CleanIsrael» Avner

Interview with Yosef Abramowitz, CEO of Arava Power

Avner — Mon, 19 Apr 2010 22:53:16 +0000

Yosef I. Abramowitz specializes in public policy, government relations, press, technology and corporate strategy.

He has a successful track record in government relations, having led a major effort that won $7 billion in benefits, as well as international campaigns for various issues. With degrees in Public Policy from Boston University and Journalism from Columbia University, Yosef most recently served as CEO of a multimedia company for a decade.

Winner of numerous awards, Yosef has an extensive global network, having served on the Executive Board of the World Jewish Congress and in other positions. He has been co-nominated three times for the Nobel Peace Prize for his work in the former Soviet Union, which was underwritten by the European Union and U.S. AID.

Yosef is based in Boston, and has relocated to Kibbutz Ketura with his wife, Rabbi Susan Silverman, and their five children. His interest in solar power began in high school, where he received a regional award for a solar energy project.

On Arava Power…

Avner	*Hi Yossi, it’s a pleasure to meet you and thank you for hosting me at your office for this interview.* *Tell us a little about Arava Power?*
Yossi	Arava Power is the first green utility in the Middle East. We are technologically agnostic and that is a very important piece of our strategy. We will always use the best technology available that is appropriate for each specific location and that works with the specific regulatory environment.
Avner	*Arava Power has run a significant round of the Israeli bureaucratic obstacle course over the last couple of years – tell us a little about it:*
Yossi	Two and a half years ago we decided we are going to push the Arava Power project ahead – everyone said it can’t be done – you can’t get a license for solar you can’t get a building permit for a solar field you can’t do the zoning etc. Despite everything we just kept pushing along and at each stage every government office and every committee had to create the process to allow the Ketura 80 dunam 4.9MW field to advance forward. There are 25 political and regulatory battles to be fought for anybody who wants to build a commercial solar field in Israel. On January 4^th 2010 we won the 25^th battle (the Public Utility Authority passed the feed-in tariff of 1.49 for commercial solar fields up to 5MW), of-course this is not the end of the story, there are still more battles to be fought. For example, the National Building and Planning commission is in the process of coming up with regulation for rezoning agricultural land so that it can be used for solar fields, there’s currently no normative process in Israel to do that in a way which will be fast. In contrast to Europe where it takes 4 to 6 months for rezoning, in Israel it takes 3 years if you’re lucky. So we effectively created the political necessity for all 12-14 government offices to essentially do what they need to do to create the environment so that it would be a reasonable thing to plan, build and interconnect commercial solar fields in the state of Israel.
Avner	*Once this industry matures and more players join the market what elements will the competition be based upon?*
Yossi	Well, technology plays an invaluable and critical role but once you know what your technology is it becomes in fact a real-estate deal. Whoever has the best land, in the sunniest regions, closest to the right transmissions lines will create the most demand for new technologies to be created and will make the most money.

