BNC#6 Jan Oberholzer – In-depth Eskom insights from the former COO

Former Eskom COO Jan Oberholzer delved into the intricacies of Eskom’s challenges and potential solutions during a dynamic Q&A session at the BNC#6 conference in Hermanus. From regional energy strategies to financial hurdles and personal reflections on leadership, Oberholzer’s insights shed light on the complex landscape of South Africa’s energy sector and the ongoing efforts to navigate its complexities.

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Summary of the Question and Answer session with former Eskom COO Jan Oberholzer at BNC#6 in Hermanus

The Q&A session with former Eskom COO Jan Oberholzer at the BNC#6 conference in Hermanus was a deep dive into the challenges facing Eskom, South Africa’s national power utility, and the potential solutions to address these issues.

Oberholzer began by discussing the importance of regional cooperation in finding solutions for Eskom’s challenges. He highlighted issues such as drought in Rwanda and contract limitations in Mozambique, which impact the availability of power resources. However, he also pointed out opportunities in regions like St. Bézé and Congo, where abundant gas and water resources could be leveraged for energy production.

Addressing concerns about load shedding, Oberholzer expressed scepticism about it becoming a thing of the past anytime soon. He emphasized the need for realistic expectations and ongoing efforts to stabilize the power supply.

Read more: BNC#6: David Ansara – State-proofing your assets from a failing government

The conversation then shifted to Oberholzer’s departure from Eskom. He shared insights into his decision-making process, recounting a meeting with the President where he initially declined to stay on but eventually agreed to focus on specific projects like Kusile and Koeberg. Oberholzer also discussed the challenges he faced, including multiple forensic investigations that he deemed unsubstantiated.

Reflecting on his purpose in life, Oberholzer shared a touching story from his early days at Eskom, where he witnessed the joy of electrifying a village for the first time. This experience, he said, reinforced his commitment to making a positive impact on people’s lives, a sentiment that continues to drive him.

Throughout the session, Oberholzer emphasized the need for Eskom to address key issues such as finance, asset management, capacity, and corruption. He called for a balanced approach to remuneration policies, focusing on both profitability and the longevity of equipment.

The audience engaged with questions about Eskom’s regional strategies, financial sustainability, and the role of leadership in navigating the utility’s challenges. Oberholzer reiterated the importance of experienced individuals stepping up to contribute positively.

Overall, the Q&A session provided valuable insights into Eskom’s complex landscape, highlighting the interconnectedness of regional energy dynamics, financial constraints, and operational challenges. Oberholzer’s candour and experience shone through, offering a nuanced perspective on the path forward for Eskom and the broader energy sector in South Africa.

Read more: BNC#6: Anthea Jeffery – Revealing the history behind SA’s socialist trajectory

Extended transcript of the Q&A discussion session with Jan Oberholzer at BNC#6 in Hermanus ___STEADY_PAYWALL___


Bronwyn Nielsen (Question): It was a very challenging environment, but I’m not going to steal your thunder. You know, Jan, everybody in this room wants to know a little bit about your journey at Eskom, a journey that came to an end in July ‘23, and you are now the chairperson of a renewable energy play, Mulilo. Mulilo, Mulilo. So let’s just go back, if I can take you perhaps to a darker place [his time at Eskom].


Jan Oberholzer: My marriage? Thanks Bronwyn. And really thank you for the opportunity.

I was very blessed. My dad used to work 25 years for Eskom. So I grew up in an Eskom house, so to speak it wasn’t an Eskom house, but I grew up in an Eskom house. I was an Eskom bursar, Koos is sitting there, we were at the university together. Then I did my national service. So I studied in Winnereg, did national service, and I think Hoki is here as well. We did national service together.

And then I started with Eskom for 26 years. So my first life in Eskom was 26 years. I was very blessed. I worked throughout the value chain, distribution, transmission generation, and then a bit of research, testing, development. And when I left Eskom after the 26 years, I was responsible for the group capital building.

Madhupi and Kusili, and Ngula. So, and then also perhaps I can mention that I was also blessed to have been given the responsibility for electrification in the mid 90s. So, because of some reasons, one of it I couldn’t accept the decisions that were made in 2008, which Eskim is still paying for now in terms of Kusili and Madhupi.

