Israel's Electricity Demand to Surge 85% by 2040
Translated & summarized from Israel Hayom by baba
Israel's electricity consumption is predicted to increase by 85% to 150.7 billion kWh by 2040, driven by data centers, AI, electric vehicles, and population growth. A new forecast highlights a significant gap between projected demand and current development plans for the electricity grid. Private electricity producers are calling for clear policy and the removal of barriers to investment to meet the rising demand and ensure reliable power.
The story in 6 lines · by baba
- Israel's electricity consumption is projected to rise 85% to 150.7 billion kWh by 2040.
- Data center electricity use is expected to increase more than twentyfold by 2040.
- AI applications will drive 71% of data center electricity demand by 2030.
- Electric vehicles are forecast to account for 12% of electricity consumption by 2040.
- Peak winter electricity demand may exceed current forecasts by 3.4 gigawatts in 2040.
- Private electricity producers urge policy changes to meet rising demand.
Israel's electricity consumption is projected to rise by approximately 85% between 2025 and 2040, increasing from about 81.4 billion kWh to 150.7 billion kWh, according to a new forecast. This represents an average annual growth rate of 4.2% over 15 years. The forecast, prepared by Chen Herzog, Chief Economist and Partner at BDO, for the Forum of Private Electricity Producers, identifies several key drivers for this surge: the expansion of data centers and artificial intelligence applications, the transition to electric transportation, population growth, and the increasing demands of the water and desalination sector.
Data centers are expected to be a significant contributor, with their electricity consumption projected to skyrocket from 0.8 billion kWh in 2025 to 18 billion kWh by 2040, a more than twentyfold increase. By 2030, AI applications are anticipated to account for about 71% of the electricity demand from these facilities. In terms of power capacity, data centers are expected to require 2.1 gigawatts by 2030 and 4.1 gigawatts by 2040.
The shift to electric vehicles will also substantially increase electricity usage. The transportation sector's share of electricity consumption is expected to grow from around 2% currently to 12% by 2040, consuming 17.1 billion kWh. The Forum estimates that by 2035, over half of private vehicles in Israel will be electric or plug-in hybrids, with projections also including 70% of buses and 20% of trucks becoming electric by 2040.
Core electricity demand from households, industry, and commerce is also forecast to rise, driven by population growth, from 61.8 billion kWh in 2025 to 84.3 billion kWh in 2040. The water and desalination sector's consumption is expected to reach 7.8 billion kWh annually by 2040.
The report highlights a growing discrepancy between projected peak winter demand and the forecasts used by Noga, the company managing the electricity system. By 2030, peak winter demand is expected to exceed Noga's development plan forecast by 1.2 gigawatts, a gap projected to widen to 3.4 gigawatts by 2040, when peak winter demand is anticipated to reach 27.6 gigawatts. The Forum of Private Electricity Producers, which represents about 60% of the country's electricity generation, is urging immediate action to adapt the electricity grid planning to meet these rising demands and ensure reliable power for technology companies.
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