Three Chinese engineering giants – Harbin Electric International (HEI), China Harbour Engineering Company (CHEC) and THCC – are emerging as dominant players in Israel’s electricity market as the consortium has been contracted to build Dalia-2, an 850-megawatt power station near Gedera, at a cost of NIS3.3 billion. They are also signed to deliver Eshkol-“Avshal” in Ashdod, another 850-megawatt facility, this time with German firm Siemens providing the turbines, at a cost of NIS3.8 billion.
Both plants will be powered by natural gas and use state-of-the-art combined-cycle “H Class” technology, marking a generational leap in efficiency and capacity. The projects are being developed by Dalia Energy, one of Israel’s largest private electricity producers.
Industry sources told The Jerusalem Post that the Chinese firms are not only entering the market as contractors but are also gaining critical expertise in operating the most advanced type of power stations in Israel. That concentration of knowledge, they warn, could create long-term dependence on a single foreign bloc.
“They are coming in at a loss, strategically pricing themselves to win tenders,” one senior figure in Israel’s energy sector said. “From their perspective, this is not just about building power plants, it’s about gaining a national foothold. If they win another major project, they could control nearly 15% of Israel’s conventional electricity generation.”
When up and running, the two new stations will account for roughly 10% of Israel’s non-renewable electricity supply.
The growing reliance on Chinese contractors carries several risks, industry insiders argue. Beyond supply-chain dependence, the arrangement could expose Israel to cyber vulnerabilities or allow critical infrastructure to become beholden to geopolitical developments.
“What happens if, during a war, they decide to stop working?” one expert asked. “We are putting a great deal of national security trust in the hands of foreign players.”
Risks and vulnerabilities
The warning echoes broader concerns voiced in other strategic sectors such as ports and communications, where Chinese involvement has raised alarms among Israeli regulators and allies in Washington.
Israel’s electricity needs are projected to soar in the coming decade. The growth of electric vehicles, the construction of new desalination plants, the rapid spread of energy-intensive data centers, and steady population growth all point to a sharp rise in consumption.
That surge will require dozens of new power stations – many of them developed and operated by private firms. For now, Chinese contractors appear determined to capture a large slice of that future.
Some industry experts believe regulators will eventually have to step in, either by capping foreign control of the sector, or by imposing new restrictions on strategic tenders.
“Ultimately, this will not be decided only in Jerusalem,” a senior source said. “If someone with an American accent picks up the phone to the Prime Minister’s National Security Council and says, ‘We’re not comfortable with this,’ Israel will have to respond.”