Dorad, Israel’s first private power plant, has been prevented from expanding due to bitter disputes between its partners. But now, following the withdrawal of two lawsuits by Edeltech Group, the biggest private electricity production company in Israel, Dorad is back in the race to build another private power plant.
The Israel Public Utilities Authority for Electricity’s regulations has set a limited number of power plants that can open in the coming years. The market is becoming like a game of musical chairs worth billions of shekels, in which one of the competitors will lose its place in the grid, and the decision will directly affect the pace of construction and our electricity bills. –
An inevitable conflict due to regulatory restrictions
The planning of the Dorad power plant began in 2002 and it began generating electricity for private customers in 2014. Dorad was founded as a partnership between Edeltech Group, controlled by Ori Edelsburg, Dori Energy (originally owned by contractor Uri Dori, now owned by Amos Luzon in partnership with the Aluma Fund), Turkish company Zorlu and government-owned EAPC (which built the station on land it owned). However, the deterioration of Israeli-Turkish relations and difficulties in Zorlu itself has led to its withdrawal from the station tender.
The conflict between Edeltech, the minority shareholder in Dorad’s power station but with a particularly large position in Israel’s electricity production market, and the other partners, stems from several reasons. The main one concerns the regulatory limit, which states that no private producer is allowed to own a power plant with an aggregate production capacity of more than 20% of production on the grid. The limit does not change whether the holding is full, of majority shares or even of minority shares of 5% of the plant. The aim is to prevent extensive price coordination between rivals and to keep the market competitive.
For Edeltech, this is a big problem. If the Dorad plant is enlarged (an additional power plant called Dorad 2 will be built on its land), this will bring Edeltech too close to the 20% limit, which would prevent it from building additional power plants. However, the consideration it will receive in return for this would be small due to its minority stake of 18.75% in Dorad.
For Luzon and Aluma Fund, on the other hand, expanding Dorad is a necessary step. The land already exists, and building additional production capacity on it, with demand for electricity expected to soar in the coming years, is the obvious thing to do. The same is true for EAPC, a government company that is interested in realizing the full value of the property it owns, thereby raking in over NIS 1 billion for the state.
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This basic conflict of interest gave rise to several secondary conflicts, over the inflated costs of building the plant (which ended with a payment of $135 million by Edeltech and Zorlu to the joint fund) and over Zorlo’s shares when it left the joint venture. In November, Edeltech withdrew its lawsuit on the matter, and the shares officially transferred to Luzon-Alumi, which thus increased its stake to 33.75% in the plant, second only to EAPC, which owns 37.5%.
Together they constitute over 70%, and after a change in the company’s ownership structure, this is a majority that allows them to move forward with the construction of Dorad 2, much to the dismay of Edeltech. The latter appealed the decision to build the station, but on December 15 was forced to withdraw this lawsuit as well. While it reserves the right to re-file the lawsuit, on the face of it, Dorad’s path to fulfilling construction is clear.
This is not the last obstacle. Dorad may need to raise capital from its partners to provide the equity capital required for expansion, but on the other hand, the money paid into the company’s coffers in the dispute over the construction costs may be enough to serve as capital, while most of the balance will be provided as a loan by one of the banks.
Dorad will also face the obstacles that every new power plant faces: a gas agreement (which will probably be significantly eased due to the gas agreement that has now been signed), purchasing a turbine and equipment (a challenge in the global market) and closing financing.
Some of the power plants due to be built in Israel by 2030 have not yet overcome these practical difficulties. While the Kesem power plant has already closed its financial agreement with Bank Hapoalim and begun construction, and the Dalia 2 power plant has secured a gas contract with Energean and a turbine contract with Siemens, OPC Hadera and the Reindeer power plants have not overcome any of these practical hurdles.
This puts them under great pressure. The Israel Public Utilities Authority for Electricity is prepared to pay “availability payments” for the next four power plants that will close their financing agreement by 2030. Kesem has already taken the first place, which leaves three places for power plants to be built – and four companies competing for them: Dalia 2, OPC Hadera, Reindeer and Dorad. Because Dalia is at a relatively advanced stage, it is actually three companies competing for only two places.
While Dorad was paralyzed by the legal battles, its rivals felt confident. But if it returns to the game, it means one company will inevitably miss out.
From the perspective of the Israel Public Utilities Authority for Electricity, this is no bad thing, since it means that the producers will compete with each other, for quick financing and construction. But from the producers point of view, this puts a lot of pressure on them. It is in the interest of electricity consumers in Israel, both domestic and commercial, to build as many power plants as possible as quickly as possible at lower prices, and Dorad’s return to the race is a significant step towards that.
Published by Globes, Israel business news – en.globes.co.il – on December 21, 2025.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2025.
