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Rapid shift to renewable energy vital for electric vehicle transition, says Minister Patel

Rapid shift to renewable energy vital for electric vehicle transition, says Minister Patel
Mike Mabasa, CEO of National Association of Automobile Manufacturers of South Africa at a media briefing in Pretoria on 4 December on SA’s electric vehicles roadmap after the Cabinet’s approval of the White Paper on Electric Vehicles. (Photo: Julia Evans)
Julia Evans
By Julia Evans
4 Dec 2023
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South Africa’s long-awaited Electric Vehicles White Paper was released on Monday, with Minister Ebrahim Patel emphasising that the value of SA’s electric vehicle market will be realised only if our national energy mix seriously accelerates our renewable energy capacity.

The Electric Vehicles White Paper, which was finally released on Monday and provides the long-term strategy for SA to transition to electric vehicles, makes the argument for a strong shift to more renewable energy, Trade, Industry and Competition Minister Ebrahim Patel said. 

“The grid has to become greener, not only for purposes of general climate change and to ensure a wider source of energy, but also because the value of the domestic market transitioning to electric vehicles will only demonstrate itself if the charging infrastructure can pull energy that is a lot more renewable than currently is the case,” Patel said at a media briefing on the Electric Vehicles (EVs) roadmap in Pretoria on Monday.

The EVs White Paper, which was approved by the Cabinet last week, aims to ensure South Africa becomes part of the global shift from internal combustion engine vehicles (ICEVs) to new-technology vehicles (which include battery electric vehicles and hybrids).

SA’s transport sector is the second biggest polluter after the power industry — accounting for 13% of the country’s CO2 emissions, with road transport accounting for 91.2% of these transport emissions.

In addition, SA’s automotive manufacturing industry is seriously at risk if the country does not transition. The National Association of Automobile Manufacturers of South Africa (Naamsa) reported that three out of every four vehicles exported were destined for the EU and the UK — which have set bans on the sale of new ICEVs from 2035.

https://www.dailymaverick.co.za/article/2023-12-04-better-late-than-never-dtic-finally-releases-electric-vehicle-white-paper/

Last year, the automotive industry contributed 4.9% to SA’s GDP (2.9% manufacturing and 2% retail), comprising 16.5% of the country’s total trade GDP.

“We’ve got to make this transition for climate change purposes. But also for industrial policy purposes,” Patel said during the briefing on Monday.

“This has been a successful contributor to South Africa’s GDP and manufacturing output and employment, and we want it to have a sustainable future in South Africa.”

How would SA transition to EVs when it can barely keep the lights on?


Patel said that the pace of SA’s transport transition would be influenced by several factors, including the fact that the country was battling with an energy shortage (he said SA would need to “avoid a sharp rise in energy demand on the grid from electric vehicles while the grid capacity is being rebuilt”), its energy mix was dominated by coal (meaning charging an EV wouldn’t be as green as it is in other countries), and it was still in the early stages of rolling out charging infrastructure.

As a result, the EVs White Paper argues that the transition to EVs is dependent on the national energy mix shifting to renewable energy.

“​​If our grid remains largely coal-based, the climate change value to domestic consumers will be lower,” Patel said. “So we are backing a green dash to try to get greater levels of renewable energy on the national grid.”

Phase 1 — building production capability


South Africa doesn’t manufacture EVs locally — this not only means buying one in SA would be expensive (as it would be imported), but the local automotive manufacturing industry (which serves some 500,000 jobs) is seriously at risk — 66% of SA’s light vehicle production is exported overseas, with most of those cars going to countries that are planning on banning ICEVs in the near future.

The first phase of the White Paper focuses on building production capability for electric vehicles.

“We don’t want to be relegated to being only an ICEV producer,” Patel said, warning that if the transition to electric vehicles was poorly managed, SA would have to import EVs, and because it is reliant on exports, by 2030 SA would have a declining asset base.

Does the grid have the capacity to support EVs?


MJ Booysen, an engineering professor at Stellenbosch University whose research and projects focus on electrifying the transport sector, says, “The answer is … it’s a negative number.”

Read more in Daily Maverick: SA’s first electric taxi is ‘a stepping stone’ for lagging EV industry

However, there are private companies that provide off-the-grid charging stations.

As of mid-2023, South Africa had about 350 public EV charging stations, and many companies plan to expand. 

Patel said that while off-the-grid charging was part of the solution and should be encouraged, “We see it still being useful for relatively early adopters, and at a relatively modest scale. If you really want to move significantly, you’re going to have to integrate it into a stable infrastructure that can take a relatively high load factor.”

Patel emphasised that this meant dealing with grid constraints, and while this White Paper is not SA’s Integrated Resource Plan (which lays out the future of the country’s energy mix), it “makes the argument for a strong shift to more renewable energy”.

Mike Mabasa, the CEO of Naamsa, said many original equipment manufacturers were looking at technology that recharged the battery as the vehicle moved. Some EVs have replaceable batteries, “So you drive into a charging station and instead of waiting for two hours to have the battery charged, you have it swapped for another.”

electric vehicle transition mabasa Mike Mabasa, CEO of National Association of Automobile Manufacturers of South Africa at a media briefing in Pretoria on 4 December on SA’s electric vehicles roadmap after the Cabinet’s approval of the White Paper on Electric Vehicles. (Photo: Julia Evans)


Phase 2 — stimulating demand for EVs


Phase 2 of the EVs White Paper deals with stimulating the demand for EVs.

Mabasa said, “We are very pleased to note that the White Paper takes into account stimulation for demand in Phase 2 … because we recognise the fact that the government is obviously managing a number of competing — both social and also economic — challenges.”

SA has only about 2,300 EVs among some two million passenger vehicles, which is a far cry from the rest of the world, with 14% of all cars sold worldwide in 2022 (amounting to 10 million) being electric. 

Dr Norman Lamprecht, the executive manager of trade, research and exports for Naamsa, has told Daily Maverick that one of the inhibitors is the price differential between a battery electric vehicle and an ICEV is around 52%, with no demand side-support in place to address this.

“In many other countries in the world the governments provide an incentive such as cash grants or tax benefits to reduce the price gap in order to stimulate sales of EVs,” Lamprecht said. 

The lack of policy incentives from the government has been a big reason for SA losing the EV race and is one of the reasons this White Paper (which was meant to come out in 2021) is such a big deal. 

Patel said they expected the price differential to come down in the next eight or so years, adding, “It may be quicker. Technology always surprises everybody.”

The cost-benefit assumption of the just transition


Electrifying SA’s transport sector will contribute to the country’s global decarbonisation goals.

“The world does need to make this change to a greener future. But it’s not as simple as it sounds to say, ‘Well, we’ll have a just transition, so there’ll be no losers,’” Patel acknowledged.

“What do you do with the more than 100,000 service station attendants and mechanics? Because we don’t control the technological development and it may be then everybody ultimately ends up charging the cars at home. 

“You’ve got to be able to navigate with a lot of thought and that’s really what the White Paper does — and that’s why it’s taken a bit of time to get all of those things on the table to balance them carefully.” DM

https://www.youtube.com/watch?v=REeWvTRUpMk

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