passed fiscal package will be flowing into consumers pockets, bumping up consumer spending mainly in the third quarter. Some, not unreasonable, forecasts suggest that the stimulus could induce as much as a 5 percent annualized gain of real consumer spending in the third quarter, implying a considerable temporary boost to GDP growth. My view is more restrained, partly because I expect that businesses will absorb some of any surge in consumption spending (particularly for durables) into reductions in inventories.

On the other hand, businesses have kept inventories quite lean for the past three years, and there is no indication of a general inventory overhang (aside from the stockpile of unsold homes, which is not counted in business inventories). Sharp declines of inventory investment into negative territory have been a feature of all ten postwar recessions. It is a positive sign that the magnitude of any inventory correction in the present episode appears likely to be limited.

In sum, the prospect is that with the benefit of the fiscal stimulus, the US economy will bounce back to moderately positive growth this summer. By then the massive contraction of residential investment, which began two years ago, should be complete—with new home building running just below one million units, less than half of its recent peak level. Growth of consumer spending is likely to be weak after the effects of the stimulus are spent, but inventory investment should bounce back, and net exports may be expected to continue to make positive contributions to GDP growth. During the second half of 2008, it is reasonable to expect growth to rebound to 2 to 3 percent.

The suggested pattern of modestly falling GDP in the first half and moderate rebound in the second half implies that real GDP will show a very meager advance of about one-half percent on a fourth-quarter-to-fourth-quarter basis. Year-over-year real GDP growth would be barely more than 1 percent. In comparison, in the 2001 recession—the mildest of the postwar era—fourth-quarter-to-fourth-quarter growth was 0.4 percent and year-over-year growth was 0.8 percent.

The 2001 recession was followed by an initially weak recovery, with real GDP growing at only a 1.7 percent rate during the six quarters after the official end of recession, and with the unemployment rate continuing to rise to a peak of 6.3 percent in May 2003. On this occasion, I expect that the economy will remain quite sluggish through 2009, with growth proceeding at about a 2 percent annual rate. Weak growth of consumer spending in the face of significant losses of household net worth associated with lower real home values will be the key reason for this sluggishness.

Partly offsetting weak consumer spending growth will be continued improvement in US net exports, reflecting both slow import growth and continued rapid export growth. With the usual lag, the substantial depreciation of the dollar over the past year will contribute to the improvement in US net exports in 2009 and beyond.

We see here what I earlier called "reverse coupling." From 1995 through 2004, relatively strong growth of domestic demand in the United States and the effects of a strong dollar (with lags extending this effect) led to persistent deterioration in US real net exports. Thus, the United States was exporting demand to the rest of the world at a time when domestic demand growth in the rest of the world was relatively sluggish.

This process has been operating in reverse since the summer of 2006. Slower domestic demand growth in the United States, combined with stronger demand growth abroad and the effects of a significantly weaker dollar, have begun to significantly improve US real net exports. Thus, during the past year and a half, the rest of the world economy has been helping to pull the US economy along. This process may continue for several years as consumer spending growth in the United States remains restrained by the effects of lower household wealth, making room for expanding the supply of US net exports without contributing to inflationary pressures in the United States. For this process to continue relatively smoothly, however, the rest of the world needs to sustain reasonably robust demand growth and the United States needs to avoid too sharp a decline in domestic demand. The adjustment of the foreign exchange value of the dollar, which is essential for this process, is now largely complete, except for the needed appreciations of some Asian currencies, most notably the Chinese renminbi.

Turmoil in Global Financial Markets

A key feature and source of uncertainty in the present economic situation is the continuing turmoil in financial markets, especially in the United States but with spillovers to Europe and to a limited extent (so far) to Japan and emerging markets. Global equity markets have sold off amidst the turmoil, but markets for credit instruments and financial institutions dealing in such instruments have been most affected.

Three issues concerning this financial-market turmoil deserve special attention:

(1) What has caused this financial turmoil, notwithstanding strenuous efforts by the Federal Reserve and other central banks to contain it?

(2) What risks does it pose to the global economy?

(3) Have the policy responses been adequate and appropriate?

Regarding the causes of the turmoil, it is noteworthy that it has been most severe in US financial markets and institutions. Europe and, to a lesser extent, Canada and Japan have also been affected. In these other countries, a few institutions (such as the mortgage lender Northern Rock in the United Kingdom) have gotten into trouble on their own, related to their domestic activities. But most of the problems faced by non-US institutions have arisen because of their involvement with financial instruments originating in the United States.

In the United States, the initial underlying difficulties arose from subprime mortgages and financial instruments involving such mortgages. However, the crisis is much broader and deeper and has gone on longer than can plausibly be explained by this underlying cause. Across quite a broad spectrum, credit markets have become illiquid and dysfunctional. Interest rate spreads relative to US Treasury obligations have shot up and remained high and volatile even for higher-quality credits. Markets for important classes of bundled instruments have frozen up, and values for some of these instruments—to the extent that they can be determined—have plummeted. All this turmoil, well beyond what can plausibly be explained by developments in the real economy, indicates that financial markets and institutions themselves are mainly responsible for the crisis.

The extent of this crisis in credit markets is even more remarkable in view of the exceedingly aggressive actions taken by the Federal Reserve and the important but less aggressive actions of other leading central banks. Contrary to the nonsense spoken by many financial-market commentators, the Federal Reserve has not been "behind the curve" in its policy response. In fact, the easing of US monetary policy in the present possible recession has far outstripped the pace of easing in past actual recessions. On top of this, the Federal Reserve has recently taken truly extraordinary actions to extend specific liquidity support to a wide range of US financial institutions.

The official explanation for these extraordinary actions is not that they are motivated primarily by the desire to protect financial institutions from losses but rather to head off the risk of major damage to the general economy spreading from difficulties in the financial sector. So far, however, there is little indication that the general economy is suffering much damage from the credit market turmoil—beyond some deepening of the downturn in US residential investment. In particular, the present slowdown in the US economy and around the world is not much more than what we would normally have expected in view of falling home values, higher food and energy prices, and other developments aside from the turmoil in credit markets.

Does this imply that the Federal Reserve, in its efforts to protect the financial sector, has overreacted to the credit market turmoil? Has it eased too aggressively, unduly raising the risk of inflation down the road? Has its rescue of the financial sector by cutting massively the cost of funds and the provision of specific liquidity support generated far too much moral hazard relative to the value of the protective effect of these actions against real hazards faced by the general economy?

At this point, the answers to these questions are not entirely clear, but two conclusions can be reached with high confidence. First, given the massive easing already undertaken by the Federal Reserve and the likelihood of some modest further easing, the US economy now needs to undergo at least a near recession if the Federal Reserve's easing is not to be excessive. Second, if the Federal Reserve's highly aggressive actions have really been warranted to protect the economy from substantial harm, then deep reforms of the financial system, including the Federal Reserve's policies and practices, are clearly needed to reduce the likelihood of such problems in the future. The Federal Reserve cannot pose only as the hero riding to the rescue of the economy and the financial system. Its role as one of the villains whose earlier actions and inactions contributed to the present crisis needs to be fully and carefully assessed.


Table 1 Real GDP growth projections as of April 3, 2008 (percent change, year over year)




Note

1. The figures for global GDP growth are aggregated from the growth rates for individual countries using purchasing power parity (PPP)–based measures of exchange rates employed by the International Monetary Fund (IMF) in its World Economic Outlook (WEO). Based on a major study supported by the World Bank, estimates of PPP exchange rates have recently been substantially revised, with the general result that the weights in world GDP of the industrial countries have been somewhat increased while those of emerging-market economies have been correspondingly reduced. Because emerging-market economies, most notably China and India, have been growing far more rapidly than most industrial countries in recent years, the effect of the revision in PPP exchange rates is to lower the figure for global growth (without changing growth rates for individual countries) by about 1/2 percentage point. Thus the present estimate for global growth of 4 3/4 percent in 2007 under the new PPP-based exchange rates corresponds to an estimate of 5 1/4 percent growth under the old weights. The weights used in table 1 are estimates of the weights that the IMF will use for the forecast to be reported in the current WEO.
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RESPONSE FROM MELBOURNIAN AND COUNTER-RESPONSE FROM NIK ZAFRI - IN GLOBAL MALAYSIAN FORUM

Melbournian : A very lengthy analysis that echos familiar cliche from "soft-landers". My only comment is that there are two important factors that seems to be absent from his presentation: ie the component of human emotion and the lack of accountability in the derivative instruments that are prevalent in recent years. The health of credit market depends un-surprisingly on market "credibility". Quite akin to the railroad stock bubble and the (in)famous tulip futures fiascos in the past , the total sum of global derivatives todays seems to have exceeded the true intrinsic values of the actual goods and services that these instruments are supposed to underpin. Laws of conservation and Newton's principle of inertia are no longer relevant. No longer can one confidently say for sure that one man's gains equal in exactitude to another's losses. Containment ? Lets hope and pray.

