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About PEA

 

 

[Law of Establishment] [Objectives and Priorities] [ Letter of Sector Policy (LSP) ] [ Transmission] [Distribution]

The PEA in brief

Law of Establishment

 The Palestinian Energy Authority (PEA) was established according to a presidential decree issued on November 14, 1994.  Dr. Abdul Rahman Hamad was appointed to be the chairman of the PEA on February 26, 1995 (decision No. 12 of 1995).  PEA is an independent institution, has its own budget and follows the directions of the President of the Palestinian National Authority.

 

   

Objectives and Priorities of the PEA

The PEA is committed to the following overall objectives:

·   Providing the citizens of Palestine with reliable electricity at affordable prices.

·   Laying the legal, institutional, economic, financial and technical basis for efficient system development.

·   Reforming the institutional framework.  This includes overall sector coordination, policy formation, system development, generation, transmission, distribution, tariffs and regulation.  The PEA will continue to be the sole PNA agency responsible for these critical national functions.  The PEA will also continue to be responsible for other components such as rural electrification, regional interconnection, energy conservation and research that cannot be commercialized.  Tariff setting and regulation will be overseen by a separate independent commission reporting to the PEA.   

·   Remedying system deficiencies and improving service delivery.  Additionally, focusing on rehabilitation of the existing networks and extend services to currently non-served communities. Over the last three years, the PEA has undertaken a number of actions studies and consultations aimed at improving existing system performance, service delivery and reforming the institutional framework.  These actions have been undertaken in conjunction with the local municipalities and village councils with the assistance of the World Bank, Norway, and other members of the donor community.  System rehabilitation and the distribution network upgrading was and is one of the crucial projects to this effect.  This was carried out with the assistance of the government of Norway.  The program now being extended to cover the north and south West Bank.  Rural Electrification is also a crucial function to develop the agricultural sector.

·   Supervising technically the construction, the operation, and the maintenance of electrical projects and networks.

·   Conducting researches and studies and searching for all energy resources.  

 

  Letter of Sector Policy (LSP)

  Signed by the chairman of PEA and the President of the PNA, the letter of sector policy (LSP) sets out the Palestinian national Authority and the Palestinian Energy Authority policy for the development of the power sector. While the PEA is fully committed to the following strategy, the implementation of the proposed reforms should be carefully sequenced and calibrated over the next two to three years. 

The main components of the medium term strategy of the PEA are to focus on:

  ·    Rehabilitating the existing networks and services and extending services to currently non-served communities.

·    Separating the policy and regulatory functions from the commercial functions of the power sector enterprises.

·    Reorganizing the PEA to be the main policy making body for the sector.

·    Encouraging maximum private sector participation in sector operations and development particularly in generation and distribution, thus minimizing the need for government financial support.

·    Consolidating transmission networks, systems and functions in a new transmission company.

·    Establishing three new autonomous and commercially oriented distribution utilities (one in Gaza and two in the West Bank) by consolidating the existing electricity departments of the municipalities and village councils.

·    Increasing the operating/technical efficiency of the distribution utility companies through energy end use efficiency, energy conservation and better load management.

·    Developing pragmatic and practical tariff setting guidelines that will permit full cost recovery and promote the commercial viability and feasibility of the sector enterprises while at the same time providing for “lifeline” rates for needy consumers.

 

The aforesaid strategy is guided by the following core considerations:

  ·    While the existing power system is currently weak and fragmented, complete centralization of all components of the system in a single public agency would be inefficient and would militate against long term development.  In particular, it would discourage private investment in the sector.

·    Decentralization and commercialization can yield significant service benefits to consumers, reduce the financial burden on the public sector and encourage private investment and participation.  Commercialization and privatization of key parts of the system (generation and distribution) is feasible and desirable.

·    Certain functions and parts of the system (particularly policy, system development, and transmission) cannot be efficiently privatized and must thus be retained in the public sector to significant extent.

