Lance Dickerson, MD at REVOV
Much of the talk in the media recently is around suspected sabotage at Eskom. That’s right, while you and I scramble to build freedom from the grid into our businesses and homes, we hear that not only is the ageing infrastructure a problem, but that there are quite possibly people on the inside who are breaking what does work.
Whether or not these allegations are true doesn’t change our South African reality. Whether a group of people are deliberately attacking the infrastructure or whether the infrastructure is ill-maintained doesn’t change the fact that for the next few years more of the same is to be expected.
Small businesses are among the worst affected and people are correctly scrambling to build backup contingency plans. However, 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.
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.
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.
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. We can’t afford to bury our heads in the sand.
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, means 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.