LANCE DICKERSON: Why e-sport matters for renewables

Formula E’s track reveal for the inaugural Cape Town E-Prix is symbolic of another matter preoccupying progressive elements in the country — the push towards renewable energy in the face of strong resistance from an establishment entrenched in coal.

While our president has made positive commitments, this race has yet to hit the home straight. Some would argue we’re still in the warm-up lap. To be fair, Cape Town has made headlines a few times in its forward-looking drive to prioritise renewable energy and lessen its dependence on Eskom’s national grid.

Why does the Cape Town E-Prix matter? The sight of marvels of engineering hurtling through the streets of Cape Town, powered only by batteries and electric motors, will inspire a generation of activists who know that innovation and excitement need not reside in the old paradigm that is choking the environment.

It matters most because South Africans woke up to load-shedding again in the second week of March, a stark reminder that our energy grid is one or two coal-generator breakdowns away from reneging on its duty to supply our economy with the energy it needs to survive and grow. When the power generation units break down, Eskom starts load-shedding to replenish the emergency generation reserves.

These reserves run on open gas turbines powered by diesel. In other words, fossil fuel backs up a grid dominated by fossil fuel. There are dozens of estimates from consultancies and national bodies around the world about the amount of diesel it takes to produce power. One need not get caught up in specifics and the generation type to appreciate that it takes huge amounts of diesel to power SA’s emergency open gas turbines.

Over and above the obvious environmental concerns of burning fossil fuels, South Africans were shocked recently with an estimate that the petrol and diesel price could surge to R40 a litre in the short term. Of course, these estimates have been rubbished by some economists, who say it’s not based on reality, and they console us by saying price increases would be less severe. Any increase is bad news.

We should all be concerned that the national utility is relying on diesel, the cost of which is at the mercy of the war in Ukraine and other geopolitical factors, and that any increase in input costs is either going to be forced onto us or add even more pressure to Eskom’s viability, which is already one of the country’s biggest risks. This use of diesel assumes load-shedding won’t end anytime soon. And it won’t.

As Eskom CFO Calib Cassim so succinctly described recently, the running costs over time are simply going to become unsustainable. Beyond the costs, running generators aren’t ideal because of the noise and environmental pollution. A big event celebrating clean energy, like the E-prix, will do wonders to spread this message more broadly.

Cape Town Mayor Geordin Hill-Lewis spoke highly of the jobs that will be created by the event, the infrastructure improvements and the knock-on effect for businesses in the region. However, that’s only one side of the story. The other is that everyone with a vested interest in the renewable energy sector will probably descend on the city and use the event to promote the idea that energy does not need to come from fossil fuels.

The city itself is likely to double down on its own publicity drive around investment in renewable energy. The cynics among us would see this as opportunistic. The realists among us will see this as long overdue. We must live in a world that pushes the idea of renewable energy and carbon-friendly technologies to businesses and individuals alike. It is the future and we are lagging behind in SA.

However, possibly a lesser-known but arguably the most exciting side conversation related to the E-Prix, at least from Revov’s perspective, is the discussion about electric vehicle (EV) batteries. Energy storage solutions that rely on the EV battery market are set to soar in popularity, driven in part by their performance but also by likely price increases in the new lithium storage battery market because of lithium shortages. Here’s the context: lithium iron phosphate batteries are superior to lead-acid batteries in every metric, from safety to performance. Batteries are used in UPS systems for power back up, or in renewable energy installations to provide off-grid or hybrid power solutions.

Ordinarily, the lithium supply chain pressures — driven by the surge in EVs — would spell bad news in terms of affordability. However, second life (2nd LiFe) batteries, which are repurposed from the cells in replaced EV batteries, have stepped up to fill the void. Every EV’s battery needs to be replaced when the weight no longer justifies the performance. Ordinarily these batteries would end up in landfills. However, the individual cells, when repurposed correctly and built into batteries with intelligent management systems, still have enough life and performance in them to provide stationary storage for as long first life batteries, with the added benefit of performance specifications unique to the EV sector, such as the capacity to perform in harsh conditions.

As we watch the racing cars — engineering marvels in their own right — race through the streets of Cape Town, we will be witnessing the leading edge of the EV market — the catwalk models of 2nd LiFe donor cells. The E-Prix in Cape Town symbolises our country’s race to convert our dependence on fossil fuels to a dependence on technology that has already paid it’s carbon price in the EV market, providing a compelling alternative to provide storage for SA’s booming renewable energy sector.

• Dickerson is MD of energy storage company Revov.