Nik Zafri :

Hi Melbournian, I must say that I'm impressed!

This research seem to miss out "CCI" (Consumer Confidence Index) which I think suitably describes what you meant by 'human emotion' in the context of economics. (it's obvious isn't it....the article is touching on 'purchasing power', 'manpower', business surroundings - which are all linked to the CCI)

Surprisingly I have also discovered that the Global CCI have always been missing (in fact seldom being measured) But; in US; it will suddenly 'appear' during proposal to hike interest rates by the Feds - hence one of the main indicators to the performance of the stock market worldwide.

I can understand why the CCI is sometimes there and sometimes not there...it's because of the big variance between one country to another. CCI is suppose to be the consumption indicator for GDP.

Lack of accountability on derivative instruments

What you have said - coincidentally reminding me of the core of Management - it is said that :

"Responsibility is a derivative of authority and accountability is a derivative of responsibility"

It's a paradox - I do not know if there is any connection.

Anyway, in this case, the derivative instrument (to the accounting standards esp. balance sheet) becomes a concern when it involve hedging and embedded derivatives (contract) - to determine of whether they (derivatives) are liabilities or asset. Otherwise positioning of finance and determining the derivatives value cannot be accurately achieved.

I'm not a qualified accountant but I do know the affects of hedging either the normal fair value, cashflow or currency. Now? As you said and I would to agree to it that most accounting (and auditing) bodies (even in Malaysia) are 'shouting' demanding accountability but again, it is easier said than done unless further education to include hedging activities and the volatility behind them in the context of derivatives are developed further.

Yes, breaking every rule in the book is now trendy!! It is also the reason why I am really interested in the concept of Knowledge-Based Economy and Knowledge Management but of course these two terms are moulded according to my style of intepretation - in short my experience. At times, I never trust figures, data and statistics but I use my instincts to make decisions.

Finally quoting you : "Let's Pray and Hope"

The Star Global Malaysians Forum - Posted: 10 July 2005 at 6:07pm

(In response to another e-mail)

Dear friend

I do hope that the next time, you will try to post your question 'in the open'. You can use pseudonym if you want to. I adopt a 'transparent' concept in networking so that all forum members may benefit from it - it's a learning and teaching environment.

Here's the information that you've asked and lucky you - it's in BM as you wanted. Judging by the your 'questioning techniques', I'm pretty sure that you are from Civil and Building/Structural Engineering Works.

Please be reminded that this model may subject to (generic) minor/major changes if you are involved in highway construction (civil)

There's a lot more where that came from.

I do not have the full answer to your question on 'aggregate and concerete' but I do have something that may help you out. (the following is ONLY a preliminary research (literature review) and not the thesis itself)

Besides British Standards 812, you should also cross reference to BS 882 as well. Please contact BSI or SIRIM Library (I am unsure if they have an equivalent MS Standard..perhaps you can enquire - but I do also know that some BS standards are also available over there)

On your other query of how or where to start, try to make your own assumption first by creating your own target on the interelationship between the following values with the concrete strength and the targetted ages typically 7, 14 & 28 days:

* Aggregate Impact/Crush Values (please specify grade), x% fine values, water absorption Value, LA Abrasion Value, Polished Stone Value

The usual testings are Crush Cube and Flexural tests with respective dimensions of x X y X z mm (e.g. 150 X 150 X 150mm).

Sungai Long Industries (Bina Puri Group - Tan Sri Tee Hock Seng) was one of the quarry (in Hulu Langat) used to be under my direct ISO 9001:2000 consulting supervision. (now certified) Perhaps you can also contact them and refer to my name (find a guy called Baljit - if he's still there) I'm also unsure if they would allow you to take samples from them.

On your question about engaging quality management consultant, I must advise you not to engage QM Consultant having inferior or no knowledge at all in the construction industry - otherwise you'll end up in chaos! I've seen a small number of quality consultants (with the necessary professional affiliations) have spoiled their clients (main contractors) by giving a 'xerox QMS documentation' from a manufacturing industry. A client of mine was very lucky to catch hold of me when THEIR clients are 'shouting' to get the earthworks & piling method statements but instead were being given some work instructions that has no absolute relation to the client's specification, drawing, design brief and even contractual requirements. Even the procedures are text based and NONE of them are flow-chart/process-flow based. Although I have managed to pacify the Client (who was about to terminate the contract of the main contractor), I must admit that I was 'a bit dissapointed' to see this is happening as the scenario may have somehow (to a certain degree) 'spoiled' the reputation of genuine/experienced consultants.

You appear to have the necessary qualifications and experience in Construction both QA/QC, I think with proper guide, you can do it!

Many years ago, somewhere between 1995-1997 when I was the weekly columnist for Utusan Malaysia talking about ISO 9000, TQM, OSH & EMS, there was another columnist for The Star talking about ISO 9000 in the Construction Industry. His name is Tim D. Alcock and we kinda know each other. At that time Tim was working with a consulting firm known as QMI. I will e-mail you his latest e-mail address in UK. Another 'senior' company that has been doing ISO 9000 in the construction industry - LONG before construction ISO became a trend in Malaysia (that time, it was known as BS 5750) is a company called Balfour Beatty (also involved in the country's double track project) where I was in the Engineering Department in one of their projects many years back. You may also wanted to get in touch with them as well if you're in UK.

The Star Global Malaysians Forum - Posted: 09 January 2007 at 7:33pm
Question on Performance Bond. Here's something you may like :

http://www.attny.com/gci32djd.html

Construction Surety Bonds In Plain English

This article is an abridged version of Federal Publications’ February 1996 CONSTRUCTION BRIEFINGS entitled Surety Bond Basics, copyright 1996 by Federal Publications, Incorporated, written by Messrs. Donohue and Thomas. A complimentary copy of the CONSTRUCTION BRIEFINGS may be obtained by contacting our firm. Subscriptions to CONSTRUCTION BRIEFINGS are available from Federal Publications, Incorporated, 1120 20th Street, N.W., Washington, D.C. 20036. You may call Federal Publications at (202) 337-7000 or (800) 922-4330.

Most construction contractors are familiar with the process of obtaining surety bonds, but they may not be aware of the legal relationships bonds establish the relationships among the principal (the contractor), the obligee (usually the owner) and the surety. Contractors’ lawyers, on the other hand, are aware of the rights and the obligations of the principal, obligee, and surety, but they may lack practical knowledge about the process of obtaining bonds. This article is directed to both contractors and their lawyers. It explains in plain English just when construction surety bonds are required on federal, state, and private projects, and the bonding requirements contained in widely used contract forms, including federal government contracts, AIA contract forms, and the AGC subcontract form.

SOME SURETY BOND BASICS

A surety bond is not an insurance policy. A surety bond is a guarantee, in which the surety guarantees that the contractor, called the “principal” in the bond, will perform the “obligation” stated in the bond. For example, the “obligation” stated in a bid bond is that the principal will honor its bid; the “obligation” in a performance bond is that the principal will complete the project; and the “obligation” in a payment bond is that the principal will properly pay subcontractors and suppliers. Bonds frequently state, as a “condition,” that if the principal fully performs the stated obligation, then the bond is void; otherwise the bond remains in full force and effect.

If the principal fails to perform the obligation stated in the bond, both the principal and the surety are liable on the bond, and their liability is “joint and several.” That is, either the principal or surety or both may be sued on the bond, and the entire liability may be collected from either the principal or the surety. The amount in which a bond is issued is the “penal sum,” or the “penalty amount,” of the bond. Except in a very limited set of circumstances, the penal sum or penalty amount is the upward limit of liability on the bond.

The person or firm to whom the principal and surety owe their obligation is called the “obligee.” On bid bonds, performance bonds, and payment bonds, the obligee is usually the owner. Where a subcontractor furnishes a bond, however, the obligee may be the owner or the general contractor or both. The people or firms who are entitled to sue on a bond, sometimes called “beneficiaries” of the bond, are usually defined in the language of the bond or in those state and federal statutes that require bonds on public projects.

TYPES OF SURETY BONDS

BID BONDS

A bid bond guarantees the owner that the principal will honor its bid and will sign all contract documents if awarded the contract. The owner is the obligee and may sue the principal and the surety to enforce the bond. If the principal refuses to honor its bid, the principal and surety are liable on the bond for any additional costs the owner incurs in reletting the contract. This usually is the difference in dollar amount between the low bid and the second low bid. The penal sum of a bid bond often is ten to twenty percent of the bid amount.

