Assessing the options for a competitive electricity market in Israel

A. Tishler, J. Newman, I. Spekterman, C. K. Woo

Research output: Contribution to journalArticlepeer-review


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.

Original languageEnglish
Pages (from-to)21-29
Number of pages9
JournalUtilities Policy
Issue number1
StatePublished - Mar 2008


  • Cost-benefit analysis
  • Electricity market reform
  • Israel


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