There is a real danger of power blackouts this summer, Energy and Water Resources Minister Uzi Landau warned yesterday at a press conference, as his ministry launched a controversial project to tackle the anticipated electricity shortages that includes buying new turbines.
While his ministry cannot do much about the shortage of natural gas to fuel the power plants or about delays in building new generating stations, it is not standing idly by, Landau said.
The ministry will be orderingthe Israel Electric Corporation, which has a monopoly over power generation in Israel, to buy eight mobile, 25-megawatt generators at $25 million apiece, for a total cost of $200 million. They will provide backup and emergency power.
Landau said the combination of increased demand and diminished production capacity is expected to reduce reserve generating capacity to just 3%-4% this summer.
The generators' combined 200-megawatt generating capacity will add 1.5% to Israel's total generating capacity.
The proposed emergency generators are diesel-fueled and can be hauled by track to the areas affected by planned blackouts. The siting of the generators will be coordinated with the Environmental Protection Ministry.
The IEC will purchase and operate the generators, without issuing a tender that could have reduced costs. The ministry said a competitive tender process would have taken too long. The company is effectively being rewarded with an additional 200 megawatts of generating capacity after the government blocked the construction of new power plants. We can only assume that electricity rates will be raised to cover the cost of the new generators.
The main reason for the shortage of natural gas to run the generating plants is the repeated breakdowns in Egyptian gas supplies. The natural gas pipeline from Egypt to Israel, through Sinai, was sabotaged 12 times in as many months, cutting off supplies each time.
In addition, production from the Mary-B offshore natural gas field, operated by the Tethys Sea partnership, has also declined significantly due to technical problems and faster-than-expected depletion of its reserves. The ministry has ordered production cuts in order to guarantee supply for the peak-use summer period.
Smaller satellite fields near Mary-B are expected to go on-line by August. The even smaller Noa field should start providing gas in June.
Many IEC generating units that were designed to run on natural gas are being forced to use the much more expensive, polluting and inefficient diesel fuel due to the natural gas shortages. The switch from diesel to gas and back again has also caused technical problems and led to increased maintenance operations.
Electricity demand is forecast to peak this summer at 12,370 megawatts, compared to a maximum generating capacity of only 12,880 megawatts. This leaves the country with only abut a 4% electricity reserve. The OECD recommends a 18% to 25% reserve, which translates into a need for 14,600-15,500 megawatts of additional production capacity.
"The ministry has budgeted more than NIS 300 million for energy efficiency. In 2008, when the cabinet decided on [the program], zero shekels were allocated. Now there are some 200 megawatts of renewable energy installed. three years ago there were zero," Landau said.
"Private electricity producers are continuing to build [power] stations, energy efficiency campaigns are underway and solar [power] licenses continue to be signed," he added. The ministry has also taken a number of steps to encourage consumers to reduce usage by offering customers peak-rate pricing plans, where they pay less for using electricity during times of the day when demand is lower.
Minister rejects criticism
Landau rejected criticism of his ministry and said the delay in approving planned new power plants in Ashkelon and Alon Tavor is behind the looming electricity shortage. He also criticized Environmental Protection Minister Gilad Erdan for refusing to allow power plants to increase their use of heavy fuel oil. This fuel source is much more polluting than others. Landau railed against "irresponsible bodies that delayed projects that could have increased [electricity] production."
Landau was referring to environmental advocacy organizations, which oppose the construction of another coal-fired plant in Ashkelon, and the Finance Ministry, which in the past determined that additional generating plants and a terminal to handle gas from offshore fields in the north were superfluous.
The Environmental Protection Ministry said in response: "For many years the Energy and Water Resources Ministry has not advanced overall planning for the electricity sector."
The IEC four years ago introduced an emergency plan to increase electricity production, at a planned cost of NIS 5.5 billion. This plan, which was also supposed to prevent blackouts of the type being predicted for the coming summer, involved building power plants between 2008 and 2013 that would have added a combined 1,050 megawatts of generating capacity.
For the first time, most of the funding was to come directly from customers' electricity bills.
Landau is scheduled to accompany Prime Minister Benjamin Netanyahu on a visit to Cyprus that starts tomorrow. One item on Landau's agenda is advancing the project to build an underwater electricity cable to connect Israel and Cyprus. The cable will later be extended to connect to the European electric grid. Landau said he will also promote joint natural gas projects.
