Israel Electricity Authority Proposes New Rules for Data Centers
Translated & summarized from Globes by baba
Israel's Electricity Authority has proposed new regulations for data centers, capping individual facilities at 200 MW and requiring substantial financial guarantees of up to 400 million shekels per project. The policy aims to manage the immense demand from AI infrastructure, which previously led to a halt in new applications due to requests exceeding three times the national generation capacity. Data centers will be allowed to generate their own renewable energy but will not receive connection priority. Public comments are being accepted until November 17.
The story in 5 lines · by baba
- Data centers in Israel will be capped at 200 MW, with large projects needing to comply.
- Developers must provide financial guarantees of up to 400 million shekels per project.
- New data center applications totaled 27 GW, far exceeding Israel's 8.5 GW capacity.
- Self-generation of renewable energy is permitted but offers no connection priority.
- Public comments on the proposed regulations are due by November 17.
Israel's Electricity Authority has released a full public hearing document detailing new policies for data center development, aiming to manage the surge in demand driven by the AI revolution. The proposed regulations, which will guide data center operations in Israel until 2035, include significant financial guarantees and limitations on individual facility size. The largest data centers will be capped at 200 megawatts (MW), a measure intended to address technical limitations of the electricity grid and prevent any single consumer from exceeding current demand levels. Even large projects, such as one previously planned by Mega Or in Hadera with over 1,000 MW capacity, would need to adhere to this 200 MW ceiling, with splitting large facilities or placing them too close together being disallowed.
To ensure developers commit to their plans, data center operators will be required to provide substantial financial guarantees. Initially, an application to build a data center will require a guarantee of 500,000 shekels per MW, potentially reaching up to 100 million shekels. Upon receiving all necessary approvals, this guarantee will increase to 2 million shekels per MW, totaling up to 400 million shekels, to ensure adherence to development schedules. The authority has also set a deadline of June 1, 2028, for all data center applications to be submitted.
Under the proposed policy, data centers will be permitted to establish their own renewable energy generation and storage facilities, up to their full connection capacity. However, this self-generation will not grant them priority in the queue for electricity grid connections. The authority is considering additional prioritization criteria, such as geographic location (favoring the periphery), flexibility during peak seasons, and production efficiency, but no final decisions have been made.
The surge in data center applications, totaling 27 gigawatts, three times Israel's total electricity generation capacity, prompted the Electricity Authority to halt new connection requests in July. The new policy aims to regulate this growth, with a total cap of 1,000 MW for new data centers established by 2035, plus an additional 300 MW reserved as a "reserve" for facilities with solely local clients. The public hearing for these proposed regulations is open until November 17, with a final decision expected from the next government after the upcoming elections.
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