Water Energy Nexus as Manifested in Desalination based Water Sector: the case of Israel

The Israeli water sector is heavily relying on desalinated seawater. Currently, about 80% of the domestic drinking water is supplied from five Desalination Plants (DPs), which produce up to 600 MCM/year. Each plant has a long-term BOT agreement with the Israeli government to supply a specific amount ranging between 100-150 MCM/year within a prespecified monthly and daily limits. The price is fixed (an average of 0.7 $/CM), but deviation from the aforementioned limits incur penalties.  

The total power consumption of the DPs is estimated as 300MW at peak production. As such, the DPs are part of the largest energy consumers in the country. The Israeli Electricity Authority (IEA) utilizes several Electricity Load Shedding Programs (ELSPs) for large consumers. Specifically, in the "Voluntary" ELSPs, large consumers are requested, usually with a short notice, to shed their power consumption during energy shortage events. DPs which are enrolled in these Voluntary ELSPs are compensated for power shedding with up to 2 $/Kwh. Comparing the power shedding compensation to the desalinated water price and violation penalties, reveals obvious economic advantage for power shedding.

This imbalance in tariffs and penalties creates inefficiency in the joint management strategies of the energy and the water sectors. This inefficiency was recently manifested during the extreme heat wave (May 22-24, 2019). In many areas in the country, the temperature exceeded 40℃ and in several monitoring stations temperature records were broken and humidity dropped to 10%. Consequently, power demands increased and broke historical records. The IEA and the System Manager (SM) have utilized all available electricity production units and the possible ELSPs. On May 23^rd, the IEA asked large consumers, among them some of the DPs, to shed their consumption for four hours. At the same time, water demands in the national system were also high at about 25% over the previous week in average. The national water company utilized its available production wells, its surface water supply and the available storage. Noteworthy that the extreme weather conditions contributed to over 1000 fires around the country, which increased the pressure for a reliable water supply.   

Considering the conflict between the water and energy sector above, the national water system operator turned to its regulator, the Water Authority (WA), and asked for their intervention to prevent the DPs from engaging in ELSP. Nevertheless, based on contractual and legal issues, the WA cannot force the DPs to maintain production. As such, only "informal" requests were made, in which one of the DPs rejected the ELSP offer.

At the end, there was no water or power outage, but this case study emphasizes the water-energy nexus and the need for a collaboration between the two sectors at the national level, this is especially true under extreme conditions. The current tariffs are clearly imbalanced and they cannot contribute to efficient joint management. Regulation and policy should be advised, but even though the WA and the IEA are both governmental authorities they lack an official mechanism to decide on joint management strategies.