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Wholesale electricity market economics of solar generation in Israel

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  • Milstein, Irena
  • Tishler, Asher
  • Woo, Chi-Keung

Abstract

We use a two-stage model to determine the equilibrium capacities, generation levels, and prices of a wholesale electricity market in which independent power producers (IPPs) use natural gas-fired (NG) and photovoltaic (PV) technologies. PV's effective capacity is high during midday but low in other daytime hours. Applied to Israel's stylized electricity market in 2030, our model finds NG and PV are necessary to meet Israel's electricity demands; NG mitigates daytime price spikes and enhances consumer welfare; NG IPPs are profitable; and PV IPPs may be unprofitable, potentially requiring government support to aid Israel's achievement of a clean and sustainable future.

Suggested Citation

  • Milstein, Irena & Tishler, Asher & Woo, Chi-Keung, 2022. "Wholesale electricity market economics of solar generation in Israel," Utilities Policy, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:juipol:v:79:y:2022:i:c:s0957178722001072
    DOI: 10.1016/j.jup.2022.101443
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    3. Mittelman, Gur & Eran, Ronen & Zhivin, Lev & Eisenhändler, Ohad & Luzon, Yossi & Tshuva, Moshe, 2023. "The potential of renewable electricity in isolated grids: The case of Israel in 2050," Applied Energy, Elsevier, vol. 349(C).

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