The IEC is nearing the loss of its production monopoly; Profit fell 24% in 2021

The IEC is nearing the loss of its production monopoly;  Profit fell 24% in 2021

The IEC published its financial statements for 2021. The reports reflect, among other things, the government’s decisions on the reform of the electricity sector, including the process of selling the company’s sites, which led to a decline in revenues.

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IEC revenues in 2021 amounted to NIS 22.1 billion, compared with NIS 23.7 billion in 2020 – a decrease of 7%. The decrease is due, among other things, to an exceptional and one-time receipt of NIS 740 million received in 2020 from the East Jerusalem Company for past debts. The balance of the decrease, in the amount of almost NIS 1 billion, is due, among other things, to the reduction in the electricity tariff during the reporting period.

Profit in 2021 amounted to NIS 1.3 billion, compared with NIS 1.7 billion in 2020 – a decrease of 24%.

Electricity production expenses in 2021 rose to NIS 19.5 billion, compared with NIS 18.5 billion in 2020. The main reason for the increase was a rise in global coal prices.

Electricity production by the IEC in 2021 decreased by about 13.8% compared to 2020, and amounted to 51% of total production, compared to 61% in 2020. This brings the IEC closer to a point where there will no longer be a monopoly on production.

The increase in electricity purchases from private producers is mainly due to electricity purchases from the Ramat Hovav power plant, which was sold at the end of 2020 as part of the structural change, as well as the introduction of private and renewable energy producers.

It should be noted that in 2021, the IEC’s use of coal out of all the fuels it uses for production amounted to 44.3%, and natural gas to 53.1%. This is a slight increase in the use of coal compared to 2020 so it stood at 42.7%. However, as IEC production declines, the relative share of coal increases.

The company contacted the Ministry of Environmental Protection this week and informed it that the fighting between Russia and Ukraine has implications for the availability of coal in the international market in general and the availability of low-sulfur coal in particular, which could affect compliance with the Orot Rabin emissions permit requirements.

Regarding the debts of the Palestinian Authority and the East Jerusalem Company (Knesset), the report states that “Knesset pays only partially and in an inconsistent and irregular manner its current debts to the company.”


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