PERFORMANCE BONDS

A performance bond guarantees the owner that the principal will complete the contract according to its terms including price and time. The owner is the obligee of a performance bond, and may sue the principal and the surety on the bond. If the principal defaults, or is terminated for default by the owner, the owner may call upon the surety to complete the contract. Many performance bonds give the surety three choices: completing the contract itself through a completion contractor (taking up the contract); selecting a new contractor to contract directly with the owner; or allowing the owner to complete the work with the surety paying the costs. The penal sum of the performance bond usually is the amount of the prime construction contract, and often is increased when change orders are issued. The penal sum in the bond usually is the upward limit of liability on a performance bond. However, if the surety chooses to complete the work itself through a completing contractor to take up the contract then the penal sum in the bond may not be the limit of its liability. The surety may take the same risk as a contractor in performing the contract.

PAYMENT BONDS

A payment bond guarantees the owner that subcontractors and suppliers will be paid the monies that they are due from the principal. The owner is the obligee; the “beneficiaries” of the bond are the subcontractors and suppliers. Both the obligee and the beneficiaries may sue on the bond. An owner benefits indirectly from a payment bond in that the subcontractors and suppliers are assured of payment and will continue performance. On a private project, the owner may also benefit by providing subcontractors and suppliers a substitute to mechanics’ liens. If the principal fails to pay the subcontractors or suppliers, they may collect from the principal or surety under the payment bond, up to the penal sum of the bond. Payments under the bond will deplete the penal sum. The penal sum in a payment bond is often less than the total amount of the prime contract, and is intended to cover anticipated subcontractor and supplier costs.

JW Surety Bonds offers performance bonds for small to large contractors throughout the country. Get a free quote using our online applications.

Bryant Surety Bonds provides free quotes for performance bonds based on personal credit for small contractors and competitive for medium to large contractors.

SURETY BOND REQUIREMENTS ON FEDERAL PROJECTS MILLER ACT AND FAR REQUIREMENTS

The Miller Act, 40 U.S.C. §§ 270a-270f, provides that all federal construction contracts performed in the United States must require the contractor to furnish a performance bond in an amount satisfactory to the contracting officer; a payment bond in a penal sum of up to $2.5 million, and other surety bonds as well. In the Federal Acquisition Streamlining Act of 1994, Congress made the Miller Act inapplicable to contracts under $100,000, and directed agencies to develop alternatives to surety bonds for contracts between $25,000 and $100,000. These statutory requirements are implemented in FAR part 28, bonds and insurance. You can get a good introduction to the language and purposes of surety bonds simply by reading FAR part 28.

BID BONDS

A bid guarantee is required on federal projects whenever a performance bond and/or a payment bond is mandated. Bid guarantees usually are in the form of bid bonds, but on federal projects they may also be submitted as a postal money order, certified check, cashier’s check or an irrevocable letter of credit. A bid guarantee must be in an amount equal to at least twenty percent of the bid price; the maximum amount is $3 million. The standard solicitation provision requiring bid guarantees says that if the contractor awarded the contract fails or refuses to execute all contractually required documents, the agency may terminate the contract for default. In such a case, the agency will make a demand on the bid bond or bid guarantee to offset the difference in price between that bid and the next lowest bid. Bid bonds and bid guarantees are returned to unsuccessful bidders after bids are opened; bid guarantees are returned to the successful bidder after all contractually required documents and bonds are executed.

PERFORMANCE BONDS

As amended by the FASA, the Miller Act requires payment bonds and performance bonds for all federal contracts over $100,000. The penal amount of the performance bond is generally one hundred percent of the contract amount, and the penal sum is generally increased for each change order. The surety is entitled to receive information from the contracting officer concerning the progress of the work, payments, and estimated percentages of completion whenever it so requests in writing. The form of the Miller Act performance bond is set out at FAR 53.301-25.

PAYMENT BONDS

Payment bonds are now required for all federal construction contracts over $100,000. The penal amount of the payment bond is required to be a maximum of $2.5 million where the contract price is more than $5 million; for contracts less than $5 million, the penal sum of the payment bond is to be forty to fifty percent of the contract price. Each solicitation must state that a payment bond and performance bond are required, the penal amount required for the bonds, and the deadline by which bonds must be submitted after contract award. The form for a Miller Act payment bond is at FAR 53.301-25-A. The bond form does not set out any time limitations for claims against the bond. However, the Miller Act provides that suits against a payment bond must be brought within one year after the date on which the last of the labor was performed or material was supplied. In addition, the Miller Act requires that second-tier subcontractors and others who do not have a direct contract with the prime contractor submit a written notice of their claim to the prime contractor with ninety days of the last date of their work on the project.

REQUIREMENTS FOR QUALIFIED SURETIES

Federal surety bond requirements may be met in three ways: surety bonds issued by an approved corporate surety; surety bonds issued by an individual surety who pledges certain defined types of assets; or by the contractor pledging assets directly. The third option is uncommon.

REQUIREMENTS FOR INDIVIDUAL SURETIES

Individuals may act as sureties to satisfy bonding requirements on federal projects if they have certain acceptable assets in the required amounts to support the bonds. Although federal agencies probably would prefer to deal only with approved corporate sureties, allowance for individual sureties may enhance competition by allowing awards to contractors that might not otherwise qualify to obtain bonds from an approved corporate surety.

To support bonds issued by individual sureties, agencies may only accept cash, readily marketable assets, or irrevocable letters of credit from a federally insured financial institution. Acceptable assets include cash, certificates of deposit or other cash equivalents; U.S. agency securities (valued at current market value); stocks and bonds traded on the New York, American and certain other exchanges, valued at ninety percent of their current 52-week low price; real property owned outright in fee simple, valued at one hundred percent of its current tax assessment value; and irrevocable letters of credit issued by federally insured financial institutions. Examples of unacceptable assets are also listed in the regulations. Unacceptable assets are those that may be difficult to liquidate (e.g., a life estate in real property); are of uncertain or greatly fluctuating value (e.g., jewelry); property commonly exempt from attachment under state laws (e.g., the individual surety’s home); or commonly pledged to others (e.g., plant and equipment). An individual surety is required to submit an affidavit, in which the surety identifies the assets, the market value of the assets, and all encumbrances on the assets. The affidavit must also identify all other bonds issued by the individual surety within the last three years.

TREASURY LIST OF APPROVED CORPORATE SURETIES

By far the most common means of satisfying federal bonding requirements is by a bond issued by a corporate surety. The Department of the Treasury maintains a list of corporate sureties approved to issue bonds for federal projects, Treasury Department Circular 570. Copies may be obtained from the agency. The circular also is posted in the Treasury’s computerized bulletin board at (202) 874-6817, and on Treasury’s Web site at http://www.ustreas.gov/. Whenever a new corporate surety is added to the approved list, a notice is published in the Federal Register. Contracting officers are prohibited from accepting surety bonds issued by corporate sureties not listed in Treasury Circular 570. The circular lists the name and address of each approved surety and all states where each surety is licensed.

When approving corporate sureties, Treasury makes a determination as to the financial strength of the surety, and sets an underwriting limit, commonly called a bonding limit. The bonding limit is also stated in Circular 570. When an approved surety offers a bond on a federal project, the contracting officer checks to make sure that the surety has not exceeded the surety’s bonding limit. Because of these underwriting limits, surety bonds on very large construction projects, valued in the hundreds of millions of dollars, frequently are issued by several different approved surety companies, acting as co-sureties. The name of each co-surety will appear on the bond, along with its individual limit of liability.

Another way surety companies can stay within their approved surety underwriting limit, and spread their risk, is to obtain coinsurance or reinsurance, in which they essentially obtain a contract from another surety company to cover part of their risk on the bond they have issued. When a surety obtains reinsurance for part of its risk under a Miller Act bond, it must submit to the contracting officer a reinsurance agreement for a Miller Act performance bond and a reinsurance agreement for a Miller Act payment bond. The terms of both reinsurance agreements are stipulated in the regulations.

SURETY BOND REQUIREMENTS ON STATE PROJECTS-“LITTLE MILLER ACTS”

Statutes in all fifty states and the District of Columbia require performance and payment bonds for state government construction contracts. These state statutes often are called “Little Miller Acts” because many of them are modeled after the federal Miller Act. Useful information is available from the National Association of Surety Bond Producers. A good discussion of these Little Miller Acts is in Federal Publication’s CONSTRUCTION BRIEFING, Little Miller Acts. A fairly recent summary listing of these state statutes, along with citations, is in Bednar, et al., CONSTRUCTION CONTRACTING, George Washington University (1991), at 1309a-1309r. We will not duplicate these discussions. Each state licenses sureties to issue bonds. The Little Miller Acts each require bonds by licensed sureties. You can identify sureties licensed in particular states by checking Circular 570 on the computer bulletin board and at Treasury’s World Wide Web site.

SURETY BOND REQUIREMENTS IN PRIVATE CONSTRUCTION PROJECTS

There obviously is a great variation among private construction owners and projects throughout the United States. Performance bonds and payment bonds are required by owners for most large construction projects. If the owner elects to require surety bonds, major issues for the owner to decide during project planning are:

WHAT BONDS SHOULD BE REQUIRED?