On solar technology PV and Solar-Thermal…
Avner	*Being technologically agnostic – exactly how do you choose your technology?*
Yossi	Every panel manufacturer makes all sorts of claims about how much energy their panels produce. The sun conditions in the Arava are quite unique therefore we didn’t rely upon anyone’s assumptions but rather wanted to test out these things for ourselves. For over two years now we’ve been running a small alpha test site together with the Arava Institute for Environmental Studies, the Brian Medved Alpha Solar Center. We have off-course limited our testing only to technologies that are bankable.
Avner	*Can you explain the term “bankable technologies” in this context?*
Yossi	To do commercial solar fields is a very expensive infrastructure cleantech endeavor, you need to put down 20% and borrow 80%. To do this you need a bank that believes that for 20 years the technology is going to work well in a predictable way so that you can repay the loan and also the investors can make money. Because of the necessity for bankability you can’t really get too creative on which technologies you’re going to use at this stage. Banks in general are conservative and Israeli banks are notoriously so therefore we need to go on bankable and certified technologies for now.
Avner	As a solar utility you have obviously analyzed the various available solar technologies from the efficiency, financial and regulatory perspective, tell us more about the considerations regarding use of solar thermal technologies in contrast to PV solar: (14.00)
Yossi	As I said earlier solar-thermal needs larger scale in order to get the efficiencies you get from PV. With that, the issues that solar-thermal utilities are running into are not related to space but rather to the problem of the amount of water needed for the cooling systems. For this reason, in Israel there needs to be regulation that discourages water cooled systems and encourages air cooled. The problem is that air-cooled systems are less efficient so you need a higher feed-in tariff, for now, in order to get a good parity. Right now there is a public hearing proposal in Israel for solar thermal plants up to 60MW and above 60MW – the proposed tariff is 90 Agurot ($0.24) for over 60MW which is not worthwhile and 1.05NIS ($0.28) for under 60MW which is way too low. It’s too low in general if water cooled systems are available, water cooled systems being cheaper than air cooled. We all have till the end of January to give our feedback on this proposal and then eventually they’ll announce feed-in tariffs for large fields. Now what they want to do is to take the large tariff for solar thermal and apply it to PV which is also ludicrous. No country in the world has the same large-field tariff for both PV ad solar thermal. This is basically an indication to the fact that they don’t have a real commitment to large PV fields and frankly they don’t commit to large solar thermal other than the ones which use a ridiculous amount of water and that is just bad public policy and part of the learning process. So, as the people who push the envelope, we are going to everything we can to make sure that there is a higher tariff for large solar thermal fields that will encourage air cooling and profitability. As large and as strong as Solel is today that market could grow by leaps and bounds if we also had a domestic market. Why shouldn’t there be a GW of solar thermal plants if we can figure out the zoning and the environmental stuff. So the tariff will encourage that and then once there is a local demand you’ll find all sorts of innovations and efficiencies that will be created through Solel and other companies.
Avner	*Siemens owns 40% of Arava Power and 100% of Solel, the Israeli solar thermal company, are we going to see Solel solar thermal fields implemented in Israel?*
Yossi	As I said Arava is technologically agnostic and that means we’ll choose the right technology for the right location at the right time in the market. There is no final permit for any solar-thermal field in Israel. In solar-thermal you need larger scale in order to get the efficiencies, in other words you need 15MW to get to the price point that shows the solar thermal is worthwhile. In order to do that you need 1000 to 2000 dunam – this means getting all the permissions, environmental impacts permits, zoning etc. and there’s not yet a tariff that works with solar thermal in Israel (the 1.49NIS is only for PV up to 5MW, you can’t do 5MW solar thermal today that is bankable). That being said, there is currently a public hearing process in this regard. There’s a great experiment happening today at kibbutz Samar with AORA, a solar-thermal tower at 100KW each tower and we’re very interested to see how that develops because that’s the first modular solar thermal installation. Whether it’s ripe for us and the rest of the market has yet to be seen but the fact that it’s modular may solve some of the land space issues. It’s safe to say that Siemens is very strategic and they know that it’s in their interest to align all of their solar assets worldwide and especially in the Middle East and we look forward to being part of that alignment.

On the position of Israel’s Cleantech Industry…
Avner	*What needs to change in order for Israel to become a leader in the global cleantech market?*
Yossi	Israel has to go through two main phases in order to become a leader in the global cleantech industry. The first phase is to develop “domestic use and demand” and the second is the “innovation” phase, the killer app of renewables if you like. Everyone always wants to jump to the second phase and for that reason there are so many startups looking at a wide variety of very interesting ideas in the Israeli market. What is holding the industry back nevertheless (other than solar thermals which was developed 20-30 yrs ago), is that we have not yet gone through the first phase. Once Israel has domestic use and demand, innovation will accelerate because innovators will have an outlet to pilot, experiment and study under some of the harshest environments on the planet in the south of Israel for example.
Avner	*Are there markets in which we see this logic being applied?*
Yossi	Germany is the world leader in producing renewable energy. Almost 50% of solar power in the world is being produced in Germany which is astounding given that they only have 900KW hrs per sq/m of sunlight in contrast to the Arava where we have 2247KW hrs per sq/m. It’s important to understand that the public policy goal to lower the barriers to entry and invest so much money in a very rich feed-in tariff (what project developers get paid for each KWhr) was not really based so much on an environmental agenda as it was on creating 40,000 new jobs in Germany over the last decade in the space of renewables and particularly in solar. In effect, they created tremendous local demand, consequently thousands of people went into the industry and out of those thousands a portion went into innovation and then manufacturing. So now they are number one in the industry, needless to say, a decade is a pretty short time for such an accomplishment.
Avner	*So how exactly would this work in Israel?*
Yossi	So, as I said, phase one is to create a domestic market – first build hundreds of MW and then GW’s. When you do that the innovation and manufacturing sector wakes up. Once innovation and manufacturing awakens, we would like to see the Israeli government do two things: Firstly, create tax incentives for the developers to buy Israeli technology. This will encourage the local industry by pumping capital into it. If, for example, a developing company needs a little more capital it can come obtain it through an order for 50M worth of hardware – this is a lot better than a research grant from the government. These incentives will effectively enable Israeli companies to compete with the efficiency and cheapness of the Chinese who are very impressively going to dominate the market. Secondly (and this will bring the real revolution), give a loan guarantee to a bank, which will underwrite the financing of Israeli experimental technologies which are advanced but not yet bankable. This will enable developers to effectively showcase the more recent developments in Israeli solar energy without the banks having to take the full risk on the 80% financing. So part one of the revolution is create demand, have a lot of money coming through the market, build expertise. Part two is the regulatory dimension – tax breaks and other benefits for using Israeli technology and in addition, government guarantees to the banks to share the risk of not-yet-bankable Israeli technologies. I believe that there is going to be a game change in the solar market in the next 5 years and once local demand will be created here, it will most likely come from Israel.
Avner	*What does Israel have that makes you so confident that the game-change will come from here and what will change that will make it happen in the next 5 years?*
Yossi	Israel has a unique entrepreneurial culture and it has the confidence of the capital markets and VC’s. Furthermore, almost all universities now have environmental and renewable energy center in the framework of which people will be doing their masters and PHd’s on these issues and out of which many startups will be developing. But as I said, in order for all this to happen we really need a local test market in which to develop it.

