Full Breakdown
Data-Center Policy Clash Highlights Israel’s Energy Debate
9/10/2026, 1:32:10 AM
Core Dispute Over Regulatory Hurdles
At the 11th Energy and Economy Conference, Prof. Avi Simhon, head of the National Economic Council in the Prime Minister’s Office, accused officials in the Finance Ministry, the Electricity Authority, and the Energy Ministry of creating bureaucratic obstacles that threaten the construction of new data centers. Simhon argued that the Electricity Authority’s decision to halt acceptance of new data-center applications and its insistence that such facilities rely solely on renewable energy run counter to the government’s broader energy strategy. He characterized the stance of Amir Shavit, chairman of the Electricity Authority, as “nonsense” and suggested that the officials are using “false leaks” to impede progress.
Government’s Energy Allocation Targets
Simhon presented data indicating that the current government plan aims to allocate up to 20 % of Israel’s electricity supply to data centers—a figure he said would be reduced to no more than 2 % if the Energy Ministry, Electricity Authority, or Budget Department were left to decide. He noted that the administration has approved the construction of new power plants whose output would represent roughly a quarter of the nation’s current electricity generation. According to Simhon, gas-fired power-plant capacity is projected to increase by 20 % to 25 % by 2031, eliminating any anticipated shortage.
Official Responses
The Electricity Authority publicly announced that it would stop accepting new data-center applications, citing concerns over energy availability and a preference for renewable-only supply. Simhon countered that the government’s decision in February to approve additional power-plant sites demonstrates confidence that sufficient electricity will be available for data-center expansion. He also emphasized that the Energy Minister has aligned with the view that data-center development should be encouraged.
Potential Impact on the Tech Sector
If the government’s 20 % allocation proceeds, Israel could see accelerated growth of its data-center ecosystem, attracting foreign investment and supporting the country’s reputation as a tech hub. Conversely, continued regulatory resistance could delay projects, increase costs, and push developers to seek locations with more predictable energy policies. The outcome of this policy clash will shape the balance between energy planning and the nation’s digital infrastructure ambitions.
