Israel Expands Energy Storage with 1.5 GW Allocation

Israel has awarded contracts for 1.5 GW of high-voltage battery storage across three key regions, marking a significant milestone in the country's transition to renewable energy.

As per reports, the tender, managed by the Israeli Electricity Authority (IEA), attracted 11 bidders proposing 29 projects. The auction set tariffs ranging from USD 49.41 to USD 74.20 per kW, highlighting the increasing cost competitiveness of large-scale energy storage solutions. With an estimated investment of ILS 3 billion (~USD 840 million), the projects are expected to commence operations in 2027.

The awarded storage projects will be distributed across three key regions. In Northern Israel, Bi-Liht, Noy Agira, Allied, and Ormat secured contracts to develop 520 MW of capacity at an average tariff of 2.0 agorot per kW (approximately USD 0.0056 per kW).

In the Arava region, Enlight and EDF will develop 420 MW of storage capacity at 3.0 agorot per kW (approximately USD 0.0085 per kW). Meanwhile, in the Western Negev (Tekuma area), Noy Agira, Enlight, and EDF were awarded 560 MW at a similar tariff of USD 0.0085 per kW. These large-scale storage facilities are designed to integrate more renewable energy into the grid by storing surplus solar power and dispatching it during peak demand hours.

The reports further indicate that several leading renewable energy companies, including Enlight, EDF, Ormat Technologies, Noy Agira, Bi-Liht, and Allied, have secured contracts. Some of these developers have previously obtained grid connections under earlier tenders. Enlight, for instance, had already secured 300 MW of storage capacity through its Neot Smadar and Ohad projects.

Initially operating under regulated tariffs, these projects will transition to the merchant market, potentially increasing their total storage capacity from 1,300 MWh to 1,900 MWh. Ormat Technologies, in partnership with Allied Infrastructure, also announced a significant win, securing 300 MW/1,200 MWh of storage under tolling agreements, marking its entry into Israel’s large-scale energy storage sector.

The competitive pricing of this auction underscores the growing efficiency and affordability of energy storage technology. As Israel pushes forward with its ambitious renewable energy targets, battery storage will play a crucial role in balancing the grid, mitigating intermittency issues, and reducing reliance on fossil fuels. The awarded companies will now focus on obtaining necessary permits, securing interconnection approvals, and finalising project financing before construction begins.

Eli Cohen, Israel’s Minister of Energy and Infrastructure, emphasised that the development of storage facilities will help meet Israel’s renewable energy targets, lower electricity costs for consumers, and provide a reliable power supply even during emergencies.

Amir Shavit, Chairman of the Israel Electricity Authority, described the tender as a major milestone, reinforcing the country's goal of becoming a global leader in large-scale energy storage.