05.07.2009

Israel Electric Corp. is the sole integrated electric utility in the State of Israel and generates, transmits and distributes substantially all the electricity used in the State of Israel. The State of Israel owns approximately 99.85%of the Company.

As of December 31, 2009, IEC maintains and operates 17 power station sites (including five sites for steam driven power stations) with installed generating capacity of 11,664 megawatts. Each Company power station site has one or more separate units to generate electricity, leading to a total of 59 generating units, of which 20 are steam powered and 39 gas turbines (of which 14 industrial gas turbines, 16 jet gas turbines, 8 combined cycle gas turbines and 1 industrial gas turbine for future operation in the combined cycle format).

IEC’s steam driven generating units produce electricity with steam turbines and include carbonic units powered by coal and/or fuel oil, steam units driven by fuel oil and/or natural gas, jet gas turbines driven by diesel only and industrial gas turbines driven by diesel and/or natural gas.

Orot Rabin (2,610 MW) at Hadera and Rutenberg in Ashkelon (2,250 MW). Currently all the coal plant units in Ashkelon and Hadera power stations are of the “critical” technology, that have an efficiency of ~39-40%. The super critic technology (higher temperature in the boilers and additional technological improvements) is more efficient by 3-7% than the critical technology, that has a plant efficiency of 41-43%. The D power plant in Ashkelon which is planned is of that technology. IEC says that it is of 42% efficiency. This plant will probably cost about $2.1 billion or more. The ultra super critic technology is of much higher efficiency 45-48% (that is up to 20% more efficient than the old critic units of IEC). This is the leading technology and all new and repowered power plants in Germany for example are built in this family of technologies in the past 10-15 years. Such a plant (for 1200 MW as IEC plan in the D station) will probably cost $500-700 million more than the planned super critic plan. There are those in Israel, who are trying to convince IEC, the government, the PUA and VATAL, to force IEC to go to that technology although IEC estimates this would take 2-3 years longer to establish the plant.

1st August 2011 – MNI Minister Landau ordered that 4 of the 6 turbines at Orot Rabin be converted to natural gas turbines instead of coal

IEC announced in October 2011 – IEC expects coal consumption 13.3 million mt in 2012, a record for the company. The IEC consumed 12 million mt of coal in 2010 and the amount is expected to increase to 12.5 million in 2011. The supply mix would remain unchanged with about 50% of the coal coming from Colombia, 25-30% from South Africa and the remainder from Russia and other smaller suppliers. Demand for coal in 2013 was likely to drop to 11-11.5 million mt once the Tamar field comes online and the IEC shuts down one of its Hadera plants to install flue gas desulfurization units. Israeli coal demand could drop even further to around 9 million mt a year by 2016 once the IEC proceeds with plans to switch one of the older Hadera plants to gas from coal.

The API#2 index is the benchmark price reference for coal imported into Europe as published by Argus/McCloskey Coal Price Index Report.

API#2 is the coal index that represent closely IEC’s coal price. In 2008 IEC adjusted cost of coal was below the index and in 2009 above it. In 2008 IEC paid an average of 499 NIS per ton of coal and in 2009 418 NIS (based on IEC Financial books for 2009)

Israel’s largest holding company with a substantial energy portfolio. IC’s primary holdings include: Israel Chemicals (ICL – a leading global fertilizers and specialty chemicals producer), Zim integrated shipping services, Oil Refineries (ORL – Israel’s largest integrated refinery and petrochemicals producer), Inkia Energy (a prominent Latin American power generation company), Tower Semiconductor, Project Better Place (a global developer of electric recharge grids supporting electric vehicles), IC Green Energy (a company focused on renewable energy projects and technologies).
Yam Tethys and Israel Corp – on 25.3.2008 an agreement was signed with IC for the total supply of 2 bcm of natural gas, the supply of which will start when the southern section of the pipeline is completed which should be around mid 2009 and also based upon the completion of the conversion of IC’s generation into natural gas generating units, which will be done gradually throughout the company beginning at the end of 2008 with the units at Sdom where most of the gas is due to be consumed. The supply will terminate either 5 years after supply starts but not later than September 2015 but can be extended by another year if not all the gas contracted for has been consumed.

