Electricity Authority Chair and Economic Council Head Clash Over Data Centers
Prof. Avi Simhon clashed with Electricity Authority chair Amir Shabith over data-center expansion and grid capacity. Simhon said the Authority “ignores government decisions” after a July stop on new connection requests. Shabith called the remarks “nonsense” and cited approved investments of over ₪100 billion.
A sharp clash erupted between the head of the National Economic Council, Prof. Avi Simhon, and the chairman of the Electricity Authority, Amir Shabith, over the government’s policy on establishing data centers and whether the electricity grid can meet the expected surge in demand.
Simhon said the senior civil-service level is a central barrier to the issue, adding that the Electricity Authority “is completely out of control and ignores government decisions.”
Stop on new grid-connection requests
In July, the Electricity Authority and Noga, the company responsible for managing the electricity system, made an unusual move by halting the acceptance of new applications to connect data centers to the grid due to their massive scale.
The applications reflect demand for 27,000 megawatts, nearly three times the average consumption of the entire power system.
At the Energy and Economy conference held at Kiryat Sdeh Teufa (Ben-Gurion Airport area), Simhon accused the Electricity Authority and the Budget Division of trying to block the establishment of data centers through regulatory hurdles, and argued that the Electricity Authority is acting contrary to decisions the government made on the matter.
Shabith calls Simhon’s remarks “nonsense”
Shabith, who attended the conference, responded sharply, calling Simhon’s remarks “nonsense” and his proposals “populist.”
At the center of the dispute is the question of how the electricity system can support a broad rollout of data centers amid a jump in computing demand for artificial intelligence applications.
Energy Minister Eli Cohen said at the conference that the target is to allocate data centers about 20% of Israel’s electricity consumption.
Simhon said the 20% target reflects a decision by the elected leadership versus a more conservative approach from the civil-service level.
“If you had given the officials in the Ministry of Energy, in the Electricity Authority or in the Budget Division to manage it, I think they would not have insisted on more than 2%.”
He said the government’s role is not to limit electricity demand, but to ensure supply capacity that can meet it.
Simhon focused his criticism on the Electricity Authority’s position that data centers that build their own generation facilities would need to rely on renewable energy—something he said amounts to an effective block on projects in the field.
He said that “a large company offered the prime minister to bring turbines herself, buy gas and generate the electricity needed, and even claimed it could bring the equipment within a year.”
According to Simhon, the Electricity Authority and the Budget Division opposed the proposed model because, in their view, suitable land for a power-station site should be used to build a station that will supply electricity to the national grid.
Simhon countered that the government has already approved power stations at a scale that would allow Israel’s generation capacity to increase by about 20% to 25% by 2030–2031.
Shabith rejected the claims and said that it was the Electricity Authority that proposed allowing data centers to reach about 20% of electricity consumption, during the process for winning support from the Energy Minister, and that this was done in coordination with the AI headquarters.
“To the rest of the nonsense remarks that were said, I will not relate to them.”
Shabith said that relying on the assumption that data centers will build their own power stations would delay their establishment by more than a decade.
Instead, he said the Authority’s framework is based on investments of more than 100 billion shekels that have already been approved and begun to be carried out in the electricity sector, enabling data-center activity to expand in the coming years.
Simhon also criticized the Electricity Authority’s decision to stop accepting new data-center grid-connection applications after the applications submitted to the power system reached about 27 gigawatts.
He said that many of the applications are not serious because today there is almost no barrier to submitting them, and therefore they should be filtered rather than closing the gate to new applications.
“You can’t fire officials and you can’t appoint officials, and the Electricity Authority can ignore the government decision and go completely out of control. We are in limbo.”