On Israel’s role in the global energy shift…
Avner	*What role do you think Israel can play in the global paradigm shift in the energy sector?*
Yossi	I think that there are two things: The first is connected to the question in a post Copenhagen world of how you transform a modern economy from being carbon based to being renewable based and particularly solar based. This has not yet been done – you can’t name one economy that has gone from the one old model and completely transferred to clean energy (I’m not talking about nuclear power). For this reason, there is a lot of trepidation surrounding the issue and this is one of the reasons behind why things fell apart in Copenhagen. We are a small and innovative country and therefore we are able to do revolutionary things quickly – if and when we want to. We are currently at eleven GW; we’ll go up to twenty GW by 2020 which for us is actually still incredibly manageable. Israel can go from last place to first place in the industrial world of renewables in a potentially short period of time. During such a process will learn about so many issues that we don’t even know that we will have to counter along the way. This will essentially make us the proof positive that it is possible and we will know how it may be done. We will effectively be the global pilot for transforming into a carbon neutral economy. The second thing is a security perspective. We have the highest political incentive to end the world’s dependency on carbon because we are in a hostile neighborhood that is fueled by a carbon based global economy. We must figure out how to break that stranglehold.
Avner	*What do you think would be one of the main technological challenges in reaching a clean economy?*
Yossi	The issue will be energy storage – that’s going to be a key and I think that energy storage technology breakthroughs are likely to come from Israel if there is a local demand because then the necessity will be there. Once you get to 10-20% of the grid with renewables that are daytime dependant you must solve the storage question on a systemic national grid basis. If we create the market for that, the innovators in the market will come through.

On the interest of foreign investors…
Avner	*How did the international investor market respond to a project that has such a heavy bureaucratic component to it?*
Yossi	The international investor community never blinked in the three and a half years of our climb. We were first to market in a market that didn’t exist, which meant that almost every major international company that is interested in this space came to visit us, a good percentage of them courted us – we were in a privileged position. Once we scored the license that’s when almost a bidding war began. Even during the financial crisis we had no issues raising capital. I think this is an incredible statement about the belief of the international investor community in the potential of the Israeli market and I think it speaks very well of our management team.
Avner	*And then Siemens came along, what did they offer that made you go specifically with them?*
Yossi	We were very fortunate that Siemens came along when it did. There was an important differentiator between them and the other international investors. Not only did they respect the value that we had created as a company up until now by creating the market and having the first mover advantage but they were also willing to partner in the full sense of the word with the management team. They didn’t come in saying we’re buying you – we’re going to control you, hire and fire you and so on but rather they came in with the attitude of “you guys know what you are doing”. All the other companies either wanted to acquire or wanted to provide capital but at rates that just didn’t appreciate the value that we are creating, the value of creating a market.
Avner	*How did the regulatory breakthroughs affect international investors’ interest?*
Yossi	Now that there’s a feed-in tariff everybody wants to finance projects because once you have a license and a building permit there’s no risk – you’re getting at least a 15% if not higher return as an investor. Israel will be at least a 4GW market that’s $20B. I say to you today that there’s enough interest in the international community to do that if the regulatory environment was up to speed. If we had the zoning right for that much land and if the feed-in tariff on large fields was closer 1.35NIS then 20B will come through this economy between now and 2020, no doubt about it.
Avner	*Finally, when will be seeing the first commercial solar field in Israel?*
Yossi	The work will begin shortly; we hope to see the first commercial field working in 2010.
Avner	*Thanks you so much for you time…*
Yossi	It was a pleasure talking to you.

