Prof. Avi Simhon, head of the National Economic Council in the Prime Minister's Office, launched a harsh attack against officials in the Finance Ministry and the Electricity Authority over the bureaucratic obstacles he claims they are creating for the construction of data centers.
Speaking at the 11th Energy and Economy Conference, Prof. Simhon said: "Amir Shavit (Electricity Authority chairman, Y.S.) is putting out all kinds of nonsense. He is here, and he has ways to respond. He does it through all kinds of false leaks. Officials in the Energy Ministry and the Budget Department decided to try to block data centers out of fear that there will not be enough energy. It is much easier to put obstacles on demand, but the government decided otherwise."
Responding to the Electricity Authority’s announcement that it would stop accepting new applications to establish data centers, Prof. Simhon said: "If an official says there is no energy, and that we will not build data centers and will put up regulatory hurdles because it is unclear whether there will be enough energy, then the government has failed. The battle began last winter between the Budget Department and the Electricity Authority and some Energy Ministry officials, who demanded placing hurdles against the PMO, which opposed them. The energy minister stood firmly alongside those who believe we must encourage the establishment of data centers."
According to data presented by Simhon, there is an intention to allocate up to 20% of the electricity supply to data centers. "This is a very ambitious goal," he said. "If you had let officials in the Energy Ministry, the Electricity Authority, or the Budget Department decide, their target would have been no more than 2%. The current government decided and approved the construction of power plants with production equal to nearly a quarter of the current output. Many municipalities put pressure on the government, but the government did not yield and approved all the sites for power plants."
Simhon added: "Today that is no longer an excuse. By 2031, the supply of electricity generation in Israel through gas-fired power plants will grow by 20% to 25% from current capacity. There will be no electricity shortage. The outrageous proposal by the Electricity Authority that data centers use only renewable energy stands in contradiction to government decisions from February. The Budget Department tried to limit data center construction, and now they are using renewable energy as an excuse. The Electricity Authority essentially said 'no' to the government decision. Whoever does not want to take responsibility simply imposes restrictions. The Electricity Authority also stopped accepting new applications. Most of the 27,000 applications for data centers are not serious."
In conclusion, he said: "The fact that anyone and everyone can submit an application clogged the system. Therefore, the government decisions must be adopted, which established a way to filter out frivolous applications. If we do not get our act together and know how to remove the obstacles to building data centers, we will find ourselves in a very, very big problem in the future."