Decision Proposal – Regulating the Operation of Generation Units at the Alon Tavor Site following their Sale by the Israel Electric Corporation By the power vested in it by the Electricity Market Law, 1996, and all its other legal powers, and following Government Decision no. 3859 of 3 June 2018 regarding the reform and restructuring of the energy market, the Electricity Authority (hereinafter, "the Authority") herby submits to public comment the regulation to be applied to generation units sold at the Alon Tavor site. 1. Definitions "Accumulated annual availability percentage" – Actual net available capacity throughout the year Maximum available capacity under ISO conditions throughout the same year "Alroi site" – the petroleum products storage terminal of Petroleum & Energy Infrastructures Ltd. in Kiryat Tivon. "Primary fuel" – one of the following: A. Gas – for dual-fuel generation units; B. Diesel fuel – for diesel fuel generation units. "the Site" – the Alon Tavor site intended for sale by the Israel Electric Corporation. "Actual net available capacity" – one of the following: A. If an unplanned generation deviation involving generation reduction occurs in a given half- hour – the maximum net capacity measures in that half-hour; B. If no unplanned generation deviation occurs – the updated statement submitted by the producer up to one hour before the relevant generation half-hour. "Planned net available capacity" – the net capacity provided by a producer using a primary fuel to the system operator in a given half-hour, in accordance with the statement of the producer in the Daily Plan. "Maximum net capacity under ISO conditions" – the net capacity of a generation unit under ISO conditions according to the results of an examination by the system operator. "Dispatching outside the day-ahead dispatching schedule" – a state where the system operator dispatches a generation unit in accordance with a detailed dispatching plan, although
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Decision Proposal – Regulating the Operation of Generation Units at the
Alon Tavor Site following their Sale by the Israel Electric Corporation
By the power vested in it by the Electricity Market Law, 1996, and all its other legal powers, and
following Government Decision no. 3859 of 3 June 2018 regarding the reform and restructuring
of the energy market, the Electricity Authority (hereinafter, "the Authority") herby submits to
public comment the regulation to be applied to generation units sold at the Alon Tavor site.
1. Definitions
"Accumulated annual availability percentage" –
Actual net available capacity throughout the year
Maximum available capacity under ISO
conditions throughout the same year
"Alroi site" – the petroleum products storage terminal of Petroleum & Energy Infrastructures
Ltd. in Kiryat Tivon.
"Primary fuel" – one of the following:
A. Gas – for dual-fuel generation units;
B. Diesel fuel – for diesel fuel generation units.
"the Site" – the Alon Tavor site intended for sale by the Israel Electric Corporation.
"Actual net available capacity" – one of the following:
A. If an unplanned generation deviation involving generation reduction occurs in a given half-
hour – the maximum net capacity measures in that half-hour;
B. If no unplanned generation deviation occurs – the updated statement submitted by the
producer up to one hour before the relevant generation half-hour.
"Planned net available capacity" – the net capacity provided by a producer using a primary
fuel to the system operator in a given half-hour, in accordance with the statement of the producer
in the Daily Plan.
"Maximum net capacity under ISO conditions" – the net capacity of a generation unit under
ISO conditions according to the results of an examination by the system operator.
"Dispatching outside the day-ahead dispatching schedule" – a state where the system
operator dispatches a generation unit in accordance with a detailed dispatching plan, although
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the incremental price quote offered by the producer for energy generation is higher than the
ceiling limited day-ahead price.
"Dispatching outside the real-time dispatching schedule" – a state where the system operator
dispatches a generation unit after the publication of a detailed dispatching plan, although the
incremental price quote offered by the producer for energy generation is higher than the ceiling
limited real-time price.
"Incremental price quote for energy generation" – an offer to increase or reduce energy
generation within the range of a give capacity in a generation unit [NIS / MWh].
"Diesel fuel generation unit" – each of the two single-fuel industrial gas turbines installed at
the Site.
"Integrated cycle" – a generation unit combining a steam turbine fed by residual hear from the
gas turbines at the Site.
"Real time price" – the real time marginal price minus any system constraints, as defined in
Standard 93, and as updated from time to time.
"Ceiling limited real-time price" – the lower of either the real time price or the rate ceiling
specified for a producer in table 2 – XX of supplement C.
"Day-ahead price" – the planned marginal price minus any system constraints, as defined in
Standard 93, and as updated from time to time.
"Ceiling limited day-ahead price" – the lower of either the day-ahead price or the rate ceiling
specified in table 2 – XX of supplement C.