I decided to leave Eskom. So for 10 years I was on my own, being a contractor, working in Africa, etc. But I think the important thing is I learned what life is all about outside Eskom and how important is a bottom line and how important people are. Then I got the call from the Eskom board in 2018, to come back.

as a group chief operating officer, and Lindie will tell you it took me about five weeks to make up my mind. And what they told me during the interview, what I can expect in Eskom, but it wasn’t even a fifth, even a tenth of what I experienced when I walked back. It was a different company. I grew up in Eskom, worked 26 years for it. My dad worked 25 and me 26. We walked back into an organization that is foreign.

completely foreign. Significant challenges really. So, but so weird, you know, we tried our best to see how we can ensure energy security in the country. And, you know, I suppose we will talk about my view of the challenges in Eskom, but because of the challenges,

significant challenges in the organization, it was difficult to make a quick stride forward. And then obviously when we were there, myself, let’s talk about myself – it was very quickly for me to identify that the big issue that we have, is no maintenance had been done. Now if you have an old car, that I started using the example of an old car, you’ve got an old car, 15, 20 years old.

15-20 years old.

And the only thing you do is you put in fuel, you pump the tires, you put in water and the radiator, and when you get in the car the foot is on the accelerator. Alright, so you get whatever you can out of it.

And then the best of all is, let’s assume, and please, I have nothing against any carmaker. If you drive a Mercedes or whatever, Datsun, whatever the case may be, if that’s what you have and somehow it breaks down and you need to take it in, you don’t take it to a Mercedes dealership. You take it to anybody. When you have somebody working at it, and thanks to black economic empowerment policies.

Nothing wrong with the policy, but the outcome nobody understood. And then we have somebody working in your car, it’s not a qualified Mercedes mechanic, it’s anybody. And we put in spare parts, not the spare parts, it’s any part. And you know from which country I actually mean. So that’s what I found when I got back. Significant, significant challenges. And if you take a power station, it’s designed.

to run for about 50 years. And if you take Madhuphi and Kusile out of the equation, on average, the power plant, the 12 power plant, coal-fired power plant that is left is in excess of 44 years old, abused, not maintained.

So this is what I found when I got back into Eskom. And then, jeez, I walk in there, and the only thing on my table is voluntary separation packages. I said, but I don’t understand it. No, we’ve got to transform. So I said, I understand transformation, and I fully support transformation. But again, if you don’t understand the successful outcome of transformation, and there’s nothing wrong with that, and it’s about numbers, you’ve lost it. So these were the things that I found when I arrived there.


Question: Was it broken by the time you got in the second time?


Jan Oberholzer: Absolutely. Absolutely. You know, one of the five issues that I’ve identified in Eskom that is significant is criminality and corruption. It is, it was, and I believe it still is in freefall. People, lots of people, and outside and within Eskom,

It is not about 61 million people of the country. It’s not about their lives and the economy of the country. It’s about their own pockets. So the rule of law was a significant challenge that we had to deal with. And you know, if you stand on a water pipe and my wife can bear me out, they will do whatever they can to get you off that pipe. That’s why I had nine forensic investigations in the time that I was there, which they couldn’t find anything.

So it was a difficult situation. Nine fore?nsic investigations, did you fear for your life? I sound like Annika Larsson. Yeah, she phoned me after André’s interview and wanted my story as well. But somehow I had since.

A lot of people ask me if you read Andre’s book. I said no, and I’m dead serious. Why do I need to read something that I was part of? The day that Andre was poisoned, he phoned me. He said, Jan, where are you? I don’t know where I was. I wasn’t at the office and he said, I think I’ve been poisoned. So I said, about what? What do you think it is? He said, I can only think it’s coffee. 

because I got nausea, etc., after I had coffee. And even myself had a lot of coffee.

But to come back to your point… No, wait! He phoned you and he said he’d been poisoned by the coffee. He believed so. And then what? He said to me, be very, very careful, because he was aware of all the death threats and other threats that I have received, you know, in my tenure at Eskom. One of it specifically was, was bad, you know, our son is autistic, he’s…

31 years old, turning nearly 32 now. The guy that gave the threat said, you’ve got a autistic son, this is how old he is, this is what he drives, this is the time he leaves your house. All these sort of things, your middle son does this, yes, he does this. So we strongly recommend you stop investigating. So these things that happened, did I worry about my life?

