Minister of National Infrastructure, Energy, and Water Resources Yuval Steinitz today published a new policy that will add a 1,600-megawatt quota to the Israeli electricity sector. The Public Utilities Authority (electricity) has prepared a plan for implementing the new policy. As reported exclusively in "Globes," the new quotas will be allocated to solar energy facilities, mostly on rooftops, but also on the ground.
Israel is lagging substantially behind the targets its set in renewable energy. Only 3% of all electricity in Israel is produced from renewable energy sources, compared with a 10% target for 2020. 1,000 megawatts of the 3,600-megawatt total has already been built (the vast majority of which consists of solar energy facilities), and projects under construction amount to another 700 megawatts.
The project, which consists of privatization of electricity production, enables home consumers, local authorities, and businesses to produce solar electricity. The project is designed to produce 1,600 megawatts.
Approval of solar energy quotas has been approved in very small amounts of a few dozen megawatts to date. This time, the state is planning to add an enormous amount within a relative short time three-year period. According to the Public Utilities Authority (electricity), most of the new quota will be for solar facilities on rooftops of households and businesses. Solar panels require a great deal of space, and Israel is a relatively crowded country. Rooftop facilities therefore have great potential, which has hitherto not been utilized. Solar facilities have been installed on only 6,000 of Israel's two million rooftops. There were many reasons for this: bureaucratic problems pertaining to the installation, taxation, a high price, financing problems with the banks for building facilities, and lack of awareness among the public.
"In the framework of the plan, the Public Utilities Authority (electricity) will streamline the process of connecting and building solar facilities, among other things by simplifying and easing the process of opening a file for connecting facilities and reducing the number of visits by Israel Electric Corporation (IEC) (TASE: ELEC.B22)," the Public Utilities Authority (electricity) announced.
One of the important innovations in the plan that makes building a facility more worthwhile is the possibility of receiving payment for electricity produced beyond what is consumed by the owners according to a predetermined rate.
Solar roof panels, for which most of the new quotas are designated, will be of two types: facilities for small roofs of private homes or apartment buildings and large roofs of businesses. The rate for large roofs, such as factory roofs, hospitals, and businesses, will be set in a competitive procedure in auctions conducted by the Public Utilities Authority (electricity). These will be the first such auctions to be held in Israel.
Small rooftops, on the other hand, will receive a "feeder" rate to be set by the Public Utilities Authority (electricity) without any competitive procedure. The electricity produced from such a roof will not be consumed; it will be streamed to the electricity grid, and the facility owner will receive payment for it. This rate will be higher than the rates set in the auctions for large roofs and land stations, because the Public Utilities Authority (electricity) believes that it is also necessary to support facilities on small roofs that are less economically viable than a facility on a large roof.
The rate for all types of facilities (small and large roofs and ground facilities) will be fixed, and will be paid throughout the 20-25-year lifespan of the facility. This will make it easier to obtain bank financing for building a facility.
The Public Utilities Authority (electricity) emphasizes that it will continue to utilize the remaining quota for wind facilities. It stated, "Only part of the wind energy quota will be utilized by 2020 as a result of the prolonging of the statutory procedures and the relatively long time required for connecting the wind energy farms to high-tension wires." Israel's unutilized potential for wind energy is estimated at 1,000 megawatts. As of now, there is only one active wind turbine, located in Tel Asaniya in the Golan Heights. 15 more projects are still in the planning stages.
Steinitz said, "Our policy is based on environmentally friendly energy for the benefit of public health, with ambitious targets being set. The plan includes benefits for solar energy from apartment buildings for the sake of people's benefit and lower costs. We're bringing important news today to households - we're making renewable energy accessible to them. They will be able to produce free electricity from the sun for their consumption and use."
Public Utilities Authority (electricity) chairperson Dr. Assaf Eilat added, "The Public Utilities Authority (electricity) is committed to a major increase in the quantity of renewable energy produced in Israel, in accordance with the policy by the minister and the government. In the coming weeks, the Public Utilities Authority will continue to publish aggressive regulations and auctions for building renewable energy facilities."
Published by Globes [online], Israel Business News - www.globes-online.com - on November 26, 2017
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