Performance bonds protect the owner from contractor default and delays, and these are important for commercial properties with fixed tenant availability dates. Payment bonds protect the property from mechanics’ liens, which might otherwise interfere with sale or refinancing of the property. Bid bonds, which generally address only the price-spread between the low and next to lowest bid price, serve a much narrower purpose. However, because of the expectations and requirements of the bid package, corporate sureties generally will issue bid bonds only to contractors who qualify for performance and payments bonds. Thus a requirement for a bid bond may help narrow the field of bidders to only those firms who can actually satisfy performance and payment bond requirements.

WHAT SURETY COMPANIES ARE ACCEPTABLE TO THE OWNER?
Since a surety bond essentially is a guarantee by the surety, the owner has an interest in deciding which sureties are acceptable. One means of identifying responsible sureties is to refer to the list of sureties approved in Circular 570.

WHO PAYS THE BOND PREMIUM?

Of course, the owner eventually pays all costs anticipated in the contractor’s bid, whether the project is fixed-price or is a cost-plus-fee arrangement. A private owner may want to provide separate reimbursement for the contractor’s bond premium cost when the bond is delivered to the owner. This procedure ensures that bonds actually are furnished.

SPECIFYING THE AMOUNT OF BONDS.

Premiums rise along with the penal sum of the bond, and the owner ultimately pays these costs in the contract price. Nonetheless, the owner has an interest in setting the bond penal sum high enough to provide the desired protection to the project. A fairly good guideline for setting penal sums is the FAR requirement discussed hereinabove. The penal sum for the performance bond should be one hundred percent of the original contract price, and the penal sum should be increased for each change order. The payment bond should be fifty percent of the contract price up to some fairly large maximum penal sum.

SURETY BOND PROVISIONS OF STANDARD FORM CONTRACTS

Popular form contracts for private construction projects, those published by the American Institute of Architects (AIA) and the Associated General Contractors of America (AGC), leave bonding requirements to the choice of the parties. Thus these forms do not provide much guidance in deciding the issues we have identified. The current AIA General Conditions merely provide that the owner may require bonds elsewhere in the contract documents and that the contractor must furnish copies of the bonds upon request to any bond beneficiary (e.g., subcontractors or suppliers). AIA Document A-201 also provides that compensation for construction change directives ordered by the owner shall include bond premiums for the extra work. AIA’s current owner-contractor agreement, AIA Document A-101, does not address surety bonds at all. AIA’s contractor-subcontractor agreement, AIA Document A-401, addresses bonding requirements in article 7 by leaving a blank area for the parties to add any bonding requirements.

The current AGC Standard Form for Construction Subcontract, also endorsed by the American Subcontractors Association and the Associated Specialty Contractors, addresses surety bonds in article 5. Paragraph 5.1 provides that copies of the contractor’s payment and performance bonds must be furnished to a subcontractor on request. Paragraph 5.2, “Subcontractor Bonds,” provides that if bonds are required from the subcontractor, the subcontractor shall be reimbursed for surety bond premiums in the first progress payment. Performance and payment bonds must be in the full amount of the subcontract price, unless otherwise stated.

PROVISIONS OF STANDARD AIA BOND FORMS

Private construction contracts rarely require particular bond language. Rather, they usually require bonds in a specified amount with a surety acceptable to the owner, general contractor or other obligee. The AIA’s bond forms, AIA Documents A-311 and A-312, are popular and instructive; thus their provisions merit a brief discussion.

AIA’s performance bond form, AIA Document 311, provides that the surety waives notice of change orders and extensions of time. It says that the owner is the only person who can sue to enforce the performance bond, and that any such suit must be brought within two years from the date final payment is due under the contract. It also provides, if the owner declares the contractor in default, that the surety shall either complete the contract or, if the owner elects, shall obtain bids so that the owner may contract directly with a completion contractor with the surety providing funds sufficient for completion.

AIA’s labor and material payment bond form, AIA Document A-311, is very similar to the Miller Act payment bond required for federal projects. It defines a “claimant” as a person or firm that has a direct contract with either the principal or a subcontractor to the principal. Thus in the typical case where the principal is the general contractor, claimants under AIA payment bonds are limited to subcontractors and suppliers who furnish labor and materials directly to the general contractor or directly to a subcontractor. Claimants are entitled to sue on the bond if they have not been paid within ninety days after the last day of their work on the contract. Claimants that do not have a direct contract with the principal (e.g., second-tier subcontractors) must give a written notice to the owner and the surety within ninety days of the last day of their work advising that the claimant has not been paid. Suits on the payment bond must be brought within one year of the principal’s last day of work on the project. (This is different from bonds under the Miller Act, which requires that suits be filed within one year of the claimant’s last day of work on the project.) Suits must be filed in a state or federal court for the county in which the project was located.

AIA’s combination performance bond and payment bond, AIA Document A-312, is similar to the separate bonds described above, but this one adds some additional provisions. The performance bond contains requirements that the owner give the surety written notice before declaring the contractor in default, and provides for a meeting of the parties within fifteen days of that notice to discuss performance. The performance bond also gives the surety the option of having its principal complete the project, notwithstanding the default, if the owner consents. This probably would be done with financing or other assistance contributed by the surety. The payment bond in AIA Document A-312 requires that claimants that do not have a direct contract with the principal take action in set time frames. Such a claimant must give written notice to the principal that it has not been paid; wait thirty days for the principal’s response, and then notify the surety in writing that it intends to make a claim on the bond. It also requires the surety, within forty-five days of such notice, to pay all undisputed amounts and to respond regarding any disputed amounts.

CONCLUSION

If the terminology of construction surety bonds is confusing at first, you may want to keep this guide as a reference. Surety bonds are required for most large construction projects in the United States and now more frequently they are required in other countries. Our next article will review the process of obtaining surety bonds, the choices contractors have among surety companies, and the agreements typically entered into between contractors and sureties when construction surety bonds are issued.

Questions on a performance bond? Get it answered for free on the Surety Bond Forums.
— Dan Donohue and George Thomas, Assistant Vice-President, Contract Surety Claims, Fireman’s Fund Insurance Company Copyright © 1996 Kilcullen, Wilson & Kilcullen. All rights reserved.

PENGENALAN ASAS KEPADA BIOTEKNOLOGI, TEKNOLOGI NANO DAN KEPINTARAN BUATAN - Kajian Ringkas Nik Zafri Abdul Majid 2005

BIOTEKNOLOGI

Definisi dan cakupan bioteknologi amatlah luas sekali. Mungkin jika kita mendengar istilahnya yang bunyinya begitu saintifik, ramai antara kita yang tidak menceburi bidang ini merasakannya ianya tidak begitu mustahak padahal hidupan manusia sendiri berkaitan rapat dengan bioteknologi.

Bioteknologi berkait dengan semua hidupan organik samada hidupan seni untuk kegunaan proses fermentasi hinggalah kepada kejuruteraan evolusi genetik. Proses bioteknologi melibatkan kedua-dua proses semulajadi dalam kehidupan dan juga proses kajian menerusi makmal.

Di segi tradisinya, kajian dilakukan dengan membuat pilihan ke atas haiwan atau pun tumbuhan. Cara proses kajian berkait genetik umpamanya pembiakan dilakukan membabitkan keadaan yang terkawal seperti suhu, bahan-bahan yang digunakan, kebersihan persekitaran, makanan dan sebagainya kerana semua ini mempengaruhi keputusan atau hasil kajian samada kejayaan berjaya dicapai atau pun tidak.

Kejayaan bioteknologi telah banyak melahirkan kaedah/teknik pertanian dan pembiakan haiwan yang maju umpamanya kacukan baka, pengklonan, hidroponik, aeroponik dan banyak lagi. Dikatakan walaupun teknologi ini baru kedengaran pada kita hari ini, teknologi ini sebenarnya telah lama digunakan sebelum dipopularkan kembali oleh saintis-saintis hari ini. Umpamanya perlakuan multigene untuk penghasilan intrinsik dan ketahanan hidup melibatkan pembiakan selektif yang beroperasi ke atas semua organisma set yang lengkap dengan gen yang selaras manakala kejuruteraan genetik pula terhad kepada pemindahan 3-4 gen dengan kawalan yang kecil di mana gen yang baru dimasukkan. Bagi perlakuan agronomi, cara pembiakan tradisi masih mendapat sambutan. Lain-lain bioteknologi bukan genetik melibatkan kegunaan organisma mikro untuk memudahkan proses penapaian bagi menghasilkan keju, enzim untuk sabun dan sebagainya. Dari sini juga lahirnya idea untuk menggunakan radiasi dan kimia dan terhasillah mutagenesis yang menghasilkan pertukaran genetik dalam bakteria samada dari perlakuannya mahupun jumlahnya yang amat berguna untuk menjadikan sesuatu produk lebih baik dan bermutu tinggi.

