Energy Minister: No coal use in Israel after 2030

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BDO: Every year of delay in reducing the use of coal causes environmental and monetary damage to the economy.

"I have learned that we are headed for an environmental and health catastrophe. Within 20 years, we will be the most densely population country in the West," Minister of National Infrastructure, Energy, and Water Resources Dr. Yuval Steinitz told journalists. At the briefing, he unveiled his ministry's targets for 2030. Steinitz's plan sets an ambitious target for the energy sector: complete and absolute elimination of the use of polluting fuel over the next 12 years - zero coal production and an absolute ban on imports of cars using pollutant fuel, starting in 2030.

Steinitz has publicly reiterated his targets a number of times, but the operative plans have not yet been adapted to them. In the roadmap for the energy industry prepared by the Public Utilities Authority (Electricity), the targets for 2030 are completely different: coal will account for 13% of electricity production in 2030.

The Public Utilities Authority (Electricity) takes issue to Steinitz, writing, "In order to close or convert the coal units, it is necessary to verify that the shore gas capacity is adequate and to ensure redundancy in the supply of gas. Without a regasification vessel, in a scenario in which coal capacity is converted to gas, there will be a shortage of gas in 2030 equivalent to 2-3% of yearly electricity production."

Uncertainty about electric vehicles

There is also a huge gap between Steinitz's decision and implementation concerning electric vehicles. The Public Utilities Authority's (Electricity) roadmap assumes that Israel will have nearly 500,000 vehicles powered by electricity in 2030, while Steinitz's plan gives a number three times as high - 1.4 million.

The minister's plan mentions a ban on imports of cars, heavy vehicles, and buses powered by polluting gasoline and diesel fuel by 2030, while the Public Utilities Authority (Electricity) states in its plan, "The penetration rate of electric vehicles is one of the main sources of uncertainty in the demand forecast.

"After in-depth consideration of various scenarios, the Public Utilities Authority (Electricity) assumes that Israel will have 500,000 electric vehicles in 2030, while there are three million vehicles currently traveling on Israel's roads. Minister of National Infrastructure, Energy, and Water Resources Yuval Steinitz believes that the number of electric vehicles will be higher. Steinitz said in the past that imports to Israel of gasoline and diesel fuel-powered vehicles will be banned in 2030."

As of now, the minister's plan has not been anchored in a binding work plan. Only after the public is consulted and its comments are obtained can it become a cabinet resolution. At the same time, it is important to emphasize that making the minister's optimistic vision a reality requires a work plan for the energy sector corresponding to the minister's targets.

Chen Herzog, chief economist of BDO Consulting, which provides consultant services to private electricity producers, believes that the gap between these two plans mandates 4,000 megawatts in added electricity capacity in 2030.

According to Herzog, closing down coal-fired power plants will require construction of power stations with a capacity of 3,000 megawatts, while the addition of one million electric vehicles will require 1,000 megawatts in additional capacity. "The energy minister's policy of halting production of electricity from coal is very economically and environmentally worthwhile, and matches the trends in Western countries. The UK, the coal miners' homeland, will completely discontinue production from coal by 2025," Herzog told "Globes."

"Every year of delay costs NIS 1.5 billion"

"According to BDO's estimates, at current energy prices, the profit for the national economy from closing down coal-fired power plants and switching to electricity production from gas and renewable energy sources is NIS 1.5 billion a year. Every year of delay in reducing the use of coal causes environmental and monetary damage to the economy. Closing down coal-fired plants should therefore be brought forward, without waiting until 2026-2028, as in the Ministry of National Infrastructure, Energy, and Water Resources document. In order to enable the economy to supply the production needs according to the minister's document, the roadmap should be changed and supporting regulation should be formulated now."

The Public Utilities Authority (Electricity) said in response, "The roadmap document is revised from time to time according to economic developments and the policy of the minister and the government. It was written according to the vision and will be revised when the vision is developed into a binding policy."

Published by Globes, Israel business news - en.globes.co.il - on November 6, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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