Israel Sets Limits on New Data Center Power Connections
Translated & summarized from NEWSru Israel by baba
Israel's Electricity Authority has limited new data centers to 200 megawatts each and a total grid connection of 1,300 megawatts. Further rules on distribution and self-generation incentives will follow public hearings. The move aims to manage demand after 27 gigawatts were requested, far exceeding Israel's generation capacity. Developers must also post significant financial guarantees to prevent speculation.
The story in 5 lines · by baba
- New Israeli data centers are limited to 200 megawatts each, with total new connections capped at 1,300 megawatts.
- Developers must pay a 2 million shekel per megawatt guarantee to ensure construction timelines.
- 300 megawatts of the total capacity will be for domestic use, the rest for export, likely to AI firms.
- The Electricity Authority froze applications in July due to 27 gigawatts of demand exceeding Israel's generation capacity.
- Additional criteria on regional distribution and self-generation incentives will be decided after public hearings.
Israel's Electricity Authority has decided to cap the power capacity for individual new data centers at 200 megawatts and the total connection capacity for all new data centers to the national grid at 1,300 megawatts. Further criteria, including geographical distribution between central Israel and the periphery, and incentives for facilities that generate their own electricity, will be determined after public hearings. The first construction permits for new data centers are not expected for several months.
Of the total 1,300 megawatts allocated, 300 megawatts will be reserved exclusively for domestic consumption. The remaining capacity can be used for exporting computing resources, primarily to artificial intelligence companies abroad. The 200-megawatt limit per facility will prevent extremely large projects, such as those planned by Mega Or, from proceeding as originally envisioned.
Developers will also be required to provide a guarantee of 2 million shekels per megawatt to ensure construction timelines are met. For a maximum-capacity data center, this guarantee amounts to 400 million shekels on top of construction costs. This measure aims to deter speculators who reserve grid capacity without genuine intentions to build.
Additional proposed criteria to be discussed in public hearings include a division of capacity between the center of the country, which has higher electricity consumption than production, and the periphery, where the opposite is true. Incentives for data centers that also build their own power generation facilities, such as solar panels and energy storage systems, will also be considered.
In July, the Electricity Authority froze all applications for new data center connections due to an overwhelming number of requests for giant facilities. The total capacity requested was 27 gigawatts, three times Israel's total generating capacity. Under the previous policy, data centers with a combined capacity exceeding one gigawatt had already been approved on a first-come, first-served basis.
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