In October 2016, the Electricity Authority published a draft resolution to hold a hearing regarding the arrangement of a competitive proceeding to set the tariff payable for electricity generation using photovoltaic technology.
The purpose of the proceeding is to allot additional quotas of approximately 1,300 MW for generating electricity, for the purpose of achieving the target set by the Israeli government, according to which 10% of all electricity produced in Israel shall be from renewable energy sources by the year 2020.
For the first time in the solar energy sector, the Electricity Authority is not pre-setting the electricity production tariffs which the bidders will receive, but rather, the tariff shall be set according to the bids to be tendered by bidders during the competitive proceeding, and the said tariff shall become a uniform tariff for all winners in that proceeding.
Furthermore, it appears that, compared to past proceedings, this proceeding will be easier for the bidders, who are not required this time to fulfill various conditions, such as receipt of a provisional license or the achievement of various milestones until the start-up of commercial operation of the PV power plants. However, the proceeding does stipulate a specific deadline for connecting the PV power plants to the electrical grid and the start-up of commercial operations.
The Electricity Authority is also contacting entities operating in the renewable energy market, including licensees holding expired provisional licenses who had performed a grid connection survey in the past, and is enabling them to use the survey to satisfy the precondition for participating in the bidding proceeding, despite the fact that the survey had been performed for a provisional license that has expired. In this way, the Electricity Authority is hoping that these bidders will be able to connect relatively quickly to the electrical grid, since they do not need to obtain requisite construction licenses and permits.
We note that the announcement of the Electricity Authority’s resolution marks the end of a long period of stagnation in the initiation, planning and construction of photovoltaic power plants. The Electricity Authority is hoping that this will lead to renewed growth in the industry and to accelerated volumes of renewable energy production in Israel.