Interview with Israeli cleantech VC Astorre Modena of Terra Ventures

Avner — Mon, 01 Feb 2010 16:24:57 +0000

Astorre Modena is a co-founder and general partner at Terra Venture Partners, a venture capital fund targeting opportunities in Israeli cleantech companies at the seed and early stages.

Previously, Astorre was a Principal at Israel Seed Partners and prior to that he was with McKinsey & Co., based in Paris, where he consulted to leading Italian, French and Israeli manufacturing and financial corporations.

Astorre holds a B.Sc. in Physics and Outstanding Students Program from the Hebrew University of Jerusalem and a Ph.D. in Plasma Physics from Imperial College in London. He was a researcher in the laser-plasma physics department at Imperial College in London and Ecole Polytechnique in Paris working in their nuclear fusion energy program.

I went to meet Astorre for this interview at the Terra Ventures offices in Jerusalem.

*On Terra Venture Partners…*
Avner	So Astorre, thank you for hosting me at your offices to conduct this interview. I know you are a busy man and we really appreciate it at CleanIsrael. Why don’t you start by telling us a little about Terra Ventures?
Astorre	Terra is a dedicated cleantech fund established in 2007 run by myself and Dr. Harold Wiener and focused on seed and early stage start-ups in Israel. We invest in all the classic cleantech sectors with specific focus on energy, renewable energy, energy efficiency and energy storage with few out-of-the-box exceptions.
Avner	*You’re now entering Terra’s third year of investment – how did you get through the storm?*
Astorre	Terra was relatively lucky to have closed before the crisis. We started investing in the third quarter of 2007 but did only three small investments before the collapse of the financial markets so you can say it’s been a very interesting period. Because of the way we built our companies we were relatively less impacted than other funds. From the outset we start our companies on a very lean budget and that allowed us to fund the companies for longer without having to cut on personnel – this created a much better environment. Though it was difficult, we managed to raise external funds for our two initial companies even during the worst times and that allowed our companies to progress nicely even through the tough times.
Avner	*Have you been investing in new deals or re-investing into your portfolio companies?*
Astorre	We invested more in new deals (six just this year) because we believe that economic downturns are the best times to invest in new companies. Core valuations and competition are down, it’s easier to recruit new talent, easier to do things cheaply (materials, equipment) and entrepreneurs are more focused so you can create better companies. Financial planning in these cases is key as it is crucial to reach significant milestones with limited resources since it is going to be difficult to raise outside money.

