Launch of first private power plant stirs electricity competition

OPC-Rotem, is a natural-gas plant in the Negev Desert about a dozen kilometers east of Dimona.

Silvan Shalom 370 (photo credit: Henry Rome)
Silvan Shalom 370
(photo credit: Henry Rome)
The opening of the first privately owned power plant in the country heralds the expansion of private electricity production that will mean lower prices for consumers, Water and Energy Minister Silvan Shalom said Tuesday.
Shalom spoke at the opening ceremony for OPC-Rotem, a natural-gas plant in the Negev Desert about a dozen kilometers east of Dimona. While the 440-megawatt facility came online over the summer, officials held the plant’s formal opening ceremony on Tuesday at the desert facility.
Shalom said with the expansion of private companies, a streamlining of government involvement and the use of natural gas, consumers will see lower bills on common utilities.
“Power generation will become much cheaper,” he told an audience of journalists, diplomats and industry executives.
“Therefore, the rates will go down dramatically in the next few years by dozens of percentage points, and each of you will feel it in your households.”
Shalom said he wants 40 percent of electricity generation to be private.
“You’ll pay less for electricity, less for gas, less for water,” he said, noting how electricity costs impact the distribution of the other commodities.
Shalom praised the coordination between the government owned Israel Electric Corporation and the OPC-Rotem power plant; IEC officials trained their counterparts at OPC-Rotem.
But, he said, “we’re heading toward a huge reform in the electric market. We would like to streamline [the IEC], and streamlining means downsizing employees.”
Shalom spoke under a large, enclosed tent with a convention- center-style sound and projection system adjacent to the power plant. On the ground, the event organizers rolled out fake grass and used brooms to keep out sand, which was kicked up by a light wind outside.
Construction on the power plant, which processes gas piped in from the Mediterranean Sea, started in 2011 and took only 30 months to complete, which was nine months ahead of schedule. But the smooth construction process belied the strenuous process of approval.
Nir Gilad, the president and CEO of the plant’s parent company, Israel Corporation, said efforts began in the Knesset a decade ago.
“I must say, Mr. Minister, that throughout this Via Dolorosa, when people had very little faith and [critics] all urged them to stop, they never stopped believing it is possible to build a [private] power plant in Israel,” he said.
Around 1,000 Negev residents were among the staff hired to build the power plant.
Dov Litvinov, the head of the local regional council, said the construction of a brand new facility is an important step in revitalizing desert communities.
“The Tamar Regional Council, whose residents live in the heart of the most beautiful natural environment in the world… has set a goal to advance projects dealing with clean energy,” he said.
Litvinov said, “The establishment of the power plant here will enable not just clean, environmentally friendly energy, but mainly to encourage the creation of new jobs in the Eastern Negev.”
OPC-Rotem is part of the electricity arm of IC-Power, a subsidiary of the Israel Corporation established in 2007. In total, IC-Power generates more than 4,000 megawatts of power in several countries in Latin America as well as in Israel.
Although OPC-Rotem was the first private power station to come online in Israel, it is now not the only one operating.
Three weeks after the connection of OPC-Rotem in July, several turbines at the Dorad gas power station in Ashkelon were activated. That station is slated to operate at its full, 840- MW capacity by the end of the year. Both OPC-Rotem and Dorad had rushed to connect to the grid this summer at the behest of the IEC, which had feared an otherwise jeopardized power reserve during the year’s hottest months.
By the end of summer in 2015, an even larger independent power station, the 870-MW Dalia Power Energies gas facility in the Shfela region, will also come online and will sell the largest amount of electricity to the IEC.