Private Power Plant Is Linked to Israel's Grid

Launch came nine years after the company won a government tender for the project.

For the first time ever, a private power plant has begun selling electricity to the state-owned Israel Electric Corporation.

TheMarker has learned that the OPC power station at Mishor Rotem in the Negev began generating electricity on Saturday at its full 440-megawatt capacity without any malfunction.

The launch came nine years after the company won a government tender for the project, marking the first time a conventional power plant developed to sell power in competition with IEC has begun operations and been attached to the national grid.

Two months ago OPC promised Energy and Water Resources Minister Silvan Shalom that, barring any unforeseen delays, the facility would go into commercial operation by July 1 to alleviate potential power shortages during the summer.

IEC's capacity has been crippled by a malfunction at a key plant last spring that won't be corrected until after the peak summer season.

The NIS 2 billion plant, 80% owned by The Israel Corporation's energy subsidiary IC Power and 20% by the French company Veolia, suffered multiple setbacks over the three years it took to build it. Last year, Egypt canceled its contract to sell Israel natural gas, which OPC was counting on to supply half its fuel needs. Four months ago IEC employees prevented the plant from being connected to the national electricity grid.

The power purchase agreement between OPC, the IEC and the government, under which the IEC committed to buying electricity for 20 years, was signed in November 2009.

When it reaches full production, OPC will sell 25% of its power to IEC at a preset price, and 75% to private customers at a 7% to 9% discount to IEC rates. It customers include Azrieli Group, Intel, the desalinization plant at Hadera, and Oil Refineries Ltd.

Eliahu Hershkovitz