Will Egypt Unrest Affect Israel's Electric Supply?

An interview with Electric Corporation head Amos Lasker.

The lack of political stability in Egypt, together with Saturday's fire in the pipeline transporting natural gas to Israel and Jordan, has focused Israeli attention on its natural gas sources. While the current disruption appears to be temporary, those in charge of Israel's energy economy must prepare now for the possibility of more prolonged interruptions, whether due to problems operating the pipeline or a reversal in Egypt's commitment to supplying natural gas to Israel.

This would have far-reaching consequences, since Egypt supplies more than 40 percent of the natural gas used by Israel Electric Corporation. There is an important environmental aspect to this as well, since natural gas is less polluting than other fuels used to generate electricity.

lasker - Tomer Neuberg - February 7 2011
Tomer Neuberg

IEC CEO Amos Lasker is an important link in Israel's energy supply chain.

Amos Lasker, are you worried about your ability to provide electricity to Israeli consumers?

"We are already prepared to supply electricity to consumers by various means. We'll increase the coal-burning efficacy of the generating stations and the flow rate from the Tethys Sea offshore natural gas field. If necessary, we can run power stations on diesel and other fuels."

What if there are extended problems with the Egyptian gas supply before Tamar and other recent offshore discoveries come on line?

"We are taking organized administrative measures to prepare for that possibility. The most problematic period will be the peak-demand months of July and August. One option, of course, is to resume the full use of diesel fuel at our plants. Another option - a stopgap until we become an oil emirate - is a facility to supply liquid gas. Gas cannot be moved from every place, so the solution is to convert it into liquid, to transport it to another country and then convert it back to a gas. It could be a complex facility that takes years to build, but it is possible to set up a facility on a ship which requires less time to organize and could provide about 15 percent of Israel natural gas needs."

Are there other plans to diversify the fuel sources for power plants?

"The cabinet resolution to increase the amount of electricity produced from renewable energy sources must be implemented; so far this has been going slowly. There is also justification for going ahead with another coal-based power station in Ashkelon, as a dual-fuel plant that can also run on natural gas. If such a a station is built within five years it could generate 1300 megawatts, about one-tenth of demand. We must also keep in mind the joint Palestinian-British gas drill off the Gaza coast; the possibility of using this source must also be examined."

Which IEC plants run on natural gas today, and what is the significance of this in terms of air quality?

"With the exception of the coal-powered stations in Ashkelon and Hadera, in effect all the facilities use natural gas. This includes the Eshkol station in Ashdod, the Reading station in Tel Aviv and the station at Alon Tavor, in the Galilee. Other stations will soon be connected to the natural gas infrastructure. In Haifa too, there will be a connection to a station that operates on gas at the end of next month. Of course, this has led to a significant improvement in air quality, and if we have to return to using diesel fuel this would have a negative impact. We are also working to improve the coal-powered plants and to install in them pollution-reducing methods that comply with European Union demands."

How long could you operate the power stations with diesel fuel in the event of a prolonged shortage of natural gas, and what effect would this have on consumers?

"The power plants that are not coal-based are designed to be switched within a matter of hours from using natural gas to diesel fuel. It's similar to a car that uses natural gas and gasoline, or gasoline and electricity. At the same time, preparations must be made in order to receive and transport large quantities of diesel fuel. We are taking steps, together with the government company Petroleum & Energy Infrastructures, to remove the obstacles to transporting diesel fuel. As for consumers, first of all there must be electricity. I don't think there'll be a significant effect on electricity rates to the extent we're talking about a short-term shortage of gas. If we return to a situation where we are using large quantities of diesel fuel over an extended period, this will affect electricity rates since costs 10 times more than natural gas. But it is still too early to estimate the effects."

Looking ahead 10 or 20 years, based on your development plans what will be the sources of electricity production in Israel, and what steps are you taking to reduce electricity consumption?

"A significant part of electricity production will be based on natural gas, while coal will constitute a relatively low percentage. We hope the use of renewable energies will increase, and we have a plan to build a nuclear power plant in the Negev. We are committed to the more efficient use of electricity, in particular through building a "smart network." This is a project we'll begin during the coming decade that will enable the monitoring of electricity consumption and reduce energy waste. It will allow consumers to control electricity consumption in their homes remotely, and we believe it will be the main means toward efficiency."