Saintis hari ini kini sedang mencuba untuk mengelakkan pindaan terhadap gen dan menggunakan kaedah bioteknologi moden umpamanya antibodi monoklon bagi ikatan protin yang digunakan untuk aplikasi diagnostik seperti ujian mengandung dan sebagainya. Mungkin ramai yang berpendapat bahawa pindaan terhadap gen adalah meminda sesuatu semulajadi atau cubaan menentang Pencipta sementara masih ada alternatif untuk meminimakan pindaan yang drastik terhadap gen.

Teknologi pengklonan mamalia juga telah mendapat banyak tentangan. Proses ini melibatkan penanaman nukleus dari sel dewasa ke dalam telur yang telah dibuang nukleusnya untuk memudahkan telur berkenaan berkembang dengan cara yang berganti-ganti. Pengklonan sebenarnya tidak melibatkan pindaan gen atau perlakuannya tetapi hanya sekadar pemindahan nukleus yang mengandungi maklumat lengkap genetik.

Walaubagaimanapun, apa yang dapat dipelajari dari pemindahan nukleus ialah teknologi yang berkaitan dengan prospek manipulasi tiruan dan pemindahan genetik satu hidupan ke satu hidupan yang lain secara harmoni. Umpamanya asid amino yang membentuk protin berkaitan rapat dengan kejadian manusia. Telah kedapatan di pasaran produk-produk ubat-ubatan yang sangat mahal tetapi mengandungi kandungan asid amino yang dikatakan mampu menguatkan protin dalam tubuh. Kemungkinan kejuruteraan genetik akan dapat membantu bidang perubatan moden amatlah tinggi sekali umpamanya penggantian gen yang rosak dengan gen yang baik kondisinya. Buat masa ini, kejuruteraan genetik yang melibatkan manusia hanya dilakukan menggunakan sel yang tidak reproduktif atau somatik yang diambil dari tulang.

Bioteknologi dan Makanan

Walaupun dunia dipenuhi dengan makanan namun terdapat kira-kira 700 juta yang masih kekurangan makanan bernutrien dan angka ini terus meningkat dari hari ke hari selaras dengan pertambahan populasi dunia.

Krisis makanan sedunia biasanya disebabkan oleh faktor-faktor force-majeur seperti:

- peperangan
- Dasar ekonomi dan kewangan sesebuah negara yang mungkin tidak mampu diterima oleh negara pengekspot makanan umpamanya cukai impot, taraf perintis, pasaran modal, kuota dsb., - ini juga pengaruh kepada naik turunnya harga makanan dan kemungkinan jika peningkatan pendapatan individu yang tidak selaras akan menyebabkan kurangnya kuasa belian terhadap makanan yang berkualiti,
- bencana alam
- kekurangan kawasan (tanah) kerana dibangunkan kembali untuk industri lain seperti perumahan - walaupun bioteknologi mampu meminimakan masalah ruang tetapi adalah lebih baik jika ruangan yang luas untuk sektor makanan dimaksimakan.

Kerajaan Malaysia telah mengambil langkah ke hadapan untuk memastikan negara tidak akan terlibat dalam krisis makanan menerusi dwi galakan kepada sektor pertanian dan bioteknologi. Kita bersyukur kerana kita tidak menghadapi masalah krisis makanan, dasar ekonomi dan kewangan masih antara yang terbaik (jika dibandingkan dengan negara-negara lain), bencana alam juga kurang dan kita masih mempunyai kawasan tanah atau ruang yang mencukupi untuk menjadikan bioteknologi sebagai pemangkin kemajuan sektor pertanian selain pengekalan cara tradisional.

TEKNOLOGI NANO DALAM INDUSTRI I.C.T.

Atom adalah pembina utama sesuatu produk di mana setiap produk mempunyai aturan atomnya yang tersendiri. Sekiranya atom dapat diatur kembali contohnya dalam butiran pasir termasuk silica dan sebagainya, ianya akan berubah menjadi chip komputer. Manakala jika atom dalam arang batu dapat diubah, ianya akan menjadi berlian.

Contoh manipulasi atom yang baik dalam sektor pembinaan ialah konkrit pratuang dan pembentukan kembali besi atau karbon. Ianya seperti membina modul menggunakan blok lego. Teknologi Nano adalah sebahagian daripada teknologi-teknologi yang kita lihat hari ini di mana ianya melibatkan manipulasi atom dan molekul dalam sesuatu bahan untuk membina bahan yang lain. Dalam sektor pembikinan barang-barang bersabit dengan ICT contohnya industri chip mikro, kita dapati teknologi nano digunakan secara meluas. Teknologi nano akan terus berkembang dan pastinya akan membawa kegunaan kepada manusia di masa hadapan.

Akhir-akhir ini, ramai yang menjadikan teknologi nano sebagai sebahagian daripada kajian mereka. Teknologi nano sering dikaitkan dengan karektoristik yang kurang daripada 1,000 nanometer. Contohnya bidang litografi yang dapat menghasilkan keluasan garisan yang kurang dari 1 mikron. Tanpa litografi, maka mungkin wujudnya komputer yang kita gunakan hari ini kerana tiadanya industri semikonduktor dan sirkit bersepadu. Kini litografi telah mencapai tahap yang begitu maju dalam industri bersabit dengan ICT.

Teknologi nano akan terus berkembang bagi menjadikan sesuatu bahan lebih mudah dan lebih murah secara keseluruhan.

APAKAH ITU KEPINTARAN BUATAN

Kepintaran buatan (AI) melibatkan sains dan kejuruteraan dalam membina mesin/peralatan yang lebih pintar - umpamanya robotik, automasi dan ICT. Dalam konteks ICT, contohnya penggunaan komputer (terutamanya pengaturcara), apabila kita memasukkan sesuatu kombinasi nombor sambil menekan kekunci ALT, kita akan dapati ianya akan menghasilkan sesuatu symbol ASCII. Ini adalah kefahaman yang paling asas dalam kepintaran buatan dalam konteks komputer - dengan kata lain kita telah mengarahkan komputer menggunakan bahasanya (gabungan kekunci) untuk memperbuat sesuatu bagi menghasilkan keputusan yang dapat kita lihat. (command-based) Ini juga berlaku dalam suasana yang berdasarkan menu-based.

Hari ini, kita dapati komputer dapat dilatih untuk mengecam suara dan dapat menaipkan apa yang kita baca. Sebenarnya komputer telah mendapat input daripada manusia dengan melatihnya menyimpan data yang kita bacakan untuknya. Ibarat kita menggunakan mesin kira, apabila kita menekan sesuatu angka menerusi operasi tolak, bahagi, campur atau kali, kita dapati mesin kira akan memberikan kita satu angka yang tepat. Begitu juga halnya dengan penggunaan mesin basuh yang menggunakan konsep fuzzy logic. Inilah antara penerangan asas untuk memahami takrif 'Kepintaran Buatan' atau 'Artificial Intelligence' di mana sebilangan besar dari kita telah menggunakannya setiap hari samada disedari atau pun tidak.

Dari sinilah, manusia yang bergelar saintis mendapat ilham untuk mengaplikasikan kepintaran buatan ke atas automasi untuk industri (tangan robotik) dan sebagainya. Ianya merupakan satu simulasi kepada situasi sebenar tetapi memerlukan input daripada manusia sendiri untuk mengaturkan simulasi berkenaan. Dalam cereka sains, kita dapati banyak unsur evolusi kepintaran buatan digunakan - contohnya terdapat robot atau android atau teknologi holograf (melibatkan medan kuasa, photon dll) yang interaktif, sebenarnya kesemuanya ini adalah teori evolusi kepada teknologi kepintaran buatan yang kita lihat hari ini. Walaupun mungkin, kita masih belum mampu untuk menghasilkan teknologi yang tinggi sebagaimana dipaparkan dalam siri-siri cereka sains, namun usaha ke arah penghasilan asas telah pun dilakukan di serata dunia termasuk Malaysia (pameran atau pertunjukan atau pertandingan bersabit dengan robotik) Teknologi kepintaran buatan dalam konteks robotik atau bionik atau automasi juga dikaitkan dengan teori heuristik, evolusi neural network',fuzzy logic dan kebangkitan zaman teknologi tanpa wayar yang sedang 'menyerang' rumah-rumah pintar (wireless router, muzik digital, radio internet, VOIP dan Voice Phone dll)

Secara keseluruhannya teknologi kepintaran buatan adalah bertujuan untuk membantu manusia melakukan kerja-kerja yang sukar dilakukan.

