AI boom hits Israel’s power grid as regulator freezes new data center connections

Israel's Electricity Authority has frozen new applications for connecting data centers to the national grid for 140 days, citing a surge in requests that threaten grid stability. The authority stated that connection requests represent a potential demand of approximately 27,000 megawatts, three times Israel's current average consumption, and exceed the system's capacity. Noga, the electricity system manager, had warned that approving more connections could jeopardize grid stability. During the freeze, the authority will reassess evaluation assumptions, including impacts on reliability, redundancy, competition, prices, and natural gas consumption. Currently, committed server farm connections total about 1,500 megawatts, which could account for 10% of Israel's total electricity consumption by the early next decade if fully realized. This decision follows a proposed regulatory framework aimed at curbing speculative applications and potentially allowing temporary disconnections during peak demand.