New Current: Is a free market also free electricity?

A new era in the electricity market: this is how you can change your electricity supplier, consume green electricity and lower your monthly bill.

Adv.

Attorney Yoni Hantzis, Doral Energy

06/10/2022

Thursday, 06 October 2022, 12:57 Updated: Friday, 07 October 2022, 08:27

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Electric Company.

Does the reform mean that electricity can be purchased not only from it? (Photo: Yossi Weiss, the Electric Company)

The electricity reform came into force and started, and starting this January, every private house will be able to consume electricity, not only from the electricity company, but also from private entities.

As part of the reform, the Electricity Authority opened the 'supply segment' of the electricity grid to competition, with the clear aim of creating a freer market and barter in electricity - and as a result, lowering the price of electricity for the consumer.

This is a precedent reform, because until today the electricity company was a monopoly and the only one that sold electricity to all of us, but now the consumer at the end can choose for himself from whom he buys electricity for his home or business.

That is, whoever holds a 'supplier's license' can sell electricity to any optional consumer.

Also, in the near future, consumers will also be able to choose what type of electricity they want to consume - clean or polluting and communicate with suppliers that provide green electricity.

Who are the private suppliers and who are the manufacturers?

As part of the reform in the electricity sector, it was determined that "private electricity suppliers" will be able to group consumers under themselves and sell electricity to them, using two channels: the first - purchasing electricity from the state, and selling it on to the consumer, and the second - buying electricity from renewable energy facilities, and selling it on.

Recently, a number of companies have received a license to act as electricity suppliers, and while most of them will act as electricity "traders", buying from the state and selling to the consumer, some of the suppliers have rather unique characteristics.

These are renewable energy companies, which also have access to renewable energy production means, such as large solar projects and energy storage facilities, and intend to sell the consumer also green electricity produced in renewable energy facilities.

Doral is also among the green private suppliers.

Doral's activity is focused on the initiation and construction of large-scale solar projects, and with the entry into force of the reform, the company intends to use the green electricity it produces, and supply it to end consumers (which has not been possible to date).

Among the many consumers that Doral has contracted with, there are large public organizations, such as factories, hospitals, or insurance companies, commercial entities, high-tech companies, public companies, insurance companies and companies that are interested in environmental responsibility, as well as private consumers.

When it comes to green electricity, it is important to understand that the demand is greater than the supply.

Today only about 10% of the electricity in Israel is produced from renewable energy.

And while the numbers are expected to grow over time, there still won't be enough green electricity for everyone.

At the same time, renewable energy companies, such as Doral, understand the importance of the significant private market in the State of Israel, when in the end the goal is to sell green electricity in very large volumes, while constantly thinking about the next step.

Certainly in the Israeli market, in which most of the electricity is consumed in our homes.

The green electricity producers relevant to the reform are any entity that can produce electricity using renewable energies and that has received permission to connect the electricity to the grid and sell it to consumers.

Today, most of the electricity from renewable energy produced in Israel is from solar energy, and a little from wind turbines as well.

How is the electricity supply actually carried out?

The renewable energy producers and suppliers will be able to contract directly with each other and set a competitive price.

Companies that have already won the previous quotas of the Electricity Authority will be allowed to choose whether to continue with them or switch to operating in the free market.

The electricity reform stated that it is possible to buy electricity not from the "system manager" (Venus), but from solar production installations, which integrate energy storage, which will allow the use of the green electricity produced during the day even in the evening.

Following the reform, it is now possible to sell 'green electricity' to end consumers as well.

The electricity produced in the production facility is discharged into the grid and eventually sold to a domestic or commercial consumer.

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Will it be possible to use solar electricity in the evening as well?

In order to meet the challenge of using solar electricity in the evening, we will make it clear that it will be possible to buy and consume green electricity even in the afternoon and evening, when the solar facilities do not produce, through the use of energy storage - electricity produced during the day from solar energy will be stored in large batteries, and the electricity can also be discharged in the hours of darkness.

What are the production costs?

The production cost of green electricity is cheaper than normal electricity (such as electricity produced in power plants that run on coal or natural gas), which also lowers costs in the end for consumers as well.

The reasonable consumer just needs to find the right supplier that has an electricity supply.

Unfortunately, the total solar production is lower than the total average consumption in the economy.

Therefore, due to limited supply and very high demand, a reliable supplier must be found who will also know how to supply the goods.

Is everyone eligible to switch to private providers?

It is important to note that every consumer has the right to switch to a private supplier at will, and it is not possible to stop or limit the switch to private electricity suppliers.