KESIMPULAN

Bioteknologi melibatkan manipulasi gen dan Teknologi Nano melibatkan manipulasi atom dan molekul.Kini, terdapat banyak usaha dan penyelidikan dan pembangunan serata dunia untuk mengaplikasikan konsep teknologi nano dan bioteknologi. Dikatakan, apabila manusia berjaya memahami dan mempraktikkan teknologi nano dan bio, mereka akan berjaya pula mengintegrasikannya dalam teknologi kepintaran buatan untuk membantu mereka yang cacat anggota (penggunaan chip organik), teknologi bionik, robotik, evolusi neural-network dan fuzzy-logic dan sebagainya, kita akan menjadi lebih maju di masa hadapan.

Berita Berkaitan Berita Nanotechnology

THE IMPROPER AND IMBALANCE TUTORING

Tetty
Henney's Log - 02/2006

A boy and his mother were standing in front of the school gate. Despite there was a huge crowd of students walking in and out of the school gate, yet parents persistently waiting for their loved ones. ON one side, a group of people was also busy with their work - cutting and trimming some trunks and branches of the trees inside the school compound. And besides that, felling trees as well!!

No more big and beautiful trees that used to be the symbol of the school natural beauty. Earlier, trees that were planted along the way up to the hill leading out to all sub-ways and sub-roads are being fell. The community may either talk yet annoyed or some may lodge complaints and others prefer to stay speechless.

The mother cried silently. Being a teacher as well, she told her students about the
importance of oxygen. She also provides them the source of where this air comes from. She urged her students not to cut trees as they are the major source of oxygen. The son who has just being introduced to science subject is a Year 4 student. "Mom, my science teacher told me that leaves supply oxygen to the air. Why my schools throw away the big leaves??

He is 10 years old. This year is the first year he is learning science. The mother was distraught and gazed at her son who was indeed, confused. There appear to be an improper and imbalance education between what he learns and what is happening around him. She sighed.

These are some of the smart children who at all times searching for some answers. And mothers seldom resolve such issues in a matured way. I have been told by some students that they were given a typical reply, "I will see your teacher or headmistress and ask why she permitted them to cut your trees, dear." She held
his hands and they both walked home expecting to see miracles.

Today, children are being taught science facts and hypothesis. There have been some achievements and improvements (evolutions) in the editions of the school's science books for the past 15 years.

Living in the new era, there are always conflicts arising between those people who
produce goods and services and those who fight for liberty, safety, peace, justice and quality. These two entities hold difference principles and goals in their lives. One brings out the resources to people and the others cry out for a better and healthier lifestyle. They do not share similar ideas and thoughts. They are both enemies.

The boy and the tree cutters are the simplest examples of these two entities.

The Star Global Malaysians Forum Posted: 06 August 2006 at 7:27pm

Nik Zafri's Comments

Here's an article from Greenpeace :

Nuclear power: No solution to climate change

“Nuclear power is expensive, slow and dangerous and it won't stop climate change. If the answer is nuclear power, it must have been a pretty stupid question.” Ian Lowe President, Australia Conservation Foundation.

The new battlecry of the nuclear industry is that nuclear energy is the answer to global climate change. Nuclear energy is toxic and dangerous. Far from being rehabilitated, the nuclear option is a convenient distraction from the problem of climate change and stalls real action to combat it.

Nuclear power lobbyists are correct that climate change demands an urgent and quick response. But replacing polluting coal and other fossil fuel-based power with another environmental disaster -- in the form of nuclear power -- is NOT the answer we need. Our best long-term solution for an emission free and greenhouse-friendly future are the truly clean and green renewable energy sources – particularly wind and solar - combined with technologies that vastly improve energy efficiency.

In Asia...

Asia is projected to have the largest growth in installed nuclear generating capacity from 2002-2025, accounting for 96% of the total projected increase.

Cost: Nuclear power is more expensive. Not only is nuclear power more expensive than fossil fuel generation and clean, renewable wind power, it also leaves a legacy of unsafe yet highly expensive technologies. Costs associated with safety and security, insurance and liability in case of accident or attack, waste management, construction and decommissioning are rising substantially for nuclear power, while the cost of wind and solar power is falling. Nuclear power plants have only presented a veneer of economic viability in the past due to heavy government subsidies. As energy markets have liberalized around the world, investors have turned their backs on nuclear energy. The number of reactors in western Europe and the United States peaked 15 years ago and has been declining since. By contrast, the amount of wind power and solar energy is rising at rates of 20 to 30 per cent a year.

The hazards associated with nuclear power include the risk of potentially catastrophic accidents like the 1986 Chernobyl nuclear reactor disaster, routine releases of radioactive gases and liquids from nuclear plants, the problem of nuclear waste and the risks of terrorism and sabotage. The International Energy Outlook 2005's projection that Asia will have the largest growth in nuclear generation in the next two decades exposes the region, which consists mostly of developing countries to these hazards, more than any other region. Asia will soon be dumping ground of nuclear technology if we do not reject this trend. and work in favor of renewable energy and improved efficiency.

Waste: Nuclear waste disposal is still an unsolved problem. The most dangerous form of pollution ever created, nuclear waste remains radioactive for hundreds of thousands of years. Uranium mines typically generate volumes of long-lived, low level waste which is kept on site. Reactors release radioactive emissions to air and water. Reprocessing plants generate a high-level radioactive waste stream and emissions to air and water. All these pose risks to the health of the public. Monitoring and maintaining waste deposits over a period spanning 20 times the length of known civilization is an unacceptable burden we are placing on all future generations – with no guarantees of long term safety.

Nuclear proliferation: Nuclear technology, such as uranium enrichment is also used in nuclear weapons production, and therefore a proliferation risk. There are now more than 40 countries with the capacity to build nuclear weapons, and international efforts to stop the proliferation of nuclear weapons technology are failing. Nuclear technology will always carry the risk that it will be used to construct weapons of mass destruction.

Greenhouse polluters: Claims that nuclear power is “emissions free” are false. Substantial greenhouse gas emissions are generated across the nuclear fuel cycle. Fossil-fuel generated electricity is more greenhouse intensive than nuclear power, but this comparison only holds true if high-grade uranium ores are available. Even with such high-grade ores, there is a massive increase in greenhouse pollution from mining, processing and reactor construction before any electricity is generated. The known resources of high-grade uranium ores only amount to a few decades' use at the present rate. Most of the earth’s uranium is found in very poor grade ores, and recovery of uranium from these ores is likely to be considerably more greenhouse intensive. Nuclear power emits more greenhouse gases per unit energy than most renewable energy sources, and that comparative deficit will widen as uranium ore grades decline.

Safe, clean alternatives

To avoid dangerous further changes to our climate, we need to act now. Asia in particular should make a commitment to the sensible alternatives that produce sustainable cost-effective reductions in greenhouse pollution: wind power, solar water-heating, energy efficiency, gas and energy from organic matter. Renewable energy and energy efficiency can deliver the power we need – without the environmental and social problems.

Renewable energy already supplies 19% of world electricity, compared to nuclear’s 16%. The share of renewables is increasing, while nuclear’s share is decreasing. Renewable energy sources such as wind power and solar power are growing by 20-30% every year. In 2003, the cumulative installed capacity of solar photovoltaic (PV) systems around the world passed the landmark figure of 2,400 Megawatts of solar photovoltaic power. Global shipments of PV cells and modules have been growing an average annual rate of more than 35% for of the past few years, providing employment for 10,000 people and generating business worth more than 3 billion euros annually. Wind power, on the other hand, is the world’s fastest growing energy source with installed capacity growing at an average annual rate over the last 5 years of 15.8%

Renewable energies have truly limitless sources, can be more easily deployed in remote developing regions, present absolutely no risk to global security and are environmentally-friendly.

Because there is only a finite amount of investment available for new energy, any investment in nuclear power is effectively money denied to renewables and energy efficiency. Nuclear power, with fifty years of failure as its track record and still no solutions to its fundamental problems, remains a shockingly poor investment choice. The wise decision then, is to say no to nuclear, yes to renewables and energy efficiency.

Nik : So, with this, I say 'bye-bye' to nukes!
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Comments by ahvincent

Nuclear power plants do not produce the same amount of green house gas pollutants but they produce another kind of pollutant, Nuclear Waste.!!! And nuclear waste will kill you a lot quicker and have a half life of hundreds of years with a potential to kill even more is it gets out of control !!!

Some of our Oz politicians have got s*&t for brains !!! They have completely missed the point, surely it would make more sense in trying to develop wind powered turbine farms or look at harness more hydro energy.

All along the coast around the Great Australian Blight the wind is very strong 24/7/365. It lends itself to wind farms and with modern light weight turbines which are very efficient I think they should investigate that option.
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Response by gleearch

Ahvincent,

I agree. Nuclear energy isn't a cure all. Nothing sustainable about it at all. You are right. A pollutant or waste is still waste. In this case highly dangerous. There's still not good way to get rid of nuclear waste. I don't think dumping them in concrete holding facilities is really doing any good. Or storing them under sea.

There's plenty of sun and wind in Australia as you pointed out. Some of the new skyscrapers going up in new York have built in wind turbines to generate electricity.