  Based on the above core considerations, the following actions are contemplated:  

Generation

  In order to increase system capacity and reduce supply dependency on Israel, the PEA will encourage the creation of new generating capacity within Palestine.  The PEA will encourage maximum participation by the private sector.  Therefore, an agreement has been reached with the private sector; Palestine Electric Company (PEC) which will build a power plant in the Gaza Governorates.  Discussions are also carried out to build another power plant in the West Bank.  The PEA will alter the sources of supply by encouraging the purchases from neighboring countries while at the same time promoting regional interconnection, system stabilization and scale economies.

The PEA has already taken major strides towards the goal of having an independent energy supply.  It is agreed that the project will be implemented in two phases. Each phase will have a twenty-year term on build, Own, Operate, and Transfer (BOOT) basis.

The transfer of electricity to the West Bank can be achieved through a wheeling arrangement with the IEC or a transmission line corridor.  

 

Transmission

The PEA will establish a public company (Palestine Energy Transmission Company Limited PETL) which would eventually own, operate and develop the transmission network.  The board of the PETL would enter into power purchase agreements with independent and semi-independent generating companies and from neighboring countries and would sell power to regional distribution utilities.  PEA held negotiations with the Swedish international Development Corporation Agency (SIDA) to finance the building of transmission lines in the Gaza governorates as a first step in building the integrated electrical system.  SIDA has expressed interest in funding a transmission system in Gaza based on the plans prepared by NORCONSULT funded by NORAD pending that one or more of the following three options is realized:  

Own power production in Gaza.  

Agreement with neighboring countries (i.e. Egypt) on bulk supply of power

(Long term) agreement with Israel for delivery of power on high voltage level.

  There are a number of interconnection possibilities between the developing PEA grids in the West Bank and Gaza and the neighboring countries.  Consultant studies show that a high voltage network is required to securely interconnect the different grids in the region.  The PEA has determined that the transmission level should be 220kV and that the system should include a load dispatch center. 

  The overall objective of the project is to sustain economic and social development in the Palestinian territories.  Another overriding objective is to reduce Palestinian dependence on power supply from Israel by building an independent, sustainable and reliable power supply system for the Palestinian Authority.  The prime purpose of the Gaza transmission project is thus to compliment the planned Gaza generation project and the on-going rehabilitation program for the distribution network.

  The construction of a backbone 220kV-transmission system in Gaza is of high priority to the Palestinian Authority for the following reasons:

·    To meet the dispatch requirements of Gaza Power plant and satisfy the increasing demand from consumers of electricity.

·    To meet the power supply requirements of large infrastructure projects such as airport, harbor, industrial zone, sewage treatment plants and desalination plants.

·    To enable interconnections with neighboring countries.

·    To relieve the load of over-utilized 22kV feeder lines.

·    To enhance controllability and security of the system through installation of a load dispatch center.

  The implementation time needed for the transmission project is estimated at 15-20 months.  The implementation of the transmission component should go hand in hand with the construction of the power plant.  

Distribution

  In order to reduce the network fragmentation and increase efficiency, the existing fragmented distribution system will be consolidated into three new commercially oriented regional utilities, one in Gaza and three in the West Bank (including Jerusalem District Electricity Corporation).  The three new utilities (Gaza Electricity Distribution Corporation currently in operation, Nablus Electricity Utility, and Southern Electricity Company) would be owned jointly by the PEA, the municipalities and village councils in the respective regions.  The new utilities would own the distribution networks, be responsible for service delivery and operations within their regions.  They would do so within the overall policy framework established under the LSP and as administered by PEA.  While privatization of the utilities is not considered practicable at this stage, provision would be made for significant private participation within (5) years.

 

 

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  E-Mail : pea@palnet.com

 

Palestinian Energy Authority:

Main Office PEA. :     Gaza -P.O Box 3041/ Tel: 972-7-2821702 , Fax : 972-7-2824849

                                        Al-Bireh-P.O. Box:3591 / Tel: 972-2- 2986190/2 , Fax:972-2-2986191