The Ministry of Energy and Water Resources today warned that the lack of electricity production reserves during peak hours this winter could force Israel Electric Corporation (IEC) (TASE: ELEC.B22) to initiate blackouts. The ministry is asking the public to refrain from using high energy consuming appliances between 5 and 9 pm "to prevent a situation in which it will not be possible to supply electricity."
Until now, IEC made these warnings about excess demand, and asked the public to avoid using high energy consuming appliances during peak hours. The announcement by the Ministry of Energy highlights the severity of the situation. The ministry says that electricity demand will peak at 11,100 megawatts, resulting in no capacity reserve.
The shortfall in electricity production capacity is due to the repeated disruptions in natural gas deliveries from Egypt in the past year, forcing IEC to switch to diesel to generate electricity. The Ministry of Energy has warned about the natural gas shortage and that the Yam Tethys reservoir is becoming depleted.
The Ministry of Energy said today, "Israel's current maximum electricity production is 13,130 megawatts by IEC and 490 megawatts by private producers. The available electricity production is less than this amount, mainly because of the severe shortage of natural gas. Many units currently use back-up fuels (diesel and industrial oil) instead of the primary fuel (natural gas), and some units lose 50 megawatts of the production capacity when using diesel instead of natural gas.
"In addition, due to the natural gas shortage, many private producers have greatly reduced or halted electricity production. There has also been an accumulation of unexpected breakdowns in production units, partly because of the repeated switching between the primary and back-up fuels, and partly because of delays in planned maintenance due to the shortage."
The Ministry of Energy predicts that the electricity situation will only stabilize in 2020, when production reserves will reach 20% of total capacity.
Published by Globes [online], Israel business news - www.globes-online.com - on February 1, 2012
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