Privatise older Eskom assets – Jan Oberholzer

Former Eskom COO Jan Oberholzer said the private sector should take over some of the power utility’s assets to improve electricity generation.

Speaking at Biznews’ tenth birthday conference, Oberholzer said Eskom’s monopoly on power generation is ending.

“The future Eskom generation will not be the sole provider of electrons to meet the demand, as it was in the past,” said Oberholzer.

He said Eskom would become only one of the companies supplying electricity instead of the sole supplier.

Many old power stations will reach the end of life, which creates an ideal opportunity to put them on the market for independent power producers to bid on.

These older power stations have all the necessary infrastructure to provide electricity, including substations and grid connections.

Whether independent power producers plan to refurbish them or use alternative energy sources does not matter much.

“When we shut down a power station due to age, I’d rather see the private sector take over these assets and generate electricity,” Oberholzer said.

However, that does not mean Eskom should limit its investment in its current fleet or additional generation capacity.

“Eskom must also fix what they have and invest in making the coal-fired fleet perform as well as possible,” he said.

The former Eskom COO envisages focusing on five or six power stations to ensure reliable and predictable energy availability.

Another area in which Oberholzer wants more investment is electricity storage – batteries and pumped storage.

He explained that Eskom’s system operator needs pumped storage to ensure regulating and instantaneous reserves.

“When a problem arises on the network, pumped storage offers immediate power to support integrity,” he said.

He added that battery storage is needed to store wind or solar power when these sources have excess capacity.

How to fix Eskom

Oberholzer told delegates at the Biznews event that there are five big issues that Eskom should address to create a healthy power utility.

• Human capital – Employees are the most valuable asset for Eskom. The organisation must ensure staff are qualified, experienced, and happy.
• Finance – There must be adequate funds for maintenance and upgrades needed at power plants.
• Maintenance – Eskom should ensure proper maintenance to avoid unplanned breakdowns and other problems.
• Additional capacity – Eskom must procure additional capacity to ensure a buffer to take generation units offline for maintenance without implementing more load-shedding.
• Crime and corruption – The power utility has a big problem with crime, corruption, and sabotage, which cause serious issues at Eskom.

“I believe those are the five issues that need to take centre stage. The first one, the human capital, is where we need to focus,” he said.

He added that it is challenging to address corruption and incompetence because the government owns Eskom.

“It’s complex and rests with who owns this business. If you understand that, then you know the challenges.”