Breaking Update
Israel Electricity Producers Face Market Power Concerns in New Study
Israel's Competition Authority study reveals concerns over electricity producers' market power, impacting sector consultations and competitive examinations.
Jerusalem, 28 December, 2025 (TPS-IL) — A new study by Israel’s Competition Authority that assesses the market power of electricity producers was published on Sunday. The study indicates concerns about the exercise of market power by electricity producers, even considering the expected production expansions.
The study is expected to assist the Competition Commissioner during consultations in the electricity sector, particularly with regard to sectoral competitive examinations in the electricity sector according to the Concentration Law.
In recent decades, the wholesale market in Israel for electricity production has been opened to competition. Previously controlled by the electricity company, which was the sole producer in the field, private producers have been given the opportunity to obtain production licenses and establish electricity production facilities that will operate alongside the power plants of the electricity company.
The wholesale electricity market mechanism is unique – a central market mechanism within which a tender is held every day for each half hour of the following day. The system administrator publishes in advance a forecast of how much electricity it will be required to supply each half hour of the following day (“demand levels”) and accordingly the power plants offer price quotes for the supply of electricity for each half hour separately.
The new study details two methodologies that focus on examining the incentive and ability of electricity producers to adopt a strategy of reducing the amount of electricity they supply to the economy in order to raise the market price and thereby maximize their profits.
