Assessing the options for a competitive electricity market in Israel

A. TISHLER, J. NEWMAN, I. SPEKTERMAN, Chi Keung WOO

Research output: Contribution to journalArticles

6 Citations (Scopus)

Abstract

In July 2006, the Israeli government affirmed its 2003 decision to reform the Israeli electricity industry, currently dominated by the Israel Electric Corporation (IEC), a government-owned vertically integrated electric utility. The reform calls for the deregulation and privatization of the generation and customer service segments of the industry, leaving transmission and distribution (T&D) regulated to provide open access to all end-users. This paper projects the performance of the post-reform market structure for the period 2007-2030 relative to that of the status quo. The post-reform generation market's prices are determined according to the Cournot conjecture. To mitigate excessive price volatility and surges, the generation market also includes a firm that is contracted to make peak electricity sales to customers at a pre-determined price, only when the competitive price exceeds the pre-determined level. Our results show (a) the post-reform retail prices for end-users will exceed those under the status quo; (b) the post-reform profits may not be sufficient to keep firms operating combined cycle generation units financially viable; and (c) the net benefit from deregulating the electricity sector in Israel will most likely be negative. Copyright © 2007 Elsevier Ltd. All rights reserved.
Original languageEnglish
Pages (from-to)21-29
JournalUtilities Policy
Volume16
Issue number1
DOIs
Publication statusPublished - Mar 2008

Citation

Tishler, A., Newman, J., Spekterman, I., & Woo, C. K. (2008). Assessing the options for a competitive electricity market in Israel. Utilities Policy, 16(1), 21-29. doi: 10.1016/j.jup.2007.07.002

Keywords

  • Cost–benefit analysis
  • Electricity market reform
  • Israel

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