They keep on developing new wind turbines that can reduce accidents with birds. No pollution. Plenty of cheap renewable energy. Same with solar panels.
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Posted: 09 August 2006 at 8:15am

Response by ahvincent

I will recount a first hand story about an early experimental plant using solar energy generated electricity system. I used to work with a major USA based power generation company many years ago. They installed one of their early prototypes on an isolated village in Papua New Guinea. These villages did not have electricity and no road access. All diesel fuel will have to be flown in thus making it prohibitively expensive. So solar power was an ideal solution to bring the marvels of modern science to these primitive jungle tribes.

We intalled a solar powered generation plant enough to provide the bare essentials to the village. This system had a diesel motor as a backup to charge the batteries in case of a cloudy day or an emergency.

Everything seem to be working fine when our technicians were on site but once they left we keep getting calls that our system was not functioning properly. They have to use the diesel generator all the time and the authorities had to keep flying in fuel at a great expense.

So we send our technicians in and they found out that the natives who have not seen an electric light in their lives were keeping all the lights on all night and sitting around the lights watching it. Little wonder that the supply ran flat before morning.

Anyway the project was deemed a failure for a variety of reasons and we did not sell more than a handful of our remote solar electricity plants. That was many many years ago, I am sure the price of solar cells have got more efficient and less costly now and maybe this type of projects may become more cost efficient now. I don't know.

An other example (of what seems to be a good idea at the time) of another experimental project gone wrong is the big black (W) towers in Pittsburg. If you go to Pittsburg you will see a great big (I cannot tell you the name) electric sign next to where the Ohio & Mo...(I cannot spell the name) rivers. I don't know if the sign is still there now.

This sign is lit by thousands of light bulbs. The idea was to collect the heat given off by the bulbs in the sign and the building to drive the air-conditioning in the building. Someone's brilliant idea at the time. The end result - all the lights in the sign and the building had to be left on 24/7 otherwise no air conditioning.

Disastrous experiment costing millions. At the end they just had to connect the air condition back to the usually supply source.

On one particular conference I attended someone had another brilliant idea for storing electricity. We all known batteries are very ineffcient at storing large quantities of electricity, so his idea was to use off peak power to pump water to a pool at a higher level and during peak demand periods let the water drain back down driving turbines in the process. Electricity is thus stored in the form of kinetic energy.

Other bright ideas include using off peak power to wind up a series of gaint coil springs. This did not arouse the same level of interest as the first idea,
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Posted: 09 August 2006 at 11:27am

Response by gleearch

Ahvincent,

Interesting stories. That's what happens when not a lot of thought is given to the idea. Using light bulbs to power air conditioning? Duh! as homer simpson would say. Using electricity to power up the lights and then using the heat from it to power the air conditioning.

I mean, what were they thinking.

Ok I'll offer these instead.

Ice skating rinks generate heat. That is the cooling machinery used to create the ice on the rinks generate heat. (I'm simplifying things overly much) It is common practise now to use that waste heat for other uses. Melting snow around buildings so people don't slip and fall etc.

It's about using waste heat and having a secondary system in place. Not creating a whole system to generate waste heat just to power something else.
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Posted: 30 August 2006 at 10:11pm

Response by stingray2000

Nuclear Power Won't Fix It

Nuclear power is not the answer to tackling climate change or security of supply, according to the Sustainable Development Commission in Scotland.

The SDC nuclear report draws together the most comprehensive evidence base available to find that there is no justification for bringing forward a new nuclear power programme at present – supporting current Scottish policy.

Scottish Commissioner, Hugh Raven, says:

“Our report proves how right Scotland is to fight for its ‘no nuclear’ policy. We’ve thoroughly investigated nuclear power over the last year, but have found that any potential benefits are outweighed by substantial disadvantages. With our amazing renewable resources – combined with some serious political willpower – Scotland could become a true world leader in clean, sustainable energy.”

“The SDC urges the Scottish Executive to stick to its position of not supporting the further development of nuclear power while waste management issues remain unresolved. Nuclear is not the answer for climate change or security of supply.”

In response to the UK Government’s Energy Review, the SDC report gives a balanced examination of the pros and cons of nuclear power, based on eight new research papers.

Its research recognizes that nuclear is a low carbon technology, with an impressive safety record in the UK. Nuclear could generate large quantities of electricity, contribute to stabilising CO2 emissions and add to the diversity of the UK’s energy supply.

However, the research establishes that even if the UK’s existing nuclear capacity were doubled, it would only give an 8% cut on emissions by 2035 .This must be set against the risks.

The report identifies five major disadvantages to nuclear power:

1. Long-term waste – no long term solutions are yet available, let alone acceptable to the general public; it is impossible to guarantee safety over the long-term disposal of waste.

2. Cost – the economics of nuclear new-build are highly uncertain. There is little, if any, justification for public subsidy, but if estimated costs escalate, there’s a clear risk that the taxpayer will be have to pick up the tab.

3. Inflexibility – nuclear would lock the UK into a centralised distribution system for the next 50 years, at exactly the time when opportunities for microgeneration and local distribution network are stronger than ever.

4. Undermining energy efficiency – a new nuclear programme would give out the wrong signal to consumers and businesses, implying that a major technological fix is all that’s required, weakening the urgent action needed on energy efficiency.

5. International security – if the UK brings forward a new nuclear power programme, we cannot deny other countries the same technology*. With lower safety standards, they run higher risks of accidents, radiation exposure, proliferation and terrorist attacks.

On balance, the SDC finds that these problems outweigh the advantages of nuclear. However, the SDC does not rule out further research into new nuclear technologies and pursuing answers to the waste problem, as future technological developments may justify a re-examination of the issue.



Download the reports:

Full SDC position paper
» The role of nuclear power in a low carbon economy
A commentary by Jonathon Porritt
» Is nuclear the answer?

Or order your free hard copies

SDC Chair, Jonathon Porritt, says:
“It’s vital that we get to grips with the complexity of nuclear power. Far too often, the debate is highly polarised, with NGOs claiming to see no advantages to nuclear at all, and the pro-nuclear lobby claiming that it’s the only solution available to us.

“Instead of hurtling along to a pre-judged conclusion (which many fear the UK Government is intent on doing), we must look to the evidence. There’s little point in denying that nuclear power has benefits, but in our view, these are outweighed by serious disadvantages. The UK Government is going to have to stop looking for an easy fix to our climate change and energy crises – there simply isn’t one.”

Concluding with advice on a future energy strategy, the SDC report establishes that it is indeed possible to meet the UK’s energy needs without nuclear power. With a combination of a low-carbon innovation strategy and an aggressive expansion of energy efficiency and renewables, the UK would become a leader in low-carbon technologies. This would enhance economic competitiveness whilst meeting the UK’s future energy needs.

ENDS

[Notes to Eds:

- The SDC nuclear review, research papers and audio launch interview with Jonathon Porritt are available to download at www.sd-commission.org.uk.

- The SDC has spent a year gathering evidence and agreeing its position on nuclear power.

- The process for developing the SDC position on nuclear power has been rigorous and transparent. During the process, the SDC identified three divergent positions on nuclear power: position 1 - NO, position 2 – NOT NOW, position 3 - MAYBE.

SDC Commissioners voted as follows: eight Commissioners favoured position 1, five favoured position 2, and two favoured position 3.
As part of the current Energy Review, we expect the Government will go through a comparable decision-making process, and we advise them to be similarly transparent.

- The SDC nuclear review is based on eight new research papers
(see attached evidence base summary for key facts):
1. An introduction to nuclear power – science, technology and UK policy context,
by the Sustainable Development Commission
2. Reducing CO2 emissions: nuclear and the alternatives,
by the Sustainable Development Commission
3. Landscape, environment and community impacts of nuclear power,
by the Sustainable Development Commission
4. The economics of nuclear power
by the Science & Technology Policy Research (SPRU, University of Sussex) and NERA Economic Consulting
5. Waste and decommissioning
by the Sustainable Development Commission with contributions from Nirex and AMEC NNC
6. Safety and security
by the Sustainable Development Commission with contributions from Large & Associates and AMEC NNC
7. Public perceptions and community issues
by Professor Robin Grove-White, Dr Matthew Kearnes, Dr Phil Macnaghten and Professor Brian Wynne
8. Uranium resource availability
by Future Energy Solutions, an operating division of AEA Technology plc

- The Sustainable Development Commission is the government advisory body on all matters relating to sustainable development, reporting to the First Minister in Scotland and Prime Minister at UK level . Through advocacy, advice and appraisal, we help put sustainable development at the core of Executive policy.