No, I was very blessed. I had three personal security friends that looked after me. Wherever I went, whoever I had to go to, they were making sure that everything was fine. So I never felt threatened at all. And then, obviously, I’m a Christian and I believe in God. And I’ve given it to him. He’s

put me back in Eskom to make a difference. And I believe that he will look after my safety and see that I do what I need to do.


Question: What was the final nail in the coffin for you? Given what you just said, that you felt it was a calling, that you could make a difference, but you made that call, whether it was your involvement in Medupi, Kusile.


Jan Oberholzer: Bronwyn, in November ‘22, when Kyle Cowan couldn’t keep his mouth shut, he was 24 and he had to say, I’m going to go on pension. But he didn’t say, you know, in Eskom when you turn 65, you have to go on pension. So it became a big issue. And it also landed on the table of President Ramaphosa. So he invited me to his house one Sunday morning. A couple of months after that, just before I left.

We had a long discussion, even myself, for about two hours, just the two of us in his house. And at the end, you know, after I had spoken for quite some time, he said, Jan, I want you to stay. Did he not say, I want you to run Eskom? No. During the discussion, I made it clear I’d be interested. He did ask me who I believe should run Eskom, which I gave him my views. I’m not going to tell you.


Question: Jan, you cannot throw us breadcrumbs like that and not go any further. Who do you believe should run Eskom?


Jan Oberholzer: That’s someone that has – let’s come back to Andre De Ruyter, and I’ll answer your question by saying what I’m saying now. Andre De Ruyter was in my view, we became very good friends and business colleagues. He was an exceptional businessman, make no mistake. The shortcoming he had, he was a lawyer. I’m not saying lawyers are shortcoming, but from a technical point of view,

He had some challenges, although he did fairly well in my view. I believe he started getting a team together. That if we were left alone to do what we believe was what we had to do, I believe we would have moved positively forward.

So whoever you put in there, and you know Dan Morokane that started now, I don’t know him from a bar of soap. In the 10 years that I left Eskom, between my first and second life in Eskom, he was there so I don’t know him. But I wish him, really I wish him well. But I just trust that he will be supported and not dictated to, what to do. So Mthetung Nyati is sitting as chairman.


Question: Do you know Mthetung?

Jan Oberholzer: I’ve met him when he was appointed.

in the last board meeting, yes. They’re going to have to work very closely together. Absolutely. I have respect for Mthetu, but I can recall when the new board was appointed, they had their own views, which I respect, and it was, let’s quickly fix this. It is now going for two years. It is not an easy situation. It’s a very complex business. It’s a business that…

20, 22 years ago when it was voted by its peers in the world as the best utility in the world, to get back to that I believe is not possible for various reasons. So I just trust that

Sanity will prevail, because in my view, the Eskom of the is past gone. As a matter of fact, when I was reappointed in Eskom, in July 18, after two, three months, a board asked me at the time to come back and say, can we fix Eskom? And I started off by saying, you know, what you told me and what I’ve experienced is chalk and cheese. And I said to him, you cannot fix Eskom. You’ve got to split it. You’ve got to cut it apart.

And Andre came in and he did quite well. It was my view that you have to take the generation transmission and distribution, and make it separate units, each one with its own focus. Because when I arrived back, Eskom was a black hole. Finances, procurement, everything, nobody was accountable. I see, actually I heard now.

that this VGBSE report now is actually highlighting that as well, which was true. What a power station manager did, nobody knows when I write. To give you an example, I write back and my induction back, my second life in Eskom was, Pakumani Khadebe is going overseas to go and get money. And I’m acting a week after I rejoined that 10 years ago.

Industrial action and loadshedding. So that was my induction back in Eskom.

The issues, what came to my table in that first two, three weeks, just to demonstrate that there was no accountability at a power station level, for the power station manager.

I got feedback that at one of the power stations, the people were just running in and out. Security systems didn’t work. The turnstiles didn’t work. I picked up the phone. I phoned the power station managers. Why is it not working? No, first I said, what is happening? The turnstile is not working. I said, I know. That’s why I’m phoning you. I said, why is it not working? He said, sir, please talk to security at Megawatt Park.

Another occasion, no fuel oil, no fuel oil is like blitz. So you’re at the power station, you take coal, you grind it, you make it a powder, and then you have fuel oil like blitz, you get it going. You heat up the pipes in the water in the boiler. No fuel oil. What? I found the power station. Why have you no fuel oil? He said, sir, please phone procurement at Megawatt Park. This is what I found.

So these deep, deep operational inefficiencies. Absolutely. But it was planned. Make no mistake, it was planned that they could loot. That’s what it was all about. So we’ve built this session as the timeline it will take to fix Eskom, the capital it will take to fix Eskom. I know from boardrooms in South Africa, everybody is latching onto what you are saying in terms of…

the generation transmission and the distribution and breaking up the organization. Is this what is actually going to happen? I want to talk into -bI want to go into solution mode here. Sure. It depends on the owners. The owner of the business, the owner of the business appoints a board, please manage this company on my behalf. Board then appoints management, please we’re not there daily. Please manage that on a daily basis.

But the strings are still pulled by the owner of the business, obviously with inputs. Now, my view is, yes, we need to move towards getting separate legal entities as soon as possible. And I believe what is important to understand is that Eskom generation, the generation of the past, will not be the generation of the future. It will be one of the generating companies in the future. It will only be one of them.

And it’s one of my failures in my tenure. And I really feel bad about it. I thought about it a long time, you know, how could I have done it differently? But I couldn’t get it into a power station manager’s head that you actually running a massive business. Your input cost is there. If you do anything or nothing, it is there. You’ve got to pay people, you’ve got to pay fuel, etc., etc. And if your unit is not

producing, there’s no flipping money coming in. And if there’s no money coming in, you’re running a loss. I couldn’t get it over that you’re actually running a business. So I believe this is a way we should be going in South Africa as soon as possible. And this is why I’ve decided to make a positive contribution as best as I can, still within the South Africa energy sector, by

generating additional electrons and to contribute positively to the lives of the 61 million people of the country. So I believe that the transmission company will remain as is for the time being. That’s the way I see it because they need to understand what is the supply after demand, number one, and where is the supply going to come from. So I think that is fine. It needs to be a single unit.

But it needs to be run by professionals and a professional board. Then as I said, generation in my view… When you say it needs to be run by professionals and a professional board, are you inferring that the current structures are not going to yield the appropriate results? I believe we need to relook what we are doing and how we’re doing it. We also need to make sure that we have competent and skilled people.

that will take us forward. We have started on the process and the [incoherent], which was Minister Gordhan at the time, supported the fact that we become three legal entities with three separate legal independent boards. So I believe we’ve started the transition. I just believe that we need to continue doing so.


Question: How long is a piece of string? It is a difficult question.


Jan Oberholzer: You know, I was listening to Ian Cameron just now before lunch and he was talking about purpose and talk about hope.

I believe that the lack of policy in this sector has put us on the back foot. So we are reacting on whatever is happening. It’s a reaction from whatever needs to happen. And I believe that policy needs to take a significant focus that we get on the front foot and that we don’t react.

… to things that is actually costing us an arm and a leg. So to answer your question, is a difficult one, Bronwyn, how long is it gonna take? It is definitely not going to take building a nuclear power station. I’ve heard this on the news and I couldn’t believe what I’m hearing. We’re gonna build a nuclear power station that’s gonna get us out of loadshedding. I don’t know if you heard it as well. No, I don’t think we’ve got 10 years to wait because that’s how long it takes to build a power station, a nuclear power station.

So I believe we just need to understand what the demand in the country is and the profile. So it’s one thing to say this, we need 10 gigawatts more, whatever the case may be. It’s also to understand what is the profile that is required. We also need to understand what is the technology that is coming? How is that gonna change the demand and the profile? And only when you have a good understanding of that, then to go back and say, what do we need? So,

If you ask me, it is going to take some more time. And I don’t want to interrupt you there. Okay. And this is why I believe Bronwyn…

We need urgently to look at a regional solution.

… beyond the borders of South Africa as well. If you look what is happening in Europe, those countries are all connected. And I believe that that’s where we need to go. Because we have a South African power pool, a transmission system that is integrated to some extent, a lot of work needs to happen. But…

This will help if we have a regional view that we will also then be able as a region to assist ourselves in whichever country to deal with the energy security challenge that we have. Do we have the leadership within the region to make this work any more than we have the…

So why don’t we utilize it by means of thumb storage, by means of hydro. So I believe- Country is not Zambia. No, it’s not. But so-

And I unfortunately believe it’s going to take time, you know, and also, although I am assisting now in a renewable company, is that the solution? No, it’s not the only solution. And this is why I cannot emphasize enough, this demand picture, to understand it, because it doesn’t mean sun and wind alone.

You need a hybrid solution to deal with the challenges that you have and to ensure that that demand and the profile that you need is addressed. I am amazed that we haven’t moved forward with pump storage in the country, with gas in the country.

… I mean, it could actually be that Eskom becomes irrelevant in the overall ecosystem. Not irrelevant, it’ll always be there, but the private sector will prevail. And that will make the transformation that we need. Bronwyn, I come back what I said earlier, I agree with that. Eskom will definitely not be irrelevant in time to come. They will have their role to play. And they have a significant role to play. They have

It will be part of the solution, not in the solution. … So it’s something else that we’re bringing in now. And then also another challenge that we have, although these bit windows are now getting momentum, flipping so late…

And these are my words. You can go and look it up. I said, Mr. President, we urgently need four to 6,000 megawatts of capacity. The day before yesterday, those are my words, more than four years ago. I said, if not, stage six will be part of our lives going forward.

… So there is a morale challenge. And there was a time I can remember in my first life in Eskom, when you walked in public and you had an Eskom badge, geez, you were proud. Everybody was talking about. Now you don’t even put a blazer on like that anymore. And this is why whenever I go around, even now, I’m asking people, don’t crucify Eskom.

… But yes, I believe that Eskom has a morale challenge. Go ahead, sir. Can I ask you a question now, but I only want you to finish the answer right at the end. That shows I’ve got the microphone in my hand.

…I’ve been pushing now for the last two years, even the last year that I was in Eskom, you asked me a question I haven’t answered you. What was enough?

… And perhaps not seeing the big picture. My brother farms on the Fish River Irrigation scheme. They’re having a terrible trouble with unpredictable loadshedding and their center pivots.

If you want to you can give me the information and I’ll make sure. Yeah, please do.”


Question: Go ahead, David. Another mic there. So, Jan, Medupi and Kusile really should be doing the heavy lifting for us right now. And I know in your tenure there, there were design issues that you were addressing, going through units one at a time to sort out the design issues and bring them up to speed. These are two crucial projects for us currently. They should be doing the heavy lifting for the next 20 years. When you left, did you manage to sort out the…


Jan Oberholzer: I believe that we have solved the design issues. If you look specifically at Medupi, we have installed all the design modifications on all six units. We’ve also done it at Kusile.

Now, if you look at the performance, with the exception of unit one, which we had an issue with the generator due to inexperience, the five units at Medupi are performing exceptionally well. The energy availability is at 80%, so it’s going well. However, there’s no fluidized desulphurization unit taking the sulfur out of the air.

But it has to be installed, as it’s a World Bank requirement. If you look at Kusile, there you have this plant installed, which created significant challenges. This is why we had that duct failure in units one, two, and three, where we couldn’t use the smoke stack anymore, leading us to build three new temporary stacks.

If you look at unit four, we’ve asked the regional equipment supplier to run it for a period of six to eight months. The energy availability was 80%. It comes back to the point I believe that Eskom needs to invest more in its people, the most important asset of the organization.

So those units, in my view, sorting out the FGD operation, if we can do that and implement it at Medupi, those two big units will perform extremely well. But it depends on who’s going to operate and maintain them.


Question: Excellent insight. Right, Jan, your view on a Gwede’s 20 billion love affair with the top, the cop power ships, is that another arms deal? And does Eskimo have to be on its knees before you can get it signed?


Jan Oberholzer: The President asked me the same question, and I’ll give you the same answer. My view is where the country finds itself now, we need to look at it. It’s much cheaper, even though it’s more expensive, than the load shedding that we have in the country and what it’s doing to the lives of the people. However, what I said, please, let’s not sign 20-year deals. Let’s sign a three- or five-year deal and have some understanding on what we’re going to pay for the input, which is the gas.

