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Israel

Israel

Market Status: Israel - Premium price rise coming as country slowly wakes up

ISRAEL: Israel had been expected to see an increase in wind capacity in 2009, but as is the case in other countries where wind power is just beginning to take off, the process has taken longer than expected.

Nevertheless, while the country ended 2009 with the same 6MW of installed capacity it has had since 1992, the market is expected finally to see a small bump upwards in 2010 as its single existing plant is repowered to 12-14MW. More importantly, the groundwork is being laid for future growth with other projects slowly moving forward in 2009 and the government preparing to give the go-ahead to an increase in the incentive paid for wind in early 2010.

Zahal Harel, chief executive of Mei Golan Wind Energy, which owns the 6MW wind farm in Tel Assania in the Golan Heights, says the company is negotiating with turbine suppliers to repower the plant.

Also on the horizon is a 380MW wind farm Mei Golan is planning to build with US energy giant AES through a joint venture known as Clean Wind Energy. The first phase, also located in the Golan Heights, is expected to create 200MW of installed capacity. Harel, who is also chief executive of Clean Wind Energy, says the Israeli government is expected to proclaim the scheme a national infrastructure project, which means it will have a fast-track authorisation process for building permit and zoning change issues.

Eli Ben-Dov, general manager of Afcon EB Wind Energy, says his company is near to finalising the financing of a 30MW project in Rabat Sirin and Gilbao, which will use 850kW turbines produced by Spain's Gamesa. "The only thing we are waiting for is the Public Utility Authority's final decision on increasing the tariff," says Ben-Dov. About a month after the final decision on tariffs, Ben-Dov expects to close a financing deal and it could be operational by 2011.

There are some concerns over the expected announcement on tariffs, however. Wind power producers in Israel currently receive a premium payment of about $0.02/kWh (EUR0.014), bringing the total price of wind electricity to about $0.10/kWh. Harel is expecting the price premium to be hiked about 50%, to roughly $0.03/kWh.

But there is a consensus within Israel's wind energy sector that an increase will prove to be insufficient in helping Israel meet its longer-term wind energy objectives, particularly the government's estimate of achieving about 1-1.6GW from wind energy by 2020.

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