Laws, bureaucracy will cost Israel business in energy field

Foreign investors won’t invest in countries in which they can have only 10 or 20 megawatts, because that doesn’t interest them.

By NADAV SHEMER
August 10, 2011 23:24
2 minute read.
The Jerusalem Post

Solar Panels 311. (photo credit: bloomberg)

Outdated regulations and a lack of coordination between public institutions will cost Israel business in lucrative renewable-energy fields such as solar, according to a leading clean-tech legal specialist.

“Clean-tech, especially the renewable-energy field, has great potential to bring foreign investors to Israel,” Shibolet & Co. partner Orit Marom-Albeck told The Jerusalem Post Thursday. In the past week alone, she said she had met with two large foreign venture-capital companies interested in investing in Israeli solar energy.

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But Marom-Albeck, who leaves Friday for a four month stint in the United States – where she will join 15 other young leaders from around the world in Yale University’s prestigious World Fellows program – said existing quotas on photovoltaic solar production would scare away investors.

Foreign investors “won’t invest in countries in which they can have only 10 or 20 megawatts, because that doesn’t interest them,” she said.

“They have a lot of costs in order to come to a new country, and they won’t do it if they don’t have prospects.”

In July the government approved a new quota of 460 MW for large solar fields, but made no additions to the current 300 MW allotted for medium sized solar fields.

“I think the government, which really wants to encourage this field, misses the point,” Marom-Albeck said. “Even if they don’t want to raise the capacity in the coming three years, they must come to a decision today just to raise it in 2015. If they make a decision for additional quotas, investors will see prospects. Otherwise, they’ll choose to go to Italy or Spain, or to Germany, which doesn’t have a quota.”

“I understand the government’s point of view that they don’t want to raise quotas today because they want to see how the field reacts and because it’s new in Israel,” she said. “But they still have to make a decision today, even if it’s [a decision] for the future.”

As Shibolet’s head of clean-tech, Marom-Albeck represents Arava Power Company, which launched Israel’s first solar field at Kibbutz Ketura in May.

Now in the middle of negotiations for a second client, she fears bureaucratic hurdles could result in companies losing potential investments. Specifically, she referred to the regulation that strips a company of its feed-in tariff if its power purchase agreement, or PPA, is not ratified by the Israel Electric Corporation within 90 days of financial closure.

“What is missing, in my opinion, is coordination between all the relevant authorities,” Marom- Albeck said. “To receive the power-purchasing agreement from the Israel Electric Company, it has to be approved by the Public Utilities Authority, by the Ministry of National Infrastructures, by the board of directors of the Israel Electric Company.

In September we have a month full of holidays, and I’m afraid that they’ll lose their feed-in tariff.”

No company has lost its feed-in tariff yet, she said, adding: “There are many daily obstacles I confront during my work, and I feel that [although] authorities want to help and want to promote this field, something is stuck, and the market is waiting too long for PPAs.”


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