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Israel opens its retail electricity market to competition

The Israeli Ministry of Energy and Infrastructure will implement a reform opening the electricity market to competition starting on 25 July 2024. The reform will break the monopoly of the state-owned integrated electric utility Israel Electric Corporation (IEC), allowing all consumers, even without a smart meter, to switch suppliers. Until now, only customers with a smart meter had the option to switch to a private electricity supplier. Eight companies that supply electricity privately will be available to consumers, including Electra Power, Pazgaz, Mashav Energy, Hot, Bezeq and Cellcom. In 2021, IEC’s market share in the supply segment was 70%, compared to 78% in 2017.

In 2018, a structural reform of the Israeli electricity sector was adopted, with the objectives to decentralise IEC, enhance efficiency in the electricity market, and increase competition.  As part of the reform, planned to be implemented over the course of 8 years (2018-2026), IEC’s share in electricity generation would decrease from 60% to 40%. Moreover, electricity supply would be gradually opened to competition, with the objective of a 60% market share for IEC by 2026. However, the company will maintain its monopoly over the transmission and distribution segments, which are in need of substantial upgrades. 

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