GE, Siemens to bid for Israel's gas power stations

Jerome Pecresse Photo: PR

GE and Siemens energy chiefs have told "Globes" that they are interested in building power stations to replace Hadera's coal-fired power station.

The decision to close down the Israel Electric Corporation (IEC) (TASE: ELEC.B22) coal-fired power station in Hadera has created international interest in the market for building power stations in Israel, General Electric (GE) Israel CEO Nissim Zvili told "Globes." The plans to build new power stations were the focus of last week's visits to Israel by senior executives in GE and Siemens. The coal-fired units in Hadera, which are to be closed down by 2021, have a 1,400 megawatt capacity, 1,200 additional megawatts are needed to supply the projected increase in demand by 2020, meaning that the potential market in Israel for natural gas-powered electricity is 2,600-3,000 megawatts. "We plan to compete for this market, Zvili promises. He accompanied GE Renewable Energy president and CEO Jerome Pecresse on the latter's visit to Israel.

Pecresse said, "Israel is an important market for renewable energy, with a highly developed capital market in both equity and debt that can finance you energy sector with local resources. I met your capital market people before, when the private power stations were being built; they are smart people who know their work. The environment here is very suitable for entrepreneurship in this field."

There are still no pumped-storage hydroelectric power stations in Israel, but the first one, located in Ma'ale Gilboa, is already in the advanced construction stages. Construction of the $2.2 billion plant is slated for completion in 2017. A pumped-storage hydroelectric power station utilizes differences in height to produce electricity. An "ordinary" gas turbine placed in a huge internal space hewed into rock raises water from a lower storage pool to an upper one. In order to produce electricity, the upper pool is emptied, and the falling water drives a second hydroelectric turbine. In this way, a pumped-storage hydroelectric power station can absorb surplus electricity from the grid and use it to raise the water to the upper storage pool on the one hand, and supply electricity at peak times by emptying the upper storage pool and driving a hydroelectric turbine on the other.

Pumped storage is the main tool available to managers of a closed electrical grid (who cannot transfer surplus power to other grids) for dealing with the challenges of producing electricity from renewable energy sources. The main problem with such energy is its instability, because the sun and wind are energy sources not subject to human control. For this reason, an electricity system with a high proportion of wind or solar facilities is exposed to a sudden surplus or shortage of electricity.

"In order to keep the grid balanced, especially in view of the fact that Israel 's electricity sector is closed, the more renewable energy is developed, the more pumped-storage hydroelectric power plants you'll need," Pecresse explained. "I'm talking about four-five stations - the three being planned and one or two more."

Siemens has also expressed interest in the project. Siemens Power and Gas CEO Willi Meixner said, "We are mainly looking at investing in building the power station to produce electricity from natural gas and supplying sysrems for the gas industry. In our current visit to Israel we were impressed with how the small private electricity producers like at Alon Tabor and Ramat Gabriel are progressing. The recent declaration by your energy minister about the halting of coal use and the development of the gas fields in Israel's economic waters is very interesting for us."

He added, "We are interested in investing in building a natural gas power station and from what I heard power stations will be built to supply 3-6 Gigawatt."

Published by Globes [online], Israel business news - www.globes-online.com - on September 16, 2016

© Copyright of Globes Publisher Itonut (1983) Ltd. 2016

Jerome Pecresse Photo: PR
Jerome Pecresse Photo: PR
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