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Signs of a market awakening in Israel

Sixteen years after Israel's first and only wind farm came online, using cutting-edge technology for that era, the plant's operator is moving ahead with a second project in the Golan Heights together with an American electric utility

Signs of A market awakening in Israel

After more than a decade of inactivity, the Israeli wind power market is giving signs of life. US energy giant AES recently wrapped up an agreement with Mei Golan Wind Energy that could eventually see the construction of a 380 MW plant. Israeli infrastructure minister Binyamin Ben-Elizier said in May that Israel plans to install around 300 MW of wind power stations by 2011.

Israel's new-found appreciation for wind is particularly remarkable considering that no commercial wind capacity has been added in Israel since Mei Golan Wind Energy, a subsidiary of the Mei Golan mineral water group, built Israel's first and only commercial wind power installation in 1992. That 6 MW wind farm in Tel Assania in the Golan Heights, is still operating. It is made up of Floda 600 kW machines, an advanced machine for its time with design input from Gerald Hehenberger, who last year sold his Austrian wind turbine design company Windtec, to American Superconductor Corporation. Floda turbines were also installed in California.

The Mei Golan-AES venture is a 50-50 partnership that expects to invest about $600 million in the 380 MW project, to also be located in the Golan Heights to the north of the existing Tel Assania site. "Right now we are in the permitting process -- we've already done the environmental impact statement -- and we estimate we will start constructing at the end of 2009," says Zahal Harel of Mei Golan Wind Energy. The new project will be completed in two phases, continues Harel. The initial stage will see the construction of about 200 MW in Druze village orchards and will cost about $330 million. The remaining 180 MW, to cost an estimated $270 million, will be located in Jewish communities. The plan is to use 2.5 MW class turbines for the project.

In the nearer term, Israel should see an increase in its wind capacity already next year. Mei Golan is also planning to repower its 6 MW plant with new turbines, upgrading it to about 13 MW. "We have all the permits in place and hope to close the supplier agreement in about a month or two," says Harel. That retrofitted plant should be up and running by mid-year. "We are also doing wind measurements all over Israel and we believe in the near future we could have another 400-500 MW in projects," he says. Harel points to Israel's strong wind resources. In the Golan Heights winds average eight metres a second and between about 7.2 m/s and 7.6 m/s elsewhere, he says.

Alongside Mei Golan, another active player in Israel's wind business is industrial holding company Afcon Industries. "We are developing about three or four wind sites in the country with total capacity of about 250 MW," says the company's Eli Ben-Dov. Afcon also has two wind farm projects in Rabat Sirin and Gilboa, with combined capacity of about 25-30 MW, which have finally cleared all administrative hurdles. Turbines now need to be procured. "I began the licensing in 2001, I obtained the approval of the national committee in 2005 and since then I've been trying to settle down the issues with the landowners and recently I managed to do that," says Ben-Dov.

Purchase prices

Wind development activity comes in the wake of new wind power purchase prices in place since 2005. The price is based on average electricity production costs in Italy plus premium payment for green energy, currently about $0.02/kWh. All told, wind energy producers currently receive about $0.08/kWh for the entire life of a plant's operation. The rate is a great improvement on the situation after 1999, when an earlier price agreement expired. Until 2005, the Tel Assania plant was at the mercy of the market. "Whatever they wanted to pay, they paid," says Harel.

Developing wind energy in Israel is not likely to be easy. Ben-Dov points to the bureaucracy and opposition from environmental groups to wind developments as some of the factors that make operating in the country difficult, pushing some Israeli companies to scout out wind opportunities abroad. "Everyone objects to wind," he says. "The air is also holy here, not only the land."

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