So I believe that is definitely something that we need to look at to get through the challenge that we have. However, let’s at least have plans. What do we do in the meantime? I did wait.


Question: Go ahead. Yeah. With regards to wheeling and specifically, if you consider the fact that prior generation is probably a key part of the solution going forward and then using Eskom’s transmission capability to get it to clients elsewhere. We all know that wheeling takes place on the Eskom-to-Eskom level, where clients are on the Eskom network instead of municipal level, facing challenges on the municipal level.


Jan Oberholzer: To get wheeling properly working in the country, we need to ensure we have sufficient electrical networks in place. That is critical. And if we have that in place, our policymakers need to start getting, in my view, a more positive way of saying it, and getting these tariffs implemented. So I believe wheeling is something of the future.

Another option is an IPP will then go directly to a customer, but in order to do that and not having access to its own electrical network, they will have to wheel it via Eskom, provided there’s sufficient capacity, or you can have a trader that is an in between. So it is something that needs to take place going forward.

Because this is something that’s come to stay. Trading of electricity is coming. It’s perhaps not here yet, but it’s coming. There’s no doubt. And the wheeling of electricity on whatever network is available is a given.

But the challenge that we in South Africa have, we do not have sufficient electrical networks throughout the country to get the power generated wherever in South Africa to the load centers where it’s needed.


Question: If the Eskom bakkie stops off there, think about this. Now, you and your spouse are sitting there every night enjoying the view, and the Eskom knocks at your door the next day asking to build a transmission line. Are you going to sign?


Jan Oberholzer: I don’t think so. There are significant challenges.


Question: A very insightful discussion you’ve had. My big takeaway is that Eskom has got a cultural problem, no doubt. Is it not the remuneration policies that were actually put in a few decades ago where there was a maximization of return on assets? Just a question.


Jan Oberholzer: I believe it may have been one of the contributing factors, absolutely. I want to come back to the people. Eskom has got, and I’ll never stop saying it, some exceptional people.

I believe that Eskom, what they’re doing extremely well, is that they’re remunerating people extremely well. Some decisions were made in the past that the country is paying dearly for.

There is no doubt about it. But I don’t believe that some of the decisions made in the past were perhaps focusing on improving the lives of 61 million people in the country.


Question: Yes, go ahead. Jan, thank you. You’ve spoken a lot about the complexity, the technical aspects, and maintenance. But in the end, there’s also a big funding gap. What is the view of the Eskom executive on the board policy that this cannot continue?


Jan Oberholzer: If you have a business and you owe people 400 billion rand, then you have significant challenges. And when you pair that with your sometimes limping generation plant, you still produce electrons through your network and provide it to customers, some of whom don’t pay for it. Then it becomes challenging.

There are five big issues in Eskom, in my view. The second one is finance, exactly what you’re talking about. We still need to pump to get the economy to pump. So we need to assess wherever we can. So it’s a difficult one.

I was vocal about it and suggested that perhaps the government could take away Eskom’s financial obligations for three years because Eskom is making a 30 billion round EBITDA operating profit. So at least then there’s money that you can use to maintain your plant.

The Minister of Finance made it clear, however, that if I do this, you will not borrow another cent. So Eskom has money to invest, but now I see they’re using it all on diesel.


Question: Jan, I want to revisit your earlier point about seeking solutions regionally. However, considering the challenges in Rwokana due to drought and Mozambique’s contract ending, it seems South Africa has limited leeway regionally.


Jan Oberholzer: I agree with your assessment. However, there are other areas like Zambezi with running gas plants that we can tap into. Mozambique also has abundant gas resources. We should focus on connecting transmission lines to South African power pools and exploring options like leveraging Congo’s water resources.

I believe there’s untapped potential in the region that we need to pay attention to and leverage. People with experience should step up to contribute.


Question: Why did you leave Eskom?


Jan Oberholzer: After a meeting with the president, he asked me to stay, but I had decided it was time for me to go. Despite agreeing to stay temporarily and focus on specific projects, additional forensic investigations without substance led me to resign formally.

My purpose in life is to make a positive contribution to others. This is why I continue to seek ways to give back and make a difference, leveraging my experience and blessings.


Bronwyn Nielsen: Jan Oberholzer, thank you for your insights and time.

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