*On the Israeli cleantech industry…*
Avner	*Cleantech is considered a capital intensive industry – how does your strategy align with your portfolio’s need for more capital?*
Astorre	Cleantech is an extremely wide and broad enough industry that you can find significant billion dollar sub-sectors which are capital-efficient where you don’t need the level of capital that you might need for big projects companies and that is where we focus our investment strategy. Our model is all about capital-efficiency and I think that Israel is also very good at doing more with less and this has been proven in the high-tech industry.
Avner	*How would you summarize the current situation of the Israeli cleantech industry?*
Astorre	In general there is a systematic lack of money especially on the early stage side because many of the angels and some other investment groups have disappeared so most of the deals are done by three dedicated funds and a few by the generalist funds. On the other hand, we are seeing many more deals in Israel then in the past so the result is that there are many worthy companies out there that have difficulties in raising money.
Avner	*Is there a serious and competitive cleantech industry developing in Israel?*
Astorre	The potential is out there but Israel needs a critical mass of funded companies in order to develop a healthy and competitive industry. Since more than half the companies won’t survive we need to have more funded companies so that we can reach that critical mass.
Avner	*Where do you think the capital needed to fund the industry will be coming from?*
Astorre	The first thing is that Israeli generalist VC’s need to get more seriously involved and committed in cleantech. In the US and Europe, most generalist funds are developing a serious cleantech focus and expertise within their establishment. I am not talking about someone who once a week looks at opportunities, that won’t work. In Israel we are seeing that the generalist VC’s are still investing very opportunistically with no clear strategy. The second thing I’d like to see is more foreign players in Israel. I believe the trend is already happening; there is great interest from foreign investors though unfortunately because of the bad year we’ve had overall we are only seeing sparse results.
Avner	*As the economy recuperates, do you think will we see a bubble develop in this industry?*
Astorre	You never know but I don’t believe that will happen in the next year or so. I think that except for a couple of exceptions, the numbers in the market look more solid. Solar which was probably one of the more inflated sectors has now gone down significantly. There is a huge over-capacity in solar for the next year of two so I see no potential bubble, quite the opposite; I see consolidation if not bankruptcy in that sector over the next few months. On the start-up level as well, apart from some outliers, most valuation have gone down to much more reasonable terms and in view of the supply-demand of capital I do not see them going up significantly in the next couple of years.
Avner	*What relative advantage does Israel have to offer in the cleantech industry?*
Astorre	First and foremost is the amazing level of entrepreneurship in Israel together with the multidisciplinary and flexible nature of Israelis in that they are able to quickly move from one field to the other. These transitions contribute to cross-fertilization of technologies and solutions between sectors and industries. Many cleantech projects are very multidisciplinary and the cleantech industry is a generally mature and slow market which hasn’t been dynamic in the last 20 to 30 years, so when someone from IT, software or telecom who has a culture of bringing innovation every month moves into cleantech he can bring “out-of-the-box’ concepts without the preconceived ideas which are deeply rooted in the industry.
Avner	*How do you think Israel can become a leader in the industry?*
Astorre	With the proper resources Israel can repeat the success it has achieved in high-tech thanks to the key expertise we have in solar, water, smart sensors, smart agriculture, biotech, materials coupled with our innovation, multidisciplinarity, entrepreneurship and the full start-up friendly ecosystem we have inherited from high-tech.
Avner	*What are the biggest challenges to the Israeli industry?*
Astorre	One of the challenges of cleantech compared to most sectors in high-tech is that cleantech is more of a “local” industry where different countries have different needs, regulations and physical conditions that have to be considered when implementing new infrastructure and technologies. For these reasons there is an importance in knowing the local issues of the target market. Also it is difficult to do a remote beta like you can do in software and sometimes like in wind you don’t have any local player to do a home, “friendly” test. With all this Israelis are particularly global-thinking compared to other countries so that at the end of the day, while the initial steps might be more difficult, it is easier to become a global company.

*On potential foreign markets and foreign investment in Israel…*
Avner	*Is the Israeli industry focusing on foreign markets and if so which ones specifically?*
Astorre	As I mentioned before it is a must for Israeli companies to have a global perspective especially due to the neighborhood in which Israel exists, and that makes them focus from day one on foreign markets. Although Asia should play a bigger role Europe is currently the first market for cleantech, with the US catching up. This of course is a generalization as each sector in cleantech has specific trends but this can give a general idea. As the Asian market grows and Israeli companies become more sophisticated and networked, it will definitely be the most interesting market provided one knows how to “play” it.
Avner	*What kind of foreign investors are we seeing getting interested and involved in the Israeli cleantech industry?*
Astorre	Most top US VCs have already started to check the Israeli scene seriously. As Cleantech is relatively new for most of them as well it might still take a few years to reach the high-tech level of foreign activity and it will probably be more focused in later stage deals. Eventually I believe we will also see more European players getting involved as there are quite a few dedicated players there so the potential is higher than in high-tech where European VCs are not in good shape. As for strategic players, most of the ones we are dealing with in this industry, in contrast to high-tech, are much less used to scouting innovation, investment and acquisition than the usual high-tech players. Apart from GE and partly Siemens there are very few players who have a track record or an infrastructure for strategic investment and acquisition of start-ups, although this is improving with time. This is a challenge for us since in Israel M&A is the most classic exit. Nevertheless, the ones that are active have recognized Israel as a key innovation spot for Cleantech and are coming here on a regular basis.
Avner	*Finally, what would you say to a foreign investor interested in Israeli cleantech?*
Astorre	There is a great opportunity in Israel. Compared to the US we have a lot more deal flow per $ invested in the field and what happened in High-Tech in the ‘90s is happening in Cleantech here but much more quickly.
Avner	*Thank you once again for the fascinating chat…and for the coffee.*
Astorre	It was a pleasure, good luck!