SOURCE: Sustainable Development Commission UK

The Star Global Malaysians Forum
Posted: 26 September 2006 at 11:58am

Comments by ahvincent

Nowadays most Owners insist that we design certain basic "green" peinciples into buildings. The guideslines are still pretty loosely defined but generally speaking our designs do incorporate the basic generally accepted "green" principles and must be efficient and economical to build.
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Posted: 28 September 2006 at 10:59am

Further comments by ahvincent

I read somewhere they have started to construct a wind farm in the Mornington Peninsula in Victoria where it is always windy 365 days a year. I think they are saying that eventually there will be 2,000 such mills in the farm.

Some people say it is not economical....but I don't know or understand why it wouldn't be. It certainly is eco friendly. Well, I will just have to wait and see what will come out of it in the future.

Co-generation of electricity is already practised in parts of Europe and Japan. Australia is currently building a massive wind farm to generate power. It's success remains to be seen.
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Posted: 29 September 2006 at 6:59am

Response by gleearch

Ahvincent,

There will always be detractors who will say wind farms and pv farms are not feasible.

The question to ask is, compared to what?

A diesel burning electric generator? While they build those things in masses, it still takes fuel to fire up and operate. Not to mention the pollution etc.

Yet wind farms and PV use free energy. Since all generators need to be maintained, upkeep costs are somewhat moot. Though with PV, it's really low maintenance.

What most people don't realise is that these wind turbines are getting smaller and more efficient. Some are now being installed on high rise buildings to take advantage of the high wind speeds near the tops of these buildings. In some ways this is better, because you are utilizing urban space instead of green fields.

It's mainly the oil lobby which likes to kcik up a big fuss about the costs of going green. Unfortunately for them, those arguments don't hold much water now. The cost of green is coming down fairly rapidly and most new buildings that use LEED or similar sustainable design strategies are seeing these cost fast closing the gap with conventional construction.
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Posted: 29 September 2006 at 6:24pm

Nik Zafri's Comments

I think it's a fabulous idea to have wind turbines installed on top of buildings esp. here in Malaysia. I've seen it abroad but never seen it in Malaysia so far. The higher the building is the better - where wind is fastest. I ain't sure about the cost say...RM..../kWh. But I do know it's cheaper than nuclear.

I'm not sure about old buildings Gerard, probably they are not designed for stress from wind turbines compared to new buildings packaged together with wind turbines.

However, with oil/coal/gas are depleting, wind turbines can become an economical option.

I've also read somewhere about green building standard - it talks about renewable energy and fuel cell equipment - that will enable us not to be overdependent on fossil fuels and conventional electricity. Examples quoted - solar water heaters, photovoltaic systems and wind turbines.

You can see something even more interesting over here as well. The pic below is the FUTURE!



http://www.esru.strath.ac.uk/EandE/Web_sites/01-02/RE_info/Urban%20wind.htm

Wind power can be used to generate electricity in an urban environment. The easiest way to do this would be if everybody built a 600kW turbine on the top of his or her house.

This is quite clearly not feasible, but urban wind generation is. The University of Strathclyde in Glasgow was involved in a project to redevelop the Lighthouse building in Glasgow. The Energy Systems Research Unit was involved to show how renewable technology can be utilised. One device they decided to use was a Ducted Wind Turbine.

This device sits at the edge of the roof of a building and utilises the updraft of the airflow along a building side. The air flows upwards, hugging the building wall then enters the front of the duct. The arrows above show the flow through the turbine. The spoiler at the top of the turbine also utilises a PV module to increase generation from renewable energy. The spoiler is optimised to create a pressure differential across the duct and the PV is mounted at this angle.

The devices are relatively small with a blade diameter of 600mm so they possess very little visual impact on a building.



These devices are suitable for an urban environment but not households. They are more suited to office buildings and high rise buildings rather than a small household. These devices are unlike most other common wind turbines in the fact that they are uni-directional. As explained in the Beginners Guide most turbines will position themselves perpendicular to the flow of the wind. A HAWT will yaw into position and a VAWT is always in the correct position. These turbines are fixed into position so are dependant upon the wind blowing in the correct direction. Because of the duct the turbine will perform favourably to a wind direction variability of 120o. (60o to each side of perpendicular to turbine.)



The wind direction is Scotland is predominantly south-westerly so the turbines should be positioned on the South and West edges of any structures roof.

Theoretical Power Outputs

Using the devices installed at the Lighthouse an approximation on the power outputs can be made. The theory from the Beginners Guide to Wind applies here.

Air density ( ) = 1.225kg/m3
Diameter (D) = 0.6m
Wind Speed (V) = 10m/s
Cp = 0.35

Swept Area of Rotor = R2 =0.2827m2



P = 173.18W (This is the theoretical power available)



P = 60.61W (This is a realistic value of power available)

The value above shows the power available theoretically for a single ducted turbine, but in real terms they would be installed in banks along the edge of a building roof.

One single ducted wind turbine would produce 530kWh electricity per year

An average installation would probably consist of 10-ducted turbines; this would yield an annual energy production of 5308.56kWh. The installation of a PV on the spoiler would again increase the power output and if the same module from the Urban PV section is used the expected power for a bank of 10 ducted turbines would increase by 722.93kWh to 6031.49kWh per annum, assuming that each ducted turbine has one PV module installed on its spoiler, which covers an area of 0.61596m2.

Actual Power Outputs

The previous calculation assumes the basis that the wind speed would be constant at 10m/s for the duration of the year and that the wind would be blowing in the correct direction of the turbine. The value of power produced from these machines will be less than stated above because of these stated assumptions.

An estimation of the expected wind speeds in Glasgow could be made using data collected in Bishopton (10 miles south-west of Glasgow) (NGR = 2418E 6711N - Altitude = 59 metres - Latitude = 55:91 N Longitude = 04:53 W) every hour during 2001-



The chart shows the availability of the wind at certain angles including the 60o availability. It clearly shows southwest to be the predominant wind direction. The chart shows that in the southwest direction that the wind is only available 11% of the year at 10m/s. Obviously the wind will blow at speeds less than 10m/s but as explained in the beginners section this would greatly reduce the power output. Again the wind will blow at speeds greater than 10m/s and greatly increase the power output but this would be a rare occurrence throughout the year.

The theoretical power outputs shown above are probably the upper limit of the power expected from these ducted machines and a capacity factor of about 25% is more realistic, knowing that for HAWT in Scotland the capacity factor is approximately 35%, since these ducted turbines are uni-directional.

Therefore a realistic power output from a single ducted turbine would be

(530.856 x 0.25)+ 72.293 (from PV) = 205kWh/year

Individual Possibilities

We have discussed how it would not feasible to expect everyone to have a wind turbine on their roof but there is a lot of unused roof space in city centres on large office buildings and also factories roofs could provide an ideal place for wind turbines to be deployed. As we are unsure of the roof area available in Scotland, this example will demonstrate the effects of a wind turbine for every person in Scotland (5,115,000 people)

One wind turbine (530.856 x 0.25)+ 72.293 (from PV) = 205kWh/year

This would result in an electricity production of;

i) = 205(kW) x 5,115,000= 1,048,575,000kWh

1,049GWh, which is 3.3% of Scotland's yearly electricity consumption
(Scottish Total = 32037GWh)

National Benefits

The introduction of ducted wind turbines could result in an annual reduction of carbon dioxide emissions in Scotland, every kWh of electricity produced from fossil fuels results in 0.97 kg of CO2

i) 0.97kg x 1,048,575,000kWh /year = 1,017,117,750 kg/CO2



1.4 % of Total Scottish CO2 Emissions - (1.4 % of 72,300,000,000 kg)

The future

No estimation on the cost of installation can be made, as these devices are very much in the research and development stage at this moment. The research into this field is growing as more people become interested in urban wind generation. Below are some images of ideas to utilise urban wind generation. A website exists that is only interested in the development of wind turbines for the urban environment. (www.urbanturbines.com).

Such a technology could be deployed relatively cheaply in the future however more research has to be carried out to examine the energy production potential and where electricity produced could be used successfully. Many designers are considering the integration of wind turbines within buildings again it is not yet known how feasible this will be.
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Posted: 30 September 2006 at 12:59am

Response by gleearch

Nik,

Large system obviously would have a difficult time being retrofitted to old buildings. That's where PV panles and smaller wind systems could be used.

That's another issue. The reuse of older buildings.
More along the lines of saving and recycling historical buildings. Too often as we have seen throughout asia, beautiful old buildings are torn down and replaced by what is touted then as the future. Half the time, they are ugly boxes with no real design in them.

However recycling buildings, salvaging them and reusing them is another otpion of being green. Green isn't always about building a brand new building with all the latest technology.

Sometimes it's about reusing an old building. Some of these buildings have huge timbers, etc that you cannot find today. So it's worthwhile to salvage those materials if not reusing the building. If the existing building is reused, obviously there are issue with hazardous materials etc but those can be mitigated and old HVAC systems can be replaced. A good designer can make the most out an existing space or create additions which respect or work well to ennhance the existing building.

There's is so much more to being green. It's a good time to be working on saving the environment.