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South Africa’s long road to energy independence

Amid daily blackouts, the country's firms are transitioning to net zero themselves.

By Samir Jeraj

During a tour of BMW’s IT hub in a shiny business district of Pretoria the power cut out. As we waited for back-up generators to kick in, the building went dark. Outages can last for hours. The company’s critical IT systems are connected to an independent power source as protection, but outside, as traffic lights ceased to function, the noise level from car horns spiked.

South Africa’s problem of “load-shedding” – where the amount of power to the grid cannot meet demand – has plagued the country since 2007, when energy reserves ran out (the government warned as early as 1998 that the sector was in trouble). Eskom, the state-owned energy company, has been heavily criticised for mismanagement and been accused of corruption, much like the government. The decades of poor maintenance and investment in South Africa’s power stations and infrastructure are biting. Unemployment in Africa’s most industrialised economy stands at 32.6 per cent, and youth unemployment at 61 per cent. Inequality is high.

The energy transition could be a solution to these problems. In a country with plenty of sun, solar energy has the potential to transform South Africa’s energy infrastructure and remove a major obstacle to economic development. While the government is working to fix the immediate problem of crumbling power stations – which are still largely powered by coal – companies and communities are taking their own steps towards energy independence.

On a given day, even in business districts and wealthier neighbourhoods, the power goes out multiple times, disrupting everything from schools to manufacturing. BMW’s Rosslyn plant may be relatively unaffected by load-shedding – it is located in an area where the power network is strong – but several of its suppliers are. This can have an impact on production, and needs to be factored into business decisions.

It has not, however, affected the company’s decision to invest $224m into the plant to produce plug-in hybrid and electric vehicles. The factory itself draws 30 per cent of its power from a biogas plant, with the aim of transitioning to renewables by the middle of this decade, said Peter van Binsbergen, CEO of BMW South Africa.

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The country has estimated it needs $84bn in climate finance to transition its economy. Most would go to the energy sector, along with investments in new energy vehicles and green hydrogen generated from renewables. Whether South Africa and other middle- and low-income countries will get the funding they need – wealthy nations have yet to meet a yearly target of £100bn pledged in 2009 – is a debate for Cop28, which starts in Dubai at the end of November. Without it, South Africa may suffer energy crises for years to come.

[See also: Do pensions hold the key to the UK’s net zero transition?]

The plan to transition Rosslyn and the vehicles it manufactures is ambitious and builds on other environmental improvements. Water consumption at the factory has been reduced by 38 per cent in a country that is water-scarce. One hundred per cent of waste from the factory is recycled either within the factory or via partners. The company works with Envirolite, a South African firm, to repurpose the polystyrene used at the factory as lightweight concrete bricks for affordable housing.

Water consumption at Rosslyn is largely from the paint shop, where the car chassis is covered with chemicals to protect against corrosion and then painted. This is now automated, with the cars conveyed through a warehouse and dipped slowly into vats of liquid. The employees who worked on this section of the line have been retrained to work in other parts of the factory, without job losses. This emphasis on retaining and retraining workers is important for the transition to electric vehicles too, explained Ilka Horstmeier, the people and real estate, labour relations director at BMW. “Many people are always asking me, ‘How can a person who builds an engine build an HPB [hybrid plug-in battery]?’” she said. “They can because they know production. They have so much experience in how to build cars, how to build or how to improve production systems, how to maintain them; we can use that knowledge.”

BMW’s current plan is to export the new electric and hybrid plug-in vehicles, mainly to Europe. For the domestic market, existing charging infrastructure is limited and dependent on the parlous energy network. Battery EVs currently make up less than 1 per cent of domestic car sales. Van Binsbergen is looking to hydrogen fuel cell technologies, using the potentially abundant solar power from the Eastern Cape province to produce it. These “could be exactly the answer for such conditions”, he said.

Industry is not the only sector to initiate the energy transition independently. At Ntsha-Peu primary, a school for 700 children in the Soshanguve township 30 kilometres north of Pretoria, the classrooms are largely powered by solar panels on the roof. These are connected to batteries that store excess energy to be used when needed, meaning that the school, which has two classrooms of computers, can continue to function through blackouts.

There are less hopeful examples of energy independence, too. South Africa’s high rates of violent crime – 6,228 murders were committed from April to June this year – make it one of the most dangerous countries in the world. Gated communities with armed guards and electrified fences are ubiquitous, with security systems protected against blackouts by solar panels.
In July 2022, President Cyril Ramaphosa set out a plan to tackle the energy crisis, expanding the amount of available energy from solar and imports, and supporting businesses and households to do the same. This has helped mitigate the load-shedding problem. BMW’s investment in producing hybrids and EVs is a vote of confidence in the future.

Further changes need to happen to support the move to EVs, however. That includes finding ways to protect suppliers along the supply chain from load-shedding, working with industry to expand the charging network, and establishing a common battery factory in South Africa that could supply the whole sector.

It is clear, however, that without fundamental reforms the challenges of a struggling energy system will persist. Van Binsbergen said he had faith in the steps taken by the government to tackle load-shedding, but there is more to be done: “These two things move in parallel, so on the one hand is the energy transition to renewables, as well as getting our existing infrastructure back-up to where it should be.”

Samir Jeraj’s reporting trip was funded by the BMW Group. New Statesman Spotlight retained editorial independence

This piece originally appeared in a Spotlight supplement on Sustainability

[See also: New oil and gas licences will “do little for energy security and nothing to lower bills”]

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