Israel awards 1.5 GW energy storage in tender, pricing from $49.41 to $74.20 per kWh

Israel has awarded contracts for 1.5 GW of high-voltage battery storage capacity across three regions, marking a significant milestone in the country’s energy transition. The tender, which attracted 11 bidders proposing 29 projects, set capacity tariffs ranging from 2.0 to 3.0 agorot per kW, which in USD is approximately $0.00564 to $0.00847 per kW.

(Note that a conversion is therefore needed to kWh, which is an annual figure. Fully formed, the price is therefore $49.41 to $74.20 per kWh.)

Tender Overview

The auction, managed by the Israeli Electricity Authority (IEA), will facilitate the deployment of large-scale energy storage systems designed to integrate more renewable energy into the grid. With total investments estimated at ILS 3 billion (~$840 million), the projects are expected to commence operations in 2027.

The awarded projects will be distributed across three regions with the following details:

• Northern Israel: Bi-Liht, Noy Agira, Allied, and Ormat will develop four facilities totaling 520 MW at an average tariff of 2.0 agorot per kW.
• Arava: Enlight and EDF will establish three projects with a combined capacity of 420 MW at a 3.0 agorot/kW tariff.
• Western Negev (Tekuma area): Noy Agira, Enlight, and EDF will build four facilities totaling 560 MW at a 3.0 agorot/kW tariff.

These storage sites will help alleviate grid congestion and enhance the integration of solar power by enabling the storage and dispatch of renewable energy when demand peaks.

The awarded companies include leading renewable energy players such as Enlight, EDF, Ormat Technologies, Noy Agira, Bi-Liht, and Allied. Some of these developers had previously secured grid connections under earlier tenders.

ESS News had previously reported on some of announcements made already by winning developers, including Enlight securing 300 MW of storage rights through its Neot Smadar and Ohad projects, which will initially operate under regulated tariffs before transitioning to the merchant market. These projects will have a total storage capacity of 1,300 MWh, potentially increasing to 1,900 MWh after entering the deregulated market.

Ormat Technologies, in partnership with Allied Infrastructure, also announced it won tolling agreements for 300 MW/1,200 MWh of storage, marking its entry into Israel’s large-scale energy storage sector.

The competitive pricing in the auction underscores the growing cost efficiency of energy storage, paving the way for more investments in the sector.

The successful bidders will now work on securing permits, interconnection approvals, and financing ahead of construction.

Comments:

Minister of Energy and Infrastructure, Eli Cohen: “The establishment of the storage facilities is an importantstep towards meeting our goals for producing electricity from renewable energies, and I congratulate the winners of the tender. This will increase the supply of electricity in the economy, save costs for consumers and make it possible to consume electricity even during emergency times, while using clean electricity for the benefit of the health of Israeli citizens.”

Chairman of the Israel Electricity Authority, Amir Shavit: “We congratulate the winners of the first tender in Israel for the construction of high-voltage storage. This tender is a significant milestone in our plan to transform the State of Israel into the most ‘storage’ country in the world in the coming years, by promoting the construction of large-scale storage facilities and extensive investments in the economy.”