Israel's Electricity Authority Awards Discounted Power Mostly to Commercial Providers, Limiting Household Access
The Israel Electricity Authority announced the winners of its "Availability Certificates" tender, offering discounted electricity to private electricity suppliers. However, only 5% of the discounted power will be allocated to a single household supplier, Cellcom Energy, while other private suppliers, including the largest, Bezeq Energy, received no allocation. This outcome is expected to hinder private suppliers' expansion and their ability to continue offering 6-7% discounts to consumers, with industry insiders calling the tender a failure.
The largest winner was OPC, a power producer that secured 200 megawatts out of the 500 megawatts offered, followed by Dalia (100 MW), Adltek (80 MW), Inova (55 MW), and Mekorot (40 MW). Mekorot, Israel's national water company and the country's largest electricity consumer, will use its discounted electricity solely for itself. Cellcom Energy, the only household supplier to win, was awarded 25 MW. The tender closed at a price of 10.2 agorot per kilowatt-hour, cheaper than usual but higher than the previous tender's 9.3 agorot.
Currently, private suppliers can only purchase discounted electricity from solar and storage producers or from the national grid operator Noga at uniform prices. The Electricity Authority explained that a free market allowing gas-powered plants to sell discounted electricity to private suppliers will only begin in 2027, after interim regulations are introduced. Until then, private suppliers, except Cellcom, will struggle to grow.
The tender was originally planned to include at least four rounds, but the Electricity Authority limited it to two, provoking industry anger. An additional incentive offered a one-agora discount for suppliers who attract customers from the default supplier, the Israel Electric Corporation, but this is unlikely to be sufficient without trading among commercial and household suppliers.
The Electricity Authority emphasized that the current tender is a temporary measure to bridge the gap between high demand for discounted electricity and regulatory restrictions. The transition to a market model where power plants guarantee discounted electricity to private suppliers is expected only with the next generation of power stations, whose regulations are still pending. Meanwhile, the development of discounted private electricity supply to the public faces delays due to these interim arrangements.
