About National Coal Supply Corporation
The National Coal Supply Corporation (NCSC) handles the procurement of coal and its transportation from source countries to the Israeli Electric Corporation’s coal power stations – the Rottenberg station in Ashkelon and the Orot Rabin station in Hadera.
A government-held company, the National Coal Supply Corporation is under full ownership of the Israeli Electric Corporation.
Background for the Establishment of the Company
The founding of the company in 1981 was brought about by a combination of various elements:
- A demographic increase requiring preparation for an imminent rise in the electricity consumption in Israel.
- The evolution of the Israeli industrial sector, which significantly increased electricity consumption.
- The high costs of fuel oil (mazut).
- The efforts to reduce air pollution levels entailing the use of fuel oil.
- Decreasing dependency on fuel oil, widely controlled by hostile countries.
Upon establishment of the “Orot Rabin” power station, built to extend the manufacturing capacity of the Israeli Electric Corporation, the Israeli government wished to disperse risks in the energy market and ensure that alongside the use of mazut, the Israeli Electric Corporation would also enjoy access to alternative energy sources. Coal was the natural choice due to its availability and cost.
The NCSC employs approximately 30 people and its main activities focus on coal and shipping, both unique international markets.
The coal supplied to the Israel Electric Corporation is obtained from various source countries, such as Columbia, Russia, South Africa etc.
Coal purchase is performed in coordination with the requirements of the Israeli Electric Corporation and includes various types of coal, featuring unique properties and differentiated by several components including carbon, hydrogen, oxygen and organic compounds.
The company cooperates solely with reliable and renowned coal suppliers in the international coal market, and continuously strives to uncover new sources of coal.
While handling purchase contracts, the company handles coal transportation from source countries to the coal power stations in Israel (Hadera and Ashkelon), based on contracts with shipping suppliers for leasing Panamax and Cape Size bulk carriers, each featuring a cargo capacity of approximately 80,000 and 170,000 tons, respectively.
Another area of company activity is the subleasing of bulk carriers. Subcontracts of affreightment serve as a means for cost savings, and also facilitate operational flexibility in the sailing schedule.
Moreover, the company acts as a ship agency for coal ships arriving at Israel’s sea ports, and under this framework, the company provides the ship’s crew with equipment, food supplies, health services and more.
As of 2018, the company’s financial turnover was $ 850 Million.
The NCSC – Future Prospects
As of 2018, coal was a key energy source for electricity production in Israel. Approximately 30% of the electricity consumption in Israel was provided by power stations operated by steam coal.
Following discoveries of several gas sources facing the Israeli shores over recent years, the Israeli government decided to promote the use of natural gas in Israel, with most of it designated for energy production.
In the near future, coal consumption is expected to decline due to the increasing usage of gas.
Utilization of alternative sources such as renewable energy is not expected to affect coal purchase, due to low availability of these sources and high subsidies required for their development.