Israel Energy Forum pushes power save

Raise electricity prices

yael cohen paran  (photo credit: Israel Energy Forum)
yael cohen paran
(photo credit: Israel Energy Forum)
There are two crises brewing regarding the supply of basic services to the public, but one is getting a lot of attention while the other is getting hardly any. While nearly everyone is aware that water is scarce, few realize that electricity is also quite scarce. Israel's electricity reserves stand at just two percent as a result of delays in the building of more power plants over the last several years. When everyone turns on their air conditioners in the summer, if one generator malfunctions, there's a power outage. While the public may not be as cognizant of the crisis, those who monitor and craft policy are excruciatingly aware of it. The shortage is the reason the Israel Electric Corporation (IEC) is so heavily pushing for another coal-fired power plant in Ashkelon, to the consternation of environmentalists. It's also the reason the government passed a resolution to achieve a 20 percent efficiency reduction in electricity usage by 2020 earlier this year and why the National Infrastructures Ministry launched a public awareness campaign earlier this month aimed at getting citizens to start turning off their lights and computers when not in use. Now, the Israel Energy Forum (IEF), an energy think tank, is proposing the creation of an energy efficiency fund to enable the government to meet its goal. They contend in a new report that a levy equivalent to 1.1% of national electricity prices or about NIS 200 million, if invested in the market, would generate what they calculate would be the roughly NIS 1 billion per year needed to cut electricity use by 20% by 2020. The report is based on the forum's own research and discussions with experts over the last year. Raising prices just slightly would have the dual benefit of providing the money for the fund and deterring excessive use, the report's authors argued. The problem with energy efficiency is that the savings come afterwards, according to the report. There is an initial investment, sometimes a substantial one, which pays for itself over the course of months or years as electricity use drops and electricity bills are drastically lowered. However, the report's authors contended, Israeli investors and banks are still too wary of such investments and therefore charge so much interest for the initial loans that the future savings are dramatically reduced. Moreover, major corporation heads and senior management often do not realize how great the savings can be from energy efficiency programs, and so they are unwilling to invest large initial amounts for a potential payoff years in the future, they wrote. In addition, while household efficiency measures, like switching to compact fluorescent bulbs, could have a great cumulative effect, planning a program for a single household is not cost-effective for energy consulting companies (known as energy service companies or ESCOs), they wrote. Therefore, a quasi-government sponsored fund which would be able to put up the necessary initial funds for such projects is needed, the report argued. The fund would be administered by a board made up of IEC and government ministry representatives as well as private sector and NGO representatives. That way, the proposals the fund would receive could be evaluated by professionals and the money transferred in an accountable and transparent manner. Some of the potential energy savings projects which have been launched worldwide include constructing green buildings or retrofitting existing office buildings. Buildings account for about 40% of electricity use to power all of the systems like the elevators, lights and climate control, among others. Sensors that turn off air conditioning and lights at the end of the day have been proven to significantly reduce electricity use, the report listed. On a household level, switching light bulbs and buying efficient appliances can reduce electricity usage and lower electricity bills, the report argued. A few weeks ago, the National Infrastructures Ministry got a new set of regulations passed by the Knesset to limit the import of the inefficient models of basic appliances like stoves and washing machines. There are already regulations in effect for refrigerators and air conditioners. In addition to prohibiting certain models, the existing regulations and the new ones compel importers and manufacturers to clearly label each appliance with its energy efficiency on a scale from A to G. National Infrastructures Ministry Infrastructure Resource Management Division head Ze'ev Gross told The Jerusalem Post Saturday night that the ministry was very happy that IEF had taken up the idea. Gross, whose division tackles the energy efficiency programs of the ministry, called it "almost a necessity" but cautioned that it needed a structure as well. He also pointed out that the ministry had taken the initial steps to create such a fund five years ago. In 2004, a draft amendment to the Energy Law was created and a structure worked out. However, at that time, he said, the Treasury was cracking down on all single-purpose funds and trying to bring them under its control. Those attempts by the Treasury coupled with a legal reevaluation that found the structure lacking caused the ministry to shelve the idea for awhile, he told the Post. The Israel Energy Forum, headed by Yael Cohen Paran, "is a group of public, private and third-sector organizations committed to strengthening Israel's energy security and independence," according to the forum's Web site.