Israel Electric Corporation (IEC) (TASE: ELEC.B22) is considering building a nuclear power plant at Shabta in the Negev, as well as a huge solar energy plant, instead of building the coal-fired power plant due to come on line in 2020.
IEC deputy CEO and VP production and transport Moshe Bachar recently said that the transition to environmentally friendly energy sources was essential, and that higher electricity rates were inevitable. "The era of cheap electricity is over," he said at a managers' conference ahead of 2010. Bachar is considered the top professional authority at the company.
IEC's current development plan for 2020 (Project E) includes construction of an Integrated Gasification Combined Cycle (IGCC) (or so called "clean coal") power plant, in addition to the coal-fired power plant planned for construction near Ashkelon which is due to come on line in 2015 (Project D). However, Bachar said that the company was considering building a 1,200-megawatt nuclear power plant and a 1,000-megawatt solar energy plant instead.
Bachar said that Israel's future energy economy would be based on environmentally friendly energy sources: nuclear power, natural gas, and renewable energy. The company will only use coal-fired power plants as back-up and to secure electricity supplies.
The idea for building a nuclear power plant again came up for discussion at government ministries, after Jordan announced plans to build a nuclear power plant near Aqaba. Bachar said, "In the coming years, we will have to create a mix of fuels, while conserving the environment and saving energy sources, despite the expected rise in demand for electricity, due to population growth of one million more residents by 2020, urbanization, and extended life expectancy. The era of cheap electricity is over. Environmental technology is significantly more expensive, despite technological improvements."
The only two commercial suppliers of nuclear power plants are France's Areva SA and the US's Westinghouse Electric Company LLC.
If IEC decides to build a nuclear power plant and a solar energy plant, it will face technical hurdles, regulatory difficulties, and major opposition from private power producers. Firstly, a nuclear power plant would require Israel to sign the Non-Proliferation Treaty. Secondly, IEC's massive entry into the renewable energy industry contradicts the policy of the Public Utilities Authority (Electricity) and the Ministry of Finance, which bans this out of concern for unfair competition against private power producers.
Environmental organizations would also probably oppose a nuclear power plant on the grounds of the risk of radiation in the event of a breakdown, sabotage, or a strong earthquake.
Finally, a 1,000-megawatt solar power array, using current technology, would need 20,000 dunam (5,000 acres) of land and cost $4 billion to build.
Published by Globes [online], Israel business news - www.globes-online.com - on January 24, 2010
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