Just 10 days before Israel’s first-ever tender for solar power providers to connect with the power grid based on tariffs they set, Israel Electric Corporation says it cannot guarantee it will be able to take all the electricity that will be on offer.
The surprise news could jeopardize years of planning by companies planning to supply solar power to IEC’s monopoly grid, as well as the government’s goal of sourcing 10% of the country’s electricity supply on renewable energy by 2020.
The tender, for a combined 1,000 megawatts, is the first in which solar providers will bid using tariffs they themselves set, rather than agreeing on predetermined rates. Officials expect the new system will lead to lower rates and accelerate the usage of solar power.
However, the IEC has thrown a wrench into the works after a newly approved ceiling was approved by the Electricity Authority recently that sets a ceiling on maximum usage of the power network’s transformers at 60%.
On Sunday, the authority played down the problem, saying the new ceiling wouldn’t have a “major impact” on the availability of the network in general to accept power from private providers. “We are confident that the resources available can easily accommodate the requirement of the first tender,” it said.
But IEC took a different line and said it wasn’t ready to take on the solar power that would be generated.
“For these new arrangements, the network requires changes and major adjustments. These investments are beyond the current investments the IEC is making,” the utility said in a statement, adding that no approvals had been given for it to take on big amounts of renewable power.
Sources said that scores of transformers were likely to be found operating at top capacity or close to it, and therefore unavailable for solar power providers. Moreover, most of them are probably located in Israel’s south where the solar fields are located.
Among those likely to lose out from the ceiling is Kibbutz Sufa, where the last five years have been spent planning and building a 120-dunam solar farm using photovoltaic technology. However, two weeks ago they were informed that the closest IEC transformer couldn’t take the power that would be generated.
At least three other solar providers in the south have been told that they wouldn’t be able to send their power to the grid, even though they had received approvals.
The 60% ceiling is a guideline widely used in developed countries around the world. Nevertheless, industry sources expressed surprise at the timing of the decision: IEC and regulators had not acted on the standard until now, just before the authority is due to approve the utility’s capital spending program.
Industry sources, who asked not to be named, said the sudden decision highlights the failure of IEC to invest in the grid, and that it would pose a wider problem for conventional private power plants hooking up to the network, not just solar plants. IEC management has given priority to paying down the utility’s dangerously high levels of debt, at the cost of capital spending.
“Management can’t touch the pay of employees, it can’t reduce the price it is paying for natural gas – so if it wants to repay debt faster, where else can it get the money?” said a source close the company.
Industry sources said IEC is gladly advertising the fact that its is cutting back critical investment, in the hope it will enlist the support of private power companies in supporting a rise in electricity rates.
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