(photo credit: Courtesy)
In what the National Infrastructures Ministry hopes is a growing trend, the Israel Electric Corporation (IEC) signed a power-purchase agreement with Dorad Energy on Thursday. It is the largest such agreement signed thus far.
The power station, to be completed in 2013 near Ashkelon, will produce
800 megawatts from natural gas. The EMG company, which imports natural
gas from Egypt, will supply the gas.
After a protracted negotiation, the agreement was signed Thursday. It
emerged after the ministry and other government bodies set the
regulations for how the power station is to operate. Dorad Energy first
received a license to build a power plant in 2003.
While most of the electricity will be sold to the grid run by the IEC,
Dorad Energy also has private clients including the Defense Ministry and
Mekorot (national water company), among others.
“This is an important road sign,” National Infrastructures Minister Uzi
Landau said in a statement. “The entry of private power producers into
the market is undergoing serious labor pains. We want to see private
producers constructing plant after plant. We will continue to remove all
obstacles to ensure their entry into the market.
“The success of Dorad, which will produce 800 megawatts from natural
gas, is the success of the National Infrastructures Ministry, to ensure
reliable delivery of electricity, as clean as possible, wherever
“The power plant will enlarge the reserve and is an important addition
to the market’s capacity, which suffers from a serious shortage.”
“Dorad, as a trailblazer in the field of private electricity production
via licenses, is the first to sign an agreement of this size with the
IEC,” Dorad chairman Amos Yaron said. “This is a key agreement not just
for Dorad, which will decide the standards and implementation of
regulations, but will be a stepping stone and foundation for the energy
market, where more private producers are expected to emerge.”
“Dorad starts out today after a long and complicated period of effort
and investment,” Dorad CEO Doron Grupper said. “We thank the government
for the support and belief in us that the signing of the agreement with
the IEC symbolizes. We are pleased that Dorad’s capacity represents a
significant generator capacity for the energy market, especially during
this critical time when there is a shortage of power-generation capacity
The National Infrastructures Ministry has been pushing to get private
power producers into the industry to increase available megawatts.
During heat waves, the IEC goes to maximum capacity and activates its
contracts with backup private producers to redirect their electricity to
the grid, but it still worries that demand will exceed capacity. Having
regular private producers will increase overall capacity.
The private producers the ministry would like to encourage are in
addition to renewable- energy producers. Dorad Energy will run its power
station on natural gas. Natural gas is considerably cleaner than fuel
oil or coal, but it is still a polluting fossil fuel and not as clean as
solar or wind energy.
The ministry is considering producing much of Israel’s electricity from
natural gas, although energy security dictates diversification to
prevent outages. If the natural-gas pipeline were to be damaged, the
power stations would immediately switch off. Coal, on the other hand,
can be stockpiled.
The goal for 2020 is to have 50 percent of electricity produced from
coal, 40% from natural gas and 10% from renewables. It is unclear how
Landau’s plan to make Project D, two 620 MW generators, a dual-fuel
(coal and gas) power plant will affect that.
The government has been pushing for more privatization and a general
reform of the energy market for some time but with limited success.
Former National Infrastructures minister Binyamin Ben-Eliezer and his
director-general, Hezi Kugler, spent a lot of time negotiating with the
IEC to little avail.
Dorad Energy is owned by the Eilat-Ashkelon Pipeline Company (37.5%), U.
Dori Engineering Works Corp. Ltd. (18.75%), Edeltech (18.75%) and
Turkish company Zorlu (25%). Financing is being provided by Bank
Hapoalim and Clal Financing.
The power station will be built on land owned by the Eilat-Ashkelon
Pipeline Company in Ashkelon.