Lance Dickerson, MD at Revov.

Last week many people were holding their breath hoping new Finance Minister Enoch Godongwana would wave a magic wand and fix Eskom’s woes. Unfortunately, that’s not what happens in mid-term budget speeches generally, and it didn’t happen last week either. Besides learning that state-owned enterprises were in for some “tough love”, we simply got reinforcement of what we already knew: we will have electricity constraints for some time to come.

While Eskom feels some tough love, our economy is likely to continue feeling the pinch. While the power woes are equally disruptive to everyone, larger corporations are more inclined to have the balance sheet to at least build back-up contingency, while some medium and smaller enterprises, especially micro enterprises, are at the mercy of the gentleman or lady flicking the load shedding switch.

Let’s think about this practically. Imagine an electronics or retail store in the middle of a shopping mall. If the mall does not provide back-up power to every tenant, what does the retail store do when the power goes out? Perhaps it operates with camping lights and battery-operated pay point machines? If a power surge trips the substation, which is not uncommon in many areas, the power outage can be substantially longer than expected and eventually the lights and machine will run out of battery.

But that’s only half of the story. The other half is customers choosing to stay away from the area entirely as their irritation with backed-up traffic and bottle-necked intersections means they’d rather not waste valuable time. The foot traffic often reduces.

This mall tenant obviously cannot run a generator inside the mall, and it cannot run an extension cord from outside the mall to the store. Its only option is an uninterrupted power supply (UPS) system. Unfortunately, many businesses that aren’t constrained by mall layouts can, and do, run fossil-fuel generators which, besides the obvious noise pollution, are belching environmentally dangerous toxins into the atmosphere.

In a desperate attempt for survival, there appears to be a pay-off between being considerate to the environment and keeping the lights on to continue trading. It becomes, especially to smaller businesses, a matter of survival.

Recently, a neighbour in an acquaintance’s housing complex rushed out to buy a petrol-operated generator when the local substation kept tripping after load shedding, leaving the lights off for hours on end. When asked why she did this, she explained that her son was writing online matric exams and that if he were unable to be online, or unable to submit answers, that was it – his only chance was lost.

The danger with this is that some suppliers of power back-up are using the same reasoning: that when pitted against the dire need for stable power, a solution’s carbon footprint becomes irrelevant. Even in the battery backup industry, there are suggestions that carbon footprint doesn’t matter, as long as the solution does what it promises to do – keeps the lights on.

Whereas lead acid and first life lithium iron phosphate batteries are the result of manufacture for storage – meaning the raw materials are mined and shipped across the world, beneficiated, then shipped back to various markets – second life lithium iron phosphate batteries have already serviced the electric vehicle market. If we consider that there is still no commercially viable battery recycling technology, then the use of second-life batteries, made from repurposed – note, not second-hand – EV cells makes environmental sense because the demand for power back-up does not drive new, carbon-intensive mining and manufacture.

Despite this, many proponents publicly state this doesn’t matter because the objective is to keep the lights on, not help save the environment. Beyond this, South Africa competes with the whole world for these first life batteries, and growing lithium shortages are likely to put immense strain on the local first life supply chain, with time delay and economic consequences in the form of input costs that will be passed on to the customer.

Beyond the looming shortage, the overwhelming climate evidence is now clear – humans have cumulatively damaged the environment to levels where it presents an existential threat, far closer on the horizon than many wish to admit. I would posit that it is our collective responsibility to try to minimise our carbon footprint, be it corporate or personal.

The immediate push-back is always with a dose of “what about”. What about your car? What about the beef you eat? What about the malls? Beyond that, there is a sense that if we simply ignore it, it will go away. It won’t, and the days of sticking heads in the sand are numbered.

Just a few weeks ago it was announced that South Africa would get an $8.5bn support package from EU countries and the US to build renewable power and move away from coal. Just prior to that, our president re-affirmed the country’s climate targets. In many regions, ESG investing targets mean that companies that don’t have clear and measurable carbon-reduction strategies will be overlooked by investors. EU countries – our biggest trading bloc – have set various targets on EVs and other carbon-reducing strategies across industries, meaning that our very ability to export may be affected by our own carbon footprint.

All of this, read against the recent announcement of up to 100MW embedded power exemptions in the private sector, mean that it’s not a matter of if, but rather when, we will all be forced to choose the more carbon-friendly solutions across all industries, including the power back-up industry.

If the moral responsibility of protecting the environment isn’t a compelling enough carrot, rest assured, the stick of growing first-life lithium battery shortages and economic pressure is coming.