Super Power Acquires Paz Gas Energy in First Electricity Market Consolidation

Home electricity supplier Super Power is acquiring competitor Paz Gas Energy, reducing the number of companies in the sector from seven to six. The deal, valued at up to NIS 25 million, sees Super Power, controlled by Supergas Power (itself controlled by Electra) and solar energy producer Enlight, absorb Paz Gas Energy. This acquisition is expected to add approximately NIS 130 million in annual revenue for Super Power, though the electricity supply market remains largely unprofitable or has very low profit margins for its players. This marks the first consolidation in a relatively saturated market, with more expected.

Electricity suppliers in Israel act as intermediaries, connecting renewable energy producers with households, offering consumers discounts of 5-7% or greater during off-peak hours. Currently, around 450,000 households have switched to private electricity suppliers, a move actively encouraged by the Ministry of Energy. However, suppliers struggle to secure sufficient cheap electricity to maintain profitability.

Super Power announced the acquisition on Thursday evening. The initial payment is NIS 15 million, with an additional NIS 8-10 million contingent on customer transfer calculations, bringing the total to NIS 23-25 million. Super Power's revenues were NIS 228 million in the first half of 2026, projecting nearly NIS 500 million annually. The low purchase price reflects Paz Gas Energy's annual losses, mirroring the market trend. Supergas Power reported a negative EBITDA of NIS 1 million in the first half of 2026, an improvement from the previous year.

The market is currently characterized by suppliers focusing on growth and customer acquisition, anticipating future profitability through cheaper electricity procurement. The Israel Electricity Authority currently permits only renewable energy producers to sell electricity to private suppliers. Future regulatory changes may allow conventional power plants to sell to private suppliers as well.

The market is now divided into three large players: Bezeq Energy (Bezeq and PowerGen), Cellcom Energy (Cellcom and Meshek Energy), and Super Power (Electra and Enlight). Three smaller companies, Amisragas Energy, HOT Energy, and Partner Power, may become acquisition targets. Super Power currently offers a 6.5% flat discount to customers.

Lior Weider of "Mif'al Ruvach" commented that the deal solidifies Super Power as an aggressive leader, noting that the small margins necessitate economies of scale and that this consolidation is a natural process of weeding out smaller players. He anticipates further mergers, with financially strong companies acquiring customer portfolios from exiting firms to dominate the private electricity market.