South Africa’s renewable energy transition should focus first on building demand, offtake structures and grid integration before prioritising local manufacturing, which will follow.
This point was raised by MAHLE Group Vice President of Corporate Research and Advanced Engineering Marco Warth at MAHLE South Africa’s Media Tech Day in Johannesburg last week.
South Africa should focus first on creating the conditions for renewable energy to be used at scale – including viable offtake, grid integration and end-use demand – before trying to compete directly with established manufacturing hubs such as China. Once demand is established, localisation and manufacturing opportunities are more likely to become commercially viable, he said.
“The opportunity for South Africa is not to chase after them but to have a system approach – to make it work from the offtake and scale it from there,” Warth said.
Establishing demand for renewable energy and ensuring that generated electricity can be effectively used are critical steps in creating a sustainable energy economy, he added, pointing to China’s rapid expansion of renewable energy manufacturing as an example of the risk of building supply faster than the systems needed to absorb demand.
Once demand and market structures are in place, localisation and manufacturing opportunities are more likely to follow, Warth said.
Africa also faces a different set of challenges from those encountered in China and Europe. “Europe’s energy transition debates often centre on public acceptance of infrastructure while African markets are more focused on cost competitiveness, efficiency and expanding access to reliable energy supply.” Warth said.
