Yuval Steinitz, the Israeli energy minister, has mandated the closure of four old coal-fired power units and their replacement with two new combined-cycle gas power plants. Earlier this year, Steinitz ordered state-run Israel Electric Corp (IEC) to use 15% more gas, replacing an equivalent amount of coal generation.
These guidelines are part of policy measures set to reform IEC, a state monopoly. Once the coal-to-gas switch is implemented, up to three quarters of Israel’s electricity output will be sourced from on natural gas – the rate highest among OECD member states.
The 40-year old coal power units up for closure are part of Orot Rabin, Israel’s biggest power station, located near Hadera, just north of Tel Aviv. Steinitz indicated he hopes the decision will speed up the realisation of the Regulatory Natural Gas Framework since it will create a further demand of 1.5-2 billion cubic metres per year for natural gas in Israel’s domestic market.
However, the ministry’s decision is estimated to take at least five years to implement. Two of the projected CCGT units are still to be designed and built and new sources of natural gas have yet to be developed and come online.
An earlier $2 billion scheme to retrofit the 40-year old coal power units with smoke scrubbers were cancelled, though the units may be called on occasionally by the grid operator to provide backup power.
Levithan gas earmarked for domestic power gen
Israel’s power major Edeltech and its Turkish partner Zorlu Enerji in May signed a $3 billion contract to supply natural gas from the Leviathan field over 18 years to a proposed power plant in Be’er Tuviya. Israel Power Management (IPM) and Triple-M Power Stations will own and operate the 430 MW gas power plant, which will be built on a 6.2 hectares site near the city of Ashdod.
Just weeks before the deal was finally agreed, government approved a revised natural gas development outline with an amended stability clause. The original legal clause would have frozen gas prices and taxation for 10 years, but the revised clause allows future governments to propose changes, if necessary.
The new deal establishes two test points for investments to be made in Leviathan; with the first being the need by the partnership to invest $1 billion dollars by the end of 2017 and the second is that they invest $4 billion by 2019.