Israel is characterized by a comprehensive lack of conventional energy resources. Oil and gas explorations have yielded only negligible quantities (Israeli oil constitutes 0.2% of national energy requirements; Israeli gas, 0.3%). Israel has no coal. Substantial quantities of oil shale have been located, and tentative plans to build a 1,000 MWt generator to exploit this resource have been drawn. Conventional hydroelectric power cannot be considered, as there are no sizeable rivers in Israel. Although as yet it would not be cost-effective, there remains a future potential to generate hydroelectric power by exploiting the 400 meter difference in elevation between the Mediterranean and the Dead Sea. Biomass potential is limited, as Israel suffers from both water and land deficiencies. Wind energy potential exists but is not likely to be developed on a large scale, due to limited availability of suitable land. Nuclear power generation is an option.

Solar energy is the one area in which Israel has relatively high potential. Over 3.2% of national energy requirements are saved through the widespread use of domestic solar water heaters. All new construction requires such water heaters. Technological developments are creating broader and more efficient uses for solar energy, an encouraging trend both for the national economy and the environment.

Despite promising advances in the field of solar power, only 13% (1,600 MW) of the total installed capacity based on local sources by the year 2015 (Figures 11 and 12). As shown in the figure, maximum exploitation of local resources at an accelerated rate could amount to 27% of the total installed capacity. In the upper limit scenario, most power would be generated from oil shale processing, with only 12% based on renewable sources. The oil shale scheme would result in the dispersion of pollution away from the coastal plain, but will accelerate the rise of CO2 emissions per capita.


Israel’s national standard of living has increased steadily since statehood, with associated energy demands accompanying this growth. In 1950, Israel produced 543 million KWH. In 1989 production reached nearly 20 billion KWH a forty-fold increase! Figures 7 and 8 show how growth in electricity consumption is distributed throughout various economic sectors: industrial and household consumption has expanded most rapidly in recent years. In the late 1980s, energy consumption grew even faster than the GDP per capita (Figure 9). Per capita energy consumption remains, however, below that of other industrialized nations.

Electricity in Israel was for many years produced exclusively from oil. After the energy crisis of the 1970s, sources were diversified to include coal from friendly Western countries (United States, Germany, Australia and South Africa). By then, technological advances had made coal less unappealing, environmentally, than it had been. The first coal-fueled plant was erected at Hadera (at the center of the coastal plain), with an installed capacity of 1,400 MW. By 1997 this power complex will be expanded to an installed capacity of 2,500 MW the largest power generation center in Israel. A second coal-burning installation was built in Ashkelon (toward the southern end of the coastal plain). It has a 1,100 MW capacity. Other plants exist in Haifa (north) and Ashdod (center-south), and plans are being developed to expand their capacity. Figure 10 shows annual installed power generation capacity by plant.

Policy Options

As noted, Israel is almost wholly dependent on outside sources for energy. Solar energy, the one local, renewable, environmentally secure source of power in Israel, is being used to heat water for residences throughout Israel. Solar-generated electricity is the next step, but remains only a possibility for future development. The most economically and environmentally sound energy policy for Israel is therefore a reduction of demand and consumption in all sectors.

Some steps have already been taken. The Ministry of Energy and Infrastructure has implemented a wide-ranging Energy Conservation Program, which includes guidance, consultation, standardization and enforcement activities, and cooperation with fifteen government agencies. For example, the ministry has developed a joint plan with the Israel Electric Corporation, designed to reduce consumption by 1 billion KWH per year through the use of structural thermal insulation, efficient light bulbs for street lamps and intersections, and mechanisms for load shifting for minimization of peak-time use. Other aspects of the ministry’s program include enforcement authority over the Energy Resources Law of 1989, which requires industrial consumers to conduct an energy survey every five years. The ministry’s plan for heating and air conditioning, if properly implemented, will achieve a 40% savings in energy consumption. Plans affecting the water management sector include upgrading the efficiency of existing equipment, exploiting of pressure surpluses in water distribution systems, and tapping of geothermal sources. It is estimated that by the year 2000, conservation in all sectors combined could reach 10% of total energy demand.