What you need to do is order an electrical company "smart electricity meter" which costs about NIS 230.

This is a simple and easy one-time installation.

These days, the electricity company has already gone to tender with suppliers who are supposed to install the meters and the rate is supposed to increase.

We at Doral, for example, have already prepared with a complete set of service providers and also a portal that will allow you to connect remotely and see how much electricity was consumed at the end of the month.

At the end of the day, the goal is to connect the system with a smart home through an app, which will explain to the consumer how to do the process correctly.

Also, we intend to provide savings tips to reduce consumption during the expensive hours and tips to reduce pollution.

At the end of the day, this is a revolution on a huge scale, no less than the one introduced in the cellular sector.

What is a "smart meter"?

justifies his reputation. Lives Up to his name.

A meter with more advanced options than the existing meters, among other things for reading data remotely.

A smart meter has many advantages: for example, we will be able to know how much electricity we used and at what hours, it will be possible to do smart analyzes and it will be possible to connect to a smart meter remotely digitally and online.

Today there is already a new construction that comes with a smart meter.

In general, you need to ask the electricity company for a smart meter and they must provide you with it.

The procedure is very fast and is done using an identity card and remote mobility.

What is the real news for consumers and how will it affect us consumers?

This is significant news for the end consumers, who will be able to choose who they communicate with as an electricity supplier and for the first time, will be able to consume green electricity.

That is, companies like Doral that have access to solar production means and energy storage will be able to provide end consumers with green electricity from solar installations continuously.

In addition, this is also environmental news, as it is green electricity for all intents and purposes that is available to end consumers, which has not been possible until now.

Also, as part of the reform, electricity producers will be able to receive a competitive rate for the electricity they produce.

The virtual suppliers will also be able to offer consumers packages of electricity, where the consumer can choose how much of the electricity consumed will be from renewable energy sources.

There is already a strong demand from international companies operating in Israel as well, some of which must meet certain emission targets and also from private consumers who are interested in electricity from renewable energy sources.

Moreover, today the factories and businesses connected to a private electricity supplier receive a discount of between 5%-8% on the electricity bill, which translates into hundreds of shekels for an average household and tens of millions of shekels per year that can be saved by using green electricity.

Adv.

How is the electricity supply process carried out and what does the consumer see?

The supply of electricity to the end consumer will continue to be carried out just as we consume electricity now.

From the moment the consumer chooses to change electricity supplier, he has to ask the electricity supplier to "associate" him with him, in a fairly simple digital process.

From the moment of association, the consumer receives an electricity bill from the electricity supplier to which he connected, with the only difference being that the electricity bill will come from the new electricity supplier, and not from the electricity company.

Switching between providers can be done in a relatively free, fairly fast way.

It is important to note that, regardless of the identity of the electricity supplier, the electricity transmission network in Israel will continue to be the responsibility of the state, the electric company and the system manager company ('Nega'), when the segment that is opened to competition is the supply segment - that is, the accounting component for the electricity consumed at the end.

This means that the infrastructure of the electric company remains the exact same infrastructure, therefore there is no real change on the part of the customers (except in the source of electricity generation and of course the price).

In terms of the level of service - we remain with the same commitment of service, the same availability of electricity, and in practice there is no difference, except for a central issue - the invoice is simply given by one of the private suppliers.

How will you choose your electricity correctly and what does the future hold for us?

First of all, to make the right choice, you must contact a leading and reliable company.

If we also want to find someone who can provide green electricity, we will examine who can actually provide us with the most green electricity and who has a suitable supply of electricity.

For example, the Doral company has the highest supply in the market in terms of solar storage facilities, and thanks to this, you can guarantee available and continuous green electricity for you, without any worries.

At the economic level, this is a very important reform.

At the end of the day, the state has taken on important goals to increase the consumption of renewable energy and the reform encourages the use of renewable energy and its accessibility to all consumers and at various times of the day, because of the tariff structure established in the reform and the incentives from it.

In the economic aspect, this greatly accelerates the pace of connecting renewable energy facilities in the country.

Until today, in order to sell electricity through solar facilities, you had to go through a arduous tender, but following the implementation of the reform plan, it is possible to build facilities for the production of solar electricity according to a free market model and according to the pace of each entrepreneur.

That is: those who have the right means, knowledge, technology and human capital - will be able to establish facilities for the production of solar electricity easily and quickly, when the clear goal is to speed up the rate of connecting the solar facilities.

The reform helps with that.

The State of Israel is currently at 10% renewable energy production and the goal is to reach 30% by the end of the decade, and 50% and even more in the following years.

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