Israel Limits Data Center Capacity to 200 Megawatts to Protect Power Grid
Israel's Public Utilities Authority is capping new data center capacity at 200 megawatts to prevent grid collapse, as total requested power requests previously surpassed the nation's entire electricity generation capacity.
The Public Utilities Authority (Electricity) is moving to block the construction of massive data centers in Israel, capping the maximum capacity of any new facility at 200 megawatts (MW), according to information obtained by Calcalist. On Sunday, the authority's plenum is expected to publish a regulatory framework for public consultation concerning the connection of data centers to the power grid.
In addition to the 200 MW cap, projections indicate that total data center consumption will reach approximately 20% of Israel's total electricity consumption by 2030. A data center's capacity defines its ability to process data and train or run artificial intelligence models, driven by intense processor consumption and massive cooling systems. While a 200 MW facility is substantial, developers have already submitted connection requests to Noga - Management of the System for vastly larger projects.
For instance, Mega DC, controlled by Tzachi Nahmias, sought to establish a 1,100 MW facility on the site of the former Alliance tire plant in Hadera, which operated until 2024. Similarly, SDS, controlled by Yossi Scheinfeld, requested an 875 MW facility in Nesher. These are among the applications that cannot be approved under the new regulation.
According to plenum officials, a maximum capacity of 200 MW will allow for a greater number of data centers while safeguarding the power grid. A sudden failure at an ultra-high-capacity data center could disrupt the frequency of the power grid, causing widespread blackouts.
Global demand for artificial intelligence data centers triggered a race among Israeli entrepreneurs, who rushed to submit grid connection requests to Noga. However, the cumulative backlog of applications threatened to collapse Israel's power grid. The total capacity requested reached 27,000 MW, whereas Israel's total electricity generation capacity stands at 18,800 MW.
Israel's average electricity consumption hovers around 9,000 MW, with peak consumption hitting 17,300 MW in August 2025. In other words, the requested data centers alone would require more electricity than Israel's entire generation capacity. Furthermore, unlike factories, desalination plants, or other heavy energy consumers, data centers cannot simply be shut down, and their energy consumption remains constant around the clock because tech giants like Google, Microsoft, and OpenAI demand absolute operational reliability.
In June, the Public Utilities Authority pressed the brakes by halting the processing of new data center applications for 140 days to conduct internal reviews. Surprisingly, the upcoming draft does not include geographic restrictions on data center locations, meaning developers can still submit proposals in high-demand central areas or the periphery.