"Flexible open cycle generation unit" – an open cycle generation unit that meets the criteria
specified for a flexible facility in Standard 85, that the winner in the bid may decide to establish
at the Site.
"Unplanned generation deviation" – the energy difference between actual generation and the
planned load in an updated and detailed dispatching plan, as defined in section b of Standard 94.
"Planned generation deviation" – the energy difference between the planned load in an updated
and detailed dispatching plan, as defined in section b of Standard 94, and the planned load in a
day-ahead detailed dispatching plan," as defined in section a of Standard 94.
"Reserve" – the difference between the planned net available capacity and the planned partial
load in a detailed dispatching plan, intended for use in real time to balance the system in
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accordance with the instructions of the system operator, provided that the unit is planned to be
synchronized with the network according to a detailed dispatching plan.
"Rate ceiling" – the rate in reference to which a limit to payments in the energy market is
determined.
Any other term in this decision proposal shall have the meaning prescribed by law and/or the
Book of Standards.
2. The acquisition transaction
A. The system operator and the winner of the bid (hereinafter, "the Producer") shall sign an
acquisition agreement.
B. The acquisition agreement shall include, inter alia, an availability and energy transaction,
under the following terms:
1) All actual net available capacity of the generation unit shall be provided to the
system operator.
2) The Producer shall be dispatched to the network by the system operator according
to the principles of central dispatching, as defined in Standard 93 and its updates,
and in accordance with a market mechanism that is liable to change from time to
time.
3) Availability payments shall be made only for the actual net available capacity for
which the Producer submitted a day-ahead energy generation quote.
3. Submitting daily plans
A. Each day by 10:00, the producer shall submit a plan for the next day to the system
operator (hereinafter, "the Daily Plan"). Every Thursday and every work day before a
holiday, the producer shall submit daily plans for Friday or the holiday and for every
other day until the next work day.
B. The Daily Plan shall be submitted for the integrated cycle unit, for each diesel fuel
generation unit and for the flexible open cycle generation unit separately.
C. The Daily Plan shall include an availability statement in accordance with form 1 of
supplement A and as follows:
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1) The producer shall specify the planned net available capacity with the primary fuel
regarding each generation unit at the Site at every half-hour.
2) The producer shall specify the planned net available capacity with a secondary fuel
regarding the integrated cycle and the open cycle flexible generation facility at every
half-hour.
3) The producer may submit an amendment to form 1 to the system operation in the
Daily Plan. The amended notice shall not be considered for the purpose of availability
payments, but only for payment for availability deviations, as specified below.
D. The Daily Plan for the integrated cycle and for each open cycle flexible generation unit
shall also include price quotes for energy generation as follows:
1) Price quotes for energy shall be submitted in accordance with form 2 of supplement
A. The quotes shall specify the cost of generation at minimum load, as well as
incremental quotes for energy generation within the range between minimum load
and planned net available capacity.
2) Price quotes for start-up shall be submitted in accordance with form 3 of supplement
A.
E. The price quotes submitted by the Producer shall be uncontrolled and unlimited by the
rate ceiling. Specifically, the price quotes shall reflect the opportunities of producers to
respond to economic incentives while gaining profits in accordance with the
mechanisms of a competitive market. Nevertheless, in cases where the Producer's quote
reflects an excessive cost or directly affects the price of energy paid to it in a way that
does not reflect a competitive equilibrium, the Authority may condition the payment
upon the implementation of cost control. In particular, in the following cases:
1) The incremental price quote for energy generation submitted by the Producer is
higher than the price ceiling.
2) The Producer is dispatched outside the day-ahead or real-time dispatching schedule.
3) The Producer is paid a rate for capacity provided for reserves and not utilized, as
specified in section 8 below.
4) The Producer is paid a supplementary rate, as specified in section 9 below.
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F. In addition to the aforementioned in section e above, in cases where the Authority and/or
the system operator suspect that the availability statement, the incremental price quotes
for energy generation, the start-up quote or the quote for minimum load were not given
in good faith or were intended to skew market prices, the Authority will consider cost
control or imposing additional sanctions on the Producer.
4. Detailed dispatching plans
A. The system operator shall submit a detailed dispatching plan for the next day to the
Producer regarding each of the generation units at the Site, and shall update such plan as
necessary, in accordance with Standard 94.
B. In the detailed dispatching plan, the system operator shall specify the capacity intended
for reserve in every half-hour of the next day.
5. Purchasing available capacity from the Producer
A. The system operator shall pay the Producer an availability rate for the planned net
available capacity of each generation unit at the Site as follows: