Sources inform ''Globes'' that Israel Electric Corporation (IEC) has proposed building its own 360-400 Megawatt (MW) natural gas-driven power station at Ramat Hovav in the Negev. The proposal is included in the company's plan to increase electricity production to meet the sharp rise in demand.
The estimated cost of the power station is $500 million. The company plans to build the power station adjacent to the power station to be built by Ofer Brothers and Siemens AG's (NYSE:SI; XETRA:SIE) joint venture, Ofer (Power Stations) Ltd. (OPC).
An alternative to building a new power station at Ramat Hovav is to build two 125-MW units at IEC's power station at Caesarea.
Last week, IEC's board approved management's plan to boost electricity production by 500 MW in order to prevent an electricity shortage in 2009-10. The plan has been sent to Minister of National Infrastructures Benjamin Ben-Eliezer for approval. If he approves IEC's plan, it will boost the company's new emergency plan from 500 MW to 600-700 MW, which will require an extra $50-100 million in investment.
Senior government officials said today that construction of an IEC power station at Ramat Hovav could have repercussions on negotiations with OPC on its planned power station at the site. The sources doubted whether Ramat Hovav had the infrastructure to support two power stations.
The Public Utilities Authority (Electricity) recently warned that Ramat Hovav's transmission capacity was limited. To avoid harming private power producers, the Public Utilities Authority recommended not allowing IEC to build a power station at Ramat Hovav, but to examine alternative sites.
Published by Globes [online], Israel business news - www.globes-online.com - on January 21, 2008
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