Image By: Eskom
The original article can be found here. Selected subheadings were inserted by Turnaround Talk.
Former Eskom chief operations officer Jan Oberholzer believes renewables will play a significant role in South Africa’s future energy production – but he hasn’t written off coal plants completely.
“We need to go green,” he told News24, following his appointment as non-executive chairperson of Mulilo Energy. The South African company is majority-owned by the Copenhagen Infrastructure Partnership (CIP), one of the largest investors in renewable energy projects in the world.
Oberholzer joins Mulilo after his abrupt departure from the state-owned power utility in July.
Surprising move
It came as a surprise, as the company had announced in June that Oberholzer signed a two-year contract that would see him manage some of Eskom’s most urgent and complex projects – including repairs to Kusile and the rejuvenation of Koeberg – just a month prior.
Oberholzer, who was appointed as Eskom’s first COO in 2018, worked for the utility for around 30 years.
His new chapter at Mulilo follows a bruising few years at Eskom, during which he faced multiple investigations following a series of allegations. All the investigations, including one by the Special Investigating Unit, cleared Oberholzer, who together with André de Ruyter pushed a corruption clean-up drive that faced significant pushback.
Renewable focus
In a striking turn of events, Oberholzer, until recently responsible for an ailing and unreliable fleet of coal power plants, will now chair a large renewable energy company.
But he has not given up hope on Eskom’s coal giants.
“I am in full support of Eskom currently looking at their coal-fired power plants […] those that are earmarked for decommissioning […] but to look at, considering the challenge we have currently, which of those units it makes sense to extend the life of them,” he said.
“However, if the decision is made to extend their lives, I trust everything will be taken into consideration, also the issue of environmental compliance […] if it makes sense, and considering where the country is, to keep them.”
Eskom’s fleet of 15 coal-fired power stations makes South Africa one of the worst contributors to global pollution.
Decommissioning inevitability
It is inevitable that some of the units will have to be decommissioned, which will put even more pressure on South Africa’s ailing electricity supply – which has resulted in record levels of load shedding.
“In December 2019, when we had Stage 6 load shedding for the first time, I told the president and the ministers that we need additional capacity, and it hasn’t changed. We need additional capacity as soon as possible,” he said.
I believe that is where I would like to play a part and make a contribution outside Eskom. Eskom knows what they need to do, they’ve got their recovery plans and they will carry on and do exactly what they must do. But we need now other players to make sure that there is additional capacity in the country.
What does Mulilo do?
Founded in 2008, Mulilo is based in Cape Town and has large solar and wind projects, mostly in the Northern Cape. CIP took an 87% stake in Mulilo earlier this year.
Danish-headquartered CIP is the world’s largest dedicated fund manager focused on greenfield renewable energy investments. It manages €25 billion on behalf of 150 global institutional investors, with 11 funds that own large infrastructure projects in Europe, Asia, Australia and the US.
Oberholzer said, “These are some of the best people to make a positive contribution in creating new capacity.
Image By: Steve Buissinne via Pixabay
Mulilo has 420MW of solar PV projects and 240MW of wind. It also has a hybrid solar and battery storage project, a hybrid gas and battery storage project, and a solar PV project in development.
“I believe there is realisation that we need a hybrid solution in terms of capacity, and renewables will play a significant role,” said Oberholzer. “I am looking forward to the new IRP [Independent Resource Plan] – we need a hybrid solution that will be solar, it will be wind, it will be BESS [Battery Energy Storage Systems] …. I believe [it could also be] small modular [nuclear] reactors, it would be pumped storage, biomass, it will be microgrids, whatever the case may be. Because of where we are, we have to go green.
“But coal will play a very important transitional role,” Oberholzer said.
Dual purpose
South Africa is moving toward green energy sources not only to add capacity to the grid – but also out of commercial necessity, as export tariffs on products produced with “dirty” energy sources are likely to wound the ailing economy even more. There has been widespread criticism that successive ANC governments have moved too slowly in terms of encouraging and making more renewable projects possible, even as they oversaw a steady decline in Eskom’s performance.
Oberholzer says it’s critical that Government must understand what power demand is going to be in the next 10, 20 and 50 years and what technology and innovations will be available to meet the demand.
“It will also be based on what you can put in place at a specific time, and to put in more baseload capacity – [which may mean] combined cycle gas turbines, that will take time. You want to put in pumped storage, or small modular reactors or whatever – it’s all going to take time.
“I believe that renewables are not the only solution – but it will be a significant part of that – depending on what the demand is.”
Oberholzer has discussed with CIP that Mulilo needs to position itself to be ready to get involved in the transmission side of the energy business.
A lack of grid access has been cited as one of the single biggest deterrents to getting more green power projects online on a large scale, and Oberholzer, whose true passion lies in the “wire side of the business”, believes he is well-placed to help the country overcome that problem.
