An Israel Alone, Dependant On Natural Gas

Shaul Zemach (left) shakes hands with Zvi Rome of Petco (right) at the Asia House in Tel Aviv this Tuesday morning

With Israeli electricity prices set to rise nearly 9%, government officials are trying to plan for the long-term, at least until the next energy crisis.

At a breakfast event this Tuesday in Tel Aviv sponsored by Washington-based international energy consulting company Petco, the Director General of Israel’s Ministry of Energy and Water Resources Shaul Zemach spoke about the challenges facing Israel as it struggles to keep up with rising electricity and gas demand.

Israel’s Public Utility Authority – Electricity is raising electricity prices because a shortage of natural gas supply and a projected increase in electricity demand this summer will literally max out the country’s grid. Unfortunately for Israelis, this is not the first time that demand will outpace supply for the tiny Middle Eastern country that, according to Zemach, cannot rely on its neighbors for back-up power.

“We cannot rely on natural gas that is imported from a foreign country,” Zemach told the fifty or so gathered energy industry professionals in Hebrew. “This was something we knew before the problems with Egypt. Even then, the situation was not stable, but at the time we did not put enough emphasis on diversifying the country’s energy portfolio.”

Although Israel has recently discovered several significant offshore natural gas wells in the Mediterranean Sea, only the Leviathan well—with over 400 BCM (billion cubic meters) of natural gas—has been tapped and connected with a pipeline to generators. But with over 40% of Israel’s electricity produced with natural gas, Leviathan is quickly emptying just as supply from post-revolution Egypt is dwindling.

Zemach said the government knew there would be a gap in supply as Leviathan drained and the newly discovered 200 BCM Tamar well was tapped, but the government mistakenly assumed that Egyptian natural gas would fill the gap.

“Everyone thought we could buy time,” said Zemach. So when the government realized that would not be happening, it scurried to begin development of the Tamar well, but a gap in supply this summer is still inevitable.

And because the Israeli grid is so dependant on natural gas, Zemach said it will be nearly impossible for the country to transition to alternative energy sources anytime in the near future.

“We are in a natural gas crisis, so we have to develop [the wells we have] as quickly as possible,” said Zemach. But like everything in Israel, obtaining the necessary permits has been challenging for natural gas developers that have to jump through the hoops of government bureaucracy and local residents that are fighting the construction of pipelines near their homes.

“Israel has become a crowded countries in terms of infrastruct ure, said Zemach. But he said the government has to do a better job of prioritizing national interests over the protests of local communities.

In 2010, Israel also faced an energy crisis and at the time the government approved construction of four emergency power plants. Currently 34% of Israel’s power is generated from coal. But only three of the plants were built which is why the PUA is still struggling to keep ahead of supply two years later. Zemach said that included in the demand numbers is a relatively generous cushion of excess energy that Israel feels is necessary because it cannot rely on a neighboring country for backup power.

While many small isolated countries have chosen to invest in renewables rather than import natural gas, Zemach said the lack of energy partnerships with neighboring countries makes the Israeli PUA uncomfortable relying on renewable energy for any significant amount of power.

And the lack of abundant water resources makes hydropower, which in many small countries a significant part of a renewable energy portfolio, an impossibility in Israel.

By 2020, the country has set a goal of 10% renewable power, but it is an initial goal that is being used only as a preliminary test, Zemach said in response to a question from GreenProphet. There is currently no plan for further expansion after the 2020 target is met. For that target, the PUA will develop wind (30% of total renewables) and biomass (21% of total renewables) but will focus heavily on solar. And for a country with nearly constant sunshine, that technology may prove most effective.

Author: Shifra Mincer

Shifra Mincer, Associate Editor, AOL Energy, has reported on a wide range of topics for over half a decade. As a News Editor of the Harvard Crimson, she wrote on local news and assisted with newspaper layout and design. Mincer is based in New York and is currently founding a business intelligence newsletter for the Israeli clean tech industry. She can be reached at [email protected]

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