Environmental benefits of Electric Vehicle and its Contribution to Reducing Greenhouse Gas Emissions in Israel

Avner — Sat, 09 Jan 2010 16:29:44 +0000

The recent conference on global warming in Copenhagen, and two reports published recently which analyze and discuss the environmental benefits of electric vehicles (“Electric and Hybrid Vehicle” of the Neaman Institute, and “Potential of Reducing Greenhouse Gas Emissions in Israel” written by McKinsey & Company by commission of the Israeli Ministry of Environmental Protection), are an opportunity to discuss the possible contribution of the electric vehicle to improve air quality and reduce greenhouse gas emissions in Israel.

Overall Environmental Contribution – the Balance of Total Emissions

There is basic agreement in both these reports, as there is in the research and the many articles published in recent years, that the local contribution of the electric vehicle (especially in the urban environment) to the improvement of air quality is absolute and fundamental. However, the overall environmental contribution depends on the balance of the total emissions and this must take into account the energy sources that are used to generate the electricity. Unfortunately, in both abovementioned reports reference to this balance was not included.

The first recommendation in the Neaman report is to ensure that large-scale introduction of electric vehicles will be based on a managed charging infrastructure which will be able to prevent further loading of the electrical grid during peak consumption. This is true in any country but especially in Israel which due to political circumstances constitutes an “energy island”.

Analysis performed by the electric company determined that, in contrast to other scenarios which will require construction of additional power plants, a managed charging infrastructure will allow the penetration of two million electric vehicles by 2020 without the need for the construction of any additional power plant beyond the existing development plan. This of course has significant environmental implications with regard to the ability of increasing the efficiency of existing infrastructure, without the need to capture more open space which is a limited resource in Israel.

The McKinsey report, which focused on the potential of reducing greenhouse gas emissions, determined that of all technologies they analyzed to reduce greenhouse gas emissions in the transportation sector, electric vehicles have the greatest potential for reduction per km.

Even after the implementation of technological improvements by 2030, gasoline vehicles will emit 152 grams of carbon dioxide per km, diesel vehicles will emit 141 per km and hybrid vehicles will emit 138 per km, while the electric car can go down to 100 grams of carbon dioxide per km in a scenario whereby 25% of electricity production in Israel is generated from renewable energy.

The report also states that even without reaching 25% renewable energy in the electricity generation mix, the electric vehicle does not fall short in potential reduction to the other technologies. In addition, it should be noted that the electric vehicle is the only technology that can further reduce the amount of emissions per km depending on the electricity generation mix, and even reach zero once it is based on 100% renewable energy.

Initial Investment, Annual Cost and Cost Effectiveness

The McKinsey report deals with the issue of the initial investment and the annual cost required for each tool, and projects this cost on the cost effectiveness of the tool.

Without going into discussion about the values themselves, McKenzie’s premise is that all extra cost will be expressed in the vehicle price and would therefore constitute a cost for the economy. McKinsey’s model makes no distinction regarding who bears the additional cost, if it indeed exists, and it is important to note this in light of the importance of the subject matter.

According to the model of “Better Place” for example, the cost of infrastructure and most of the extra cost of the electric vehicle itself is assumed by the company and therefore cannot be considered a cost to the economy. In fact, if the business model of “Better Place” will indeed enable a lower cost per km compared to using a gasoline vehicle, then the cost to the economy of reducing greenhouse gas emissions is zero and possibly negative.

The Pace of Market Penetration

That same analysis is also lacking with regard to the pace of market penetration of electric vehicles. If the end customer is not exposed to additional cost compared to gasoline vehicles, then the assumed penetration rate of 10% in 2030 is extremely low.

Even according to the latest forecast published by the International Energy Organization (IEA) less than a month ago, in 2030 sales of electric vehicles will constitute about 30% of the total world market. If these are the numbers predicted by such a conservative organization then there is no question that the penetration rate can be higher and so will the reduction potential of this tool.

The Improved Internal Combustion Engine Option

McKinsey states that the tool with the greatest potential for reduction in the transport sector in Israel is an improved internal combustion engine vehicle. If we again ignore the numbers themselves then we are debating around a medium upon which the State of Israel has no control.