Israel Corp is in the process of establishing two IPP projects: the tender OPC IPP for 400 MW at Mishor Rotem and a 400 MW IPP at their Dead Sea Plant.

In April 2010, the company also increased its energy business in South America, via its sub-subsidiary Kallpa, which is owned by its subsidiary Inkia and which won a PPA to supply 560 MW of electricity with a contract of 8-10 years as of 2014. IC intends setting up two more power stations so that with the three already existing stations their generation supply in Peru should reach 850 MW.

Intraday trading refers to opening and closing a position in a security in the same trading day. This can be buying and selling to capitalize on a potential rise in a security’s value or shorting and covering the short to capitalize on a potential drop in value. Intraday traders capitalize on small moves in the value of a security by using “leverage” or “margin”, which basically means borrowing money.

A customer who has a contract for interruptible service which enables the supplier to interrupt supply of gas at short notice and the buyer to pay a lower tariff for the gas. Low-priority service offered to customers under schedules or contracts which anticipate and permit interruption on short notice. Often in a gas transportation contract, it is possible that under certain circumstances that additional capacity (in excess of ‘firm capacity’) be made available. Whilst for instance the UK Interconnector is obliged, subject to physical and operational conditions, to make such additional capacity available whenever possible, availability may be interrupted at times and this capacity is therefore described as ‘interruptible capacity’.

IAEA is the world’s center of cooperation in the nuclear field, set up as the world’s “Atoms for Peace” organization in 1957 within the United Nations family. The Agency works with its Member States and multiple partners worldwide to promote safe, secure and peaceful nuclear technologies.

The idea that oil producers and consumers are mutually dependent on one another. An appreciation of interdependence in an important component in the evolving conception of
energy security.

Energy interdependence is about building a relationship of mutual dependence between energy producers and energy consumers. In reality, producers continue to invest billions of dollars in consuming countries – particularly the United States – and both sides have a strong interest in a healthy global economy. More specifically, consumers worry about security of supply; producers worry about security of demand. We can address both worries by increasing access and investment across the entire value chain from upstream oil and gas fields to refining and transportation to downstream markets – and developing widely-based joint ventures. Energy in the 21st century is increasingly characterized by large institutions responsible for satisfying consumer’s energy needs; long distances separating resource exploitation from resource consumption; finite nature of fossil fuel resources; the need for vast investments to satisfy world requirements ($1 trillion a year until 2030); climate change; petrodollars earned by oil and gas exporting countries and paid by importers all requires increasing interaction among nations all leading to greater energy interdependence, rather than national energy independence.

Intercontinental Exchange operates global commodity and financial products marketplaces, including the world’s leading electronic energy markets and soft commodity exchange. ICE’s diverse futures and over-the-counter (OTC) markets offer access to contracts based on crude oil and refined products, natural gas, power and emissions, as well as agricultural commodities including cocoa, coffee, cotton, ethanol, orange juice, wood pulp and sugar, in addition to foreign currency and equity index futures and options. ICE® conducts its energy futures markets through ICE Futures Europe, its U.K. regulated London-based subsidiary, which offers the world’s leading oil benchmarks and trades nearly half of the world’s global crude futures in its markets. ICE’s state-of-the-art electronic trading platform brings market access and transparency to participants in more than 50 countries. ICE Futures Europe offers liquid markets in the world’s leading oil benchmarks: Brent Crude futures and West Texas Intermediate (WTI) Crude futures. ICE also operates a liquid and transparent marketplace for trading North American OTC natural gas and power contracts.

A 40 inch diameter 238 km gas pipeline providing a strategic link between the UK and continental Europe, connecting the two gas transmission systems at Bacton in the UK and Zeebrugge in Belgium.

The Interconnector is bi-directional, such that the physical Flow Direction can either be from Bacton to Zeebrugge (Forward Flow) or from Zeebrugge to Bacton (Reverse Flow).

It has a capacity of 20 bcma in forward flow (GB to Belgium)and 25.5 bcm in reverse flow (B to GB).

The Third Package defines an interconnector as a transmission line which crosses or spans a border between member states for the sole purpose of connecting the national transmission systems of those member states.

Inside diameter of a pipeline, the measurement of which is important as one of the measures required to calculate the pipeline’s gas flow capacity