Israel Debates Energy Future Amidst Data Center Boom and Subsea Cable Project
Translated & summarized from Bizportal by baba
Israel is developing regulations for a surge in data center energy demands, with proposals limiting new server farms to 200 megawatts each. PowerGen's CEO criticized the limitations, advocating for co-location with power plants. Meanwhile, the subsea Great Sea Interconnector project linking Israel to Europe is progressing. PowerGen is also acquiring Shikun & Binui Energy, pending regulatory approval, and is considering future access to capital markets.
The story in 5 lines · by baba
- Israel is regulating data center energy connections, limiting new server farms to 200 megawatts each.
- PowerGen CEO Dan Klenberger called the proposed regulations "not correct, neither engineerinly nor economically."
- The Great Sea Interconnector project aims to link Israel's electricity grid to Cyprus, Greece, and Europe.
- PowerGen is acquiring Shikun & Binui Energy for approximately 4.45 billion shekels.
- PowerGen has an aggregate valuation of around 8 billion shekels and is considering capital markets access.
Israel is navigating a complex energy landscape, balancing the rapid growth of data centers with ambitious infrastructure projects like the Great Sea Interconnector. The Ministry of Energy and Infrastructure is working with the Israel Electric Corporation to establish regulations for connecting new server farms to the grid, which have requested a cumulative capacity of approximately 27,000 megawatts. Janet Shalom, Deputy Director General for Policy, Planning and Strategy at the ministry, emphasized the need to foster new technologies while ensuring energy security and stable electricity prices. A proposed framework limits each server farm to 200 megawatts, aiming for a balance that allows for growth without overwhelming the national grid, potentially accounting for nearly 20% of demand.
However, the proposed regulations face criticism from industry players. Dan Klenberger, CEO of PowerGen, a subsidiary of Generation Capital, argued that the current framework is "not correct, neither engineerinly nor economically." He advocates for allowing server farms to be built adjacent to existing power plants, including conventional ones, to save on transmission costs and suggested developing these facilities in the periphery. PowerGen, a significant Israeli energy player, is interested in this emerging market, viewing data centers as a form of energy infrastructure.
Simultaneously, progress is being made on the Great Sea Interconnector, a subsea cable project designed to link Israel's electricity grid with Cyprus and Greece, and subsequently Europe. Shalom highlighted the project's strategic importance, enabling Israel to become a regional energy power and a bridge between East and West. Despite geopolitical challenges and funding questions, she expressed confidence in its feasibility, noting progress on surveys for the Greece-Cyprus segment.
PowerGen is also involved in a significant acquisition, agreeing to purchase Shikun & Binui Energy for approximately 4.45 billion shekels. This move aims to bolster its renewable energy portfolio and potentially lower electricity prices for households. The deal, however, awaits regulatory approval, with the Israel Electric Corporation reportedly opposing it due to concerns about market concentration. Klenberger stated that PowerGen is in constructive dialogue with regulators and is exploring options to finalize the deal. Looking ahead, PowerGen, with a current aggregate valuation of around 8 billion shekels, is considering future access to capital markets.
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