Israel's $5.6 Billion Power Project Faces Grid Limitations
Translated & summarized from Maariv by baba
Israel's new Sorek power station, a 5.6 billion shekel energy project, is set to begin operations in November 2029 with 850 megawatts of capacity. However, initial payments will be limited to 670 megawatts due to grid constraints. The project secured significant financing and a competitive bid, with construction proceeding despite infrastructure challenges and global equipment demand.
The story in 6 lines · by baba
- The Sorek power station project, costing up to 5.6 billion shekels, is underway in Israel.
- The facility is expected to start operations in November 2029 with 850 megawatts capacity.
- Initial payments will be limited to 670 megawatts due to transmission grid limitations.
- Financing for the project totals approximately 4.8 billion shekels from several banks.
- Adaletec and Menora Mivtachim won the tender with a competitive tariff in December 2024.
- A 15-year natural gas supply agreement worth $1.4 billion has been secured.
A significant energy project in Israel, estimated to cost between 5 and 5.6 billion shekels, is moving forward with the construction of the Sorek power station. The facility is slated to begin operations in November 2029, aiming to add approximately 850 megawatts to Israel's electricity generation capacity. However, limitations within the national transmission grid will restrict initial payments to only 670 megawatts of available capacity, falling short of the plant's full potential output.
The project's financing package totals around 4.8 billion shekels, led by Mizrahi Tefahot and Discount banks, with participation from International Bank, Migdal, Meitav, and Menora Mivtachim. The concession, which includes building, operating, and maintaining the station for nearly 25 years post-completion, is currently held by Adaletec and Menora Mivtachim. Keystone Power is expected to join the venture through a loan convertible to a 40% equity stake, pending regulatory approval.
Adaletec and Menora secured the tender in December 2024, offering a competitive availability tariff of 3.18 agorot per available kilowatt, about 25% lower than the next bid. Despite the 850-megawatt generation capacity, the initial operational phase will be impacted by Israel Electric Corporation's infrastructure constraints, meaning availability payments will be calculated based on the reduced 670-megawatt capacity.
To ensure timely construction, the gas turbine and production systems were ordered from Siemens Energy over a year ago, even before project financing was finalized, due to high global demand. The power station will utilize a combined cycle technology, which enhances efficiency and reduces fuel consumption by reusing heat generated during electricity production. A 15-year natural gas supply agreement, valued at approximately $1.4 billion, has also been secured.
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