Electricity rates in Israel to rise 4.9% in 2022

Power lines  photo: Eyal Izhar

The main reason for the increase in tariffs is the rise in coal prices on world markets.

After two years of prices falls, electricity rates in Israel are set to rise in 2022 due to the rise in coal prices. The Public Utilities Authority (Electricity) has published a public hearing about a 4.9% rise in the tariff in 2022 from NIS 0.43.3 per kilowatt hour to NIS 0.45.68.

Electricity rates in Israel are set as part of a closed grid in which revenue from the rates must cover all expenditure in producing and distributing the electricity. As part of the electricity reform, which began in 2018, three power stations have been sold to private companies and this was one of the factors contributing to the fall in prices over the past two years.

According to the government plan, Israel's power stations will stop using coal by 2025. But at present 23% of Israel's electricity is produced from coal and the full switch has not come soon enough to save Israeli consumers from the rising price of coal on world markets.

The Public Utilities Authority (Electricity) wrote, "The major factor in the rise in the tariff was the price of coal in the world, which has risen by more than 100% over the past year. The influence of the rise in coal prices has been moderated by the fall in the value of the dollar but overall there has been about an 11% rise in costs for calculating the tariff. The rise in the Consumer Price Index (CPI) combined with the increase in the amount of renewable energy on the grid have also brought about an additional rise on recognized costs."

This has been offset by the sale of the East Hagit power station to Shikun & Binui and Edeltech for NIS 1.6 billion as well as the strengthening of the shekel.

As part of the public hearing, people are asked to lodge their objections and remarks with the Public Utilities Authority (Electricity) about the planned price rise. If the hearing is unable to change the Authority's plans, the new electricity rates will come into effect on February 1, 2022.

Published by Globes, Israel business news - en.globes.co.il - on December 20, 2021.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2021.

Power lines  photo: Eyal Izhar
Power lines photo: Eyal Izhar
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