Manufacturers may meet the discussed emission levels and they may not, but since there is no automobile industry in Israel, you cannot rely on this tool in establishing a national reduction strategy. However, Israel does have control over the fuel mix of energy sources used for electricity generation and therefore the state must do its utmost to encourage penetration and implementation of these technologies by utilizing local resources. Such activity will reduce greenhouse gas emissions from the electricity sector and have an indirect influence on all electricity consumers, including the electric vehicle.

Electric Vehicles as Energy Storage Facilitators and Network Stabilizers

Another interesting advantage which arises in both reports is the ability of the electric vehicle to facilitate energy storage. One of the limitations of large-scale penetration of renewable energy technologies is the fact they are intermittent in nature (electricity generation depends, for example, on sun and wind intensity which vary throughout the day).

McKinsey consultants also explain that in the analysis of the cost of application of solar and wind technologies they added, due to this limitation, an additional cost for network backup and stabilization. These systems, especially for Israel’s isolated electrical grid, may be even more vital than in other Western countries where the networks are stabilized through connections between different countries. In the scenario of large-scale penetration of electric vehicles, the managed charging infrastructure has a potential to serve as a leading contributor to network stabilization. Because private vehicles are in use for an average of about two hours a day, the electric vehicle is a very flexible consumer that can be used as a storage facilitator and stabilizer for most hours of the day. This contribution can reduce the cost of penetration of renewable energy technologies and strengthens even more the synergy between these two mediums.

The Bottom Line

Environmental challenges are handled faster and more efficiently when there is congruence between business interests and environmental goals. The two sectors responsible for most emissions of air pollutants and particularly greenhouse gases are energy and transport, and in both of these, demand is expected to rise significantly. Therefore, Israel will do well to allow maximum utilization of local resources in the field of renewable energy and complementary tools such as electric vehicles.

* Ofer Ben-Dov is a renewable energy expert with vast experience conducting feasibility studies, developing environmental business strategies and management systems as well renewable energy and carbon programs.

He serves as Sustainable Energy & Carbon Director of Assif-Strategies Ltd which specializes in cleantech initiatives and renewable energy as well as in providing environmental strategic consulting services for industry, businesses and financial institutions and as CTO of Elysium – Carbon Trade & Investment, an Assif-Strategies subsidiary.

Ben-Dov has a graduate degree in Business Strategies for Renewable Energy and a diploma in Business & Environment from York University, Canada. His research on renewable energy business strategies earned him the prestigious International e7 Sustainable Energy Development Scholarship.

Previously, he served as campaign director for Greenpeace Mediterranean in Israel and was a founding member of The Natural Step in Israel. He is a Member of the Energy & Agriculture Steering Committee of the Israeli Ministry of National Infrastructure and the Ministry of Agriculture.

Ex-CTO of GE Water Dr. Ramesh on Israel’s Cleantech Sector

Avner — Fri, 11 Dec 2009 18:07:18 +0000

CleanIsrael recently hosted ex-CEO of GE Water Jeff Garwood and ex-CTO of GE Water Dr. Rengarajan Ramesh for a roundtable discussion with CEOs of some of Israel’s leading water startups. After the event and vibrant discussion, we asked Dr. Ramesh to give his thoughts on Israel’s cleantech sector.

Israel offers great potential and opportunity for countries around the world who are facing serious water shortages as well industrial pollution of their precious water resources. Israeli government and their policies have guided the water industry to look seriously at innovations and application of these innovations to help address their water challenges and the local water utility Merkorot has helped to ” test bed” the early technologies and help validate the value proposition of these innovations.

The Office of Chief Scientist along with the Government has established “incubators” and helped to fund innovative ideas and provide a platform to develop innovations. These incubators take the technologies developed at the Universities and the research institutions into pilot scale which can then be commercialized through investments from other venture capital firms.

Such innovation ecosystem model is unique and has resulted in several successful ideas to be commercialized from Israel.

Based on my past five years experience working with early stage companies from Israel, it is evident that these companies have leveraged the support system provided by the Universities, government, and the industrial incubators well and this is a model that other countries can adopt and modify to meet their needs.

Collaboration and Partnership is critical for success especially for early stage start up companies. Israeli companies can benefit from collaborating with international and domestic companies to define the technology merits and value proposition early in the process to avoid hurdles later.