Is Israeli Electricity Really Cheapest in the West?

Energy Minister Yuval Steinitz insists that even before the expected cut, our electricity is not expensive. We turned on the Globes whistle counter

Minister of Energy Yuval Steinitz likes to tell in the praise of natural gas. In an interview with Radio 103FM, he broadened his talk about his contribution to the environment and the state coffers, but interviewer Ben Caspit actually asked about the promises that the switch to gas would reduce electricity. "It went down!" Steinitz insisted, mentioning a 4% reduction in the rate expected in January. And he continued: "The price of electricity in Israel, largely thanks to natural gas, is among the lowest in the West; much lower, for example, from countries such as the United Kingdom, or Norway, or Germany."

In full flavor: The amazing dishes you can make from citrus fruits

Julia Frilik-Niv in collaboration with zap rest

Do we really pay less relative to the West? Steinitz (Photo: Reuven Castro)

Mickey Zohar and Yuval Steinitz in a special announcement by PM Netanyahu in Kfar Maccabiah, September 9, 2019 (Photo: Reuven Castro)

Sometimes, when we look at the monthly bill, we are reassured that relative to the rich countries, we pay little. What do the facts say?

Let’s start with an important distinction. Israeli electricity is priced in two ways: A home consumer usually pays a "uniform rate", which today stands at 47 cents per kWh. Eurostat, which collected electricity prices in the EU including taxes. The tariff in Israel, about 55 agorot including VAT, is higher than that in Bulgaria, Hungary, Malta, Lithuania and Croatia. In all countries in the West more expensive. In Norway - 76 cents per kWh, in the UK - 87 cents, and in Germany NIS 1.26. The difference is mainly due to high taxes, some of which are intended for green energy development.

The Israeli advantage disappears when you look at the average price for industry and other consumers who pay a variable rate. OECD data shows that in most countries, the tariffs for manufacturing industry have relatively large discounts on domestic tariffs, so the manufacturers there pay less than their counterparts here. In Norway, for example, factories pay 34 cents per kWh - 55% less than a home consumer. In Israel, they paid in 2013 (the most recent figure we found) only 25% less.

Bottom line: Steinitz's words are mostly correct. Home consumer electricity in Israel is cheaper than in most of the West. The industry has an average price.

Research: Yiftach Brill