BUSINESS TECHNOLOGY MEDIA COMPANY
Companies
Sectors

President commits to ‘green’ industrialisation, EV production

Read time 5min 20sec
President Cyril Ramaphosa.
President Cyril Ramaphosa.

South Africa will pursue green industrialisation projects, such as production of electric vehicles (EVs), as the “world is facing a climate crisis of unprecedented proportions”.

So said president Cyril Ramaphosa in his weekly newsletter yesterday. According to the president, the latest report from the world’s leading climate scientists has warned the pace of global warming is rapidly increasing, and Sub-Saharan Africa has been experiencing temperature increases well above the global average.

“We will be decommissioning and repurposing coal-fired power stations, and investing in new low-carbon generation capacity, such as renewables.

“We will also pursue ‘green’ industrialisation, such as manufacturing using green technology and a shift to the production of electric vehicles.”

Ramaphosa’s call for the shift to electric vehicles comes as consumer appetite for EVs is on the increase, with 72% of surveyed South Africans saying they are planning to buy an electric vehicle within the next five years.

This is according to the 2021 Electric Vehicle Buyers Survey, conducted by SA’s biggest automotive online marketplace AutoTrader, in partnership with e-mobility services company Smarter Mobility Africa.

By June 2021, about 1 400 plug-in EVs had been sold in SA − 0.014% of the total car fleet of 10 million vehicles globally − an indication the country is severely lagging behind counterparts, notes the report.

SA also only has five EV models for sale: Porsche Taycan, Jaguar I-PACE, BMW i3, Mini SE and Volvo XC40 P8 Recharge.

Major clean-up operation

On the renewables front, SA has been making steady progress in bringing clean energy sources to the grid.

The power utility has from time to time failed to keep the lights on, resorting to load-shedding. From last week, South Africa was once again plunged into darkness after the embattled power utility announced stage two load-shedding.

In an effort to resolve the country’s energy supply shortfall and reduce the risk of load-shedding, Ramaphosa in June lifted the renewables industry when he announced the amendment of Schedule 2 of the Electricity Regulation Act, to increase the National Energy Regulator of South Africa’s (NERSA’s) licensing threshold for embedded generation projects from 1MW to 100MW.

SA’s renewable energy industry in August welcomed government’s official announcement that independent power producers of up to 100MW will not require a licence from NERSA to operate.

This, after the Department of Mineral Resources and Energy published the gazette on the lifting of the self-generation threshold to 100MW, without licensing.

In his newsletter, Ramaphosa said climate change presents serious health, environmental and economic risks for the country.

He noted these risks will have increasingly damaging effects on human health, water availability, food production, infrastructure and migration.

“Many South Africans are already feeling the effects of climate change through drought and flooding, which have an effect on their livelihoods. Several communities in Mpumalanga, for example, are affected by high levels of pollution, which increases respiratory illness and other diseases. Those who are dependent on the ocean for a living have already seen depleted fish stocks amid changing weather patterns and changes in ocean temperature.”

There are broader economic risks, he added. “As our trading partners pursue the goal of net-zero carbon emissions, they are likely to increase restrictions on the import of goods produced using carbon-intensive energy.

“Because so much of our industry depends on coal-generated electricity, we are likely to find that the products we export to various countries face trade barriers and, in addition, consumers in those countries may be less willing to buy our products.”

A matter of necessity

Ramaphosa pointed out that the other economic risk is that investors will shy away from investing in fossil fuel-powered industries.

Banks and financial institutions are already facing pressure from their shareholders not to finance enterprises that depend on fossil fuels to produce their products or services, he said.

“All these emerging trends mean we need to act with urgency and ambition to reduce our greenhouse gas emissions and undertake a transition to a low-carbon economy. Many of our peer countries have already started migrating to low-carbon economic dispensations.

“We, however, need a transition that is just because there are several important sectors of our economy that will be negatively affected by such a transition, including agriculture, tourism, mining, energy, transport, manufacturing and the biodiversity economy.”

That is why a transition to a decarbonised economy must address the needs of workers in these industries and in affected communities, said the president.

“The process of transition needs to be based on the full involvement of organised labour and business in targeted programmes of reskilling and upskilling, creating employment and providing other forms of support to ensure workers are the major beneficiaries of our shift to a greener future.

“As a country, we are developing detailed plans to enable a just transition. Our electricity sector, which contributes 41% of South Africa’s greenhouse gas emissions, will be the first phase of the transition. It will be the quickest industry to decarbonise and will have a beneficial impact across the economy.”

The president also noted Eskom will be undertaking a pilot project at its Komati Power Station, which is due to shut down its last coal-fired unit next year, to produce power through renewable energy.

Komati will serve as a good example of how this shift from coal dependency could be achieved, he said.

“To signal our increased ambition, Cabinet recently approved our updated Nationally Determined Contribution, which sets out our emissions targets towards net-zero carbon emissions by 2050.

“This sets a target range for emissions, from restricting global warming to less than two degrees Celsius at the top of the range, with the bottom of the range compatible with the goal of restricting warming to less than 1.5 degrees Celsius.”

See also