South Africa braces for perfect storm in bid to gain green independence
Sometimes, despite the writing being on the wall, it takes a single straw to break a camel’s back. For all our best intentions, and well-meaning words, it is often easier to continue with the status quo. However, a perfect storm in South Africa has now well and truly added the final straw and catapulted us into a new energy future. While it's painful now, we’ll be grateful in a decade or two from now.
South Africa has relied on an ever-weakening coal-based national power supply, with Koeberg being the sole nuclear reactor. As far back as 1998 - some would argue earlier - the writing has been on the wall. In the years leading up to the 2010 World Cup, the new-builds such as Medupi were already too little, too late. This is even before the cost overruns, delays and expensive design flaws. This as other countries were investing billions into renewable energy builds.
We’ve had some great announcements locally. There is a 100MW private embedded exemption and if one drives along various routes such as the N2 in the Eastern Cape you’ll see growing wind farms, but where is the mass rollout of renewable power generation? Most South Africans can answer this question.
Over the same period, the world has become conscious of the environment and there’s been a push towards reducing carbon emissions. The Congress of the Parties (COP) 27 will proceed later this year in Africa, after the last edition, COP 26, was criticised for underrepresenting the so-called Global South. All eyes will be on countries such as ours.
While one may well be cynical about the level of carbon emission concern globally, the truth is that many countries have already made bold commitments. Norway, France, UK, US - they’ve all made bold plans to reduce and outlaw internal combustion engines by various dates - all of which fall, by the grace of God, comfortably within our lifetime. We’ll see it.
China is light years ahead of a country like South Africa. Shenzhen, the home of electric vehicle (EV) maker BYD, has 16,000 electric buses and 22,000 electric taxis. Carmakers around the world are investing billions of dollars into research and development, from 100% EV makers to traditional brands plotting their plans to shift their businesses to the certain electric future.
None of this is new. We’ve known this in South Africa for years. We’ve known the world is moving to renewable energy and e-mobility. Ask the average South African for their thoughts on the mass rollout of electric charging stations and their answer will likely be: “Great, but where will the electricity come from?”
Everyone knows Eskom barely has its head above water - we feel it with incessant bouts of load shedding. This is part one of the perfect storm. Out of necessity the government will have no choice but to speed up the transition to renewable power generation, complete with private players that can deliver. Businesses and households have little choice but to find ways to protect themselves from this unreliability.
The second part of the perfect storm is the cost of fuel. The end of May will likely see a record fuel price increase, made worse by the temporary fuel levy grace period coming to an end. Running a generator during prolonged periods of load shedding is very quickly becoming something only those with very deep pockets can contemplate. One shudders to think that Eskom runs diesel generators to keep our lights on. The costs are eye-watering.
The third part of the perfect storm is the repo rate increase cycle, putting pressure on already squeezed retailers and consumers. Costs eventually have to be passed on. Imagine running a small or medium business that’s dependent on electricity to generate revenue while the power is removed in bouts of stage 2, 3, 4 (and possibly more) load shedding.
Imagine the squeeze when read against increasing rent, increasing input costs and ever-more weary customers. How long is this sustainable?
The fourth part of the perfect storm is the willingness of private financial institutions and lenders to proudly advertise credit and funding lines for renewable installations. Businesses and private households will likely take up this offer precisely because it gives them the opportunity to develop freedom from dependence on a broken grid.
Within five years we will see huge investments in installations of all sizes - homes, small businesses and larger manufacturing and mining operations that require high-voltage solutions. Lithium iron phosphate batteries mean that the ability to store energy has come on in leaps and bounds.
That’s the perfect storm - where South Africans are forced to make the transition. However, the good news is that by using 2nd LiFe batteries - where the cells are repurposed from EV batteries - consumers and businesses can make the transition with the peace of mind that they are contributing to an important step in the circular economy: they are using batteries that don’t add further strain to the environment such as their first life counterparts.
That’s where we want to be: in a world where conscious decisions are made to look after the planet. If it takes us being forced - through a perfect storm of Eskom failures and economic headwinds - to get there so be it. Better late than never.