Helping Palestinians get renewable energy - opinion

A one-megawatt solar energy field costs about $1 million dollars and requires about 12 dunams of land.

 PALESTINIAN PRIME Minister Mohammad Shtayyeh addresses the UN Climate Change Conference in Glasgow on Monday. (photo credit: Ian Forsyth/Reuters)
PALESTINIAN PRIME Minister Mohammad Shtayyeh addresses the UN Climate Change Conference in Glasgow on Monday.
(photo credit: Ian Forsyth/Reuters)

At the Glasgow Climate Change Conference world summit taking place this week, Palestinian Prime Minister Mohammed Shtayyeh was in attendance along with more than 100 other world leaders.

Palestine’s carbon footprint is tiny, and there is actually very little that Palestine could do that would impact the global climate crisis in any meaningful way. Palestine has almost no heavy industry, and produces almost none of the energy it uses. There is an environmental crisis in Palestine and Palestinian towns and cities are very far from being clean. Waste collection is far from adequate, recycling is almost non-existent, and general environmental awareness is very low.

For more than six years I worked for Gigawatt Global, a Dutch-registered Jerusalem-based solar energy company working mainly in Africa. As country manager for Palestine, I tried to advance commercial-scale renewable energy. I was not successful. There is almost no possibility of building large-scale (10 megawatts and larger) solar energy projects in Palestine because the Palestinian Authority does not control the largest available land reserve areas.

Those areas are in Area C, the 62% of the West Bank that is under full Israeli control, and the Israeli authorities do not grant licenses to use large tracts of land in Area C for solar energy.

Furthermore, because very few Palestinians are allowed to live in Area C, the energy produced in a large solar field there would have to be transfered to areas under Palestinian Authority control in the cities and villages in Areas A and B. But in order to move the electricity from Area C (if we were even allowed to build a solar field there), the electricity grid would have to go from Area C to the Palestinian towns and cities in Areas A and B, but that grid with its poles or underground lines would go through Area C under Israeli control and Israeli permission is not granted.

 Gigawatt Global's 7.5 MW Solar Field in Burundi (credit: Courtesy) Gigawatt Global's 7.5 MW Solar Field in Burundi (credit: Courtesy)

To build a commercial field in PA-controlled areas, the Palestinian Authority would need to provide “sovereign” guarantees to the lenders and equity shareholders, but due to the very poor state of the Palestinian treasury, the Palestinian finance minister has refused to grant such guarantees.

Without those guarantees that would provide assurances for lenders and equity partners, the financial risks for such projects are very high and bring into question their financial viability.

The Palestinian Electricity Transmission Company Ltd., which handles transferring electricity, does not have enough of a track record or financial history to provide guarantees that investors from the private sector who develop solar energy fields would get paid for the electricity produced.

We had proposed to the World Bank that the international community invest money to either create a cash fund to provide guarantees for private-sector solar energy developers, or provide money to Palestinian banks to issue Standby Letters of Credit that would service the economic agreements. We proposed those ideas years ago, yet no such plan has developed.

Instead of large commercial-scale solar fields, we came up with a proposal to replace a good part of the electricity that Palestinian municipalities buy directly from the Israel Electric Corporation. We got the main energy authorities in Palestine to draft a law that would enable Palestinian municipalities and Palestinian distribution companies to sign contracts to purchase solar-generated electricity in projects up to one megawatt per project. We proposed that the law stipulate that the solar-generated electricity would be sold at a price that is at least 10% lower than the Israeli Electric Corporation price.

President Abbas signed the draft legislation into law several years ago. Yet almost nothing has happened, despite many attempts by me and my colleagues.

There are about 100 Palestinian municipalities that purchase electricity directly from Israel. Even if our proposal would be implemented, they would continue to purchase electricity from Israel because a solar field does not produce after sundown. Yet this proposal if implemented would have reduced Palestinian dependence on Israel, would have brought down the cost of electricity to the Palestinian economy, and would also have put Palestine in the forefront of introducing green energy. Our estimate was that Palestine could reach 50% renewable energy during daytime hours within five years.

A one-megawatt solar energy field costs about $1 million dollars and requires about 12 dunams of land. Our calculations showed that using Palestinian labor would not only create many jobs, but the financial viability of the project would create about a 10% investor rate of return.

We proposed to the Palestinian Capital Markets Authority to create a crowd-investor platform that would enable Palestinians and others to invest relatively small amounts of money in these projects. This was a classic win-win-win-win scheme, whereby Palestinian energy dependence on Israel would be decreased and its energy independence increase. The cost of electricity would come down, and would be guaranteed for 20 years at the same price. Israel would then be able to decrease the amount of electricity it provides to Palestine. The environment of Israel and Palestine would be improved.

Unfortunately, despite large amounts of money invested and lost, our scheme did not succeed. Palestinian municipalities, where most mayors serve for a limited number of years, refused to sign Power Purchase Agreements for 20 years. They refused to take the risks and decided to continue to buy more expensive electricity from Israel.

The Palestinian Authority, the central government, refused or was unable to pressure local municipalities into signing the contracts. It was very interesting that the financial aspects of the projects in question were not the main issue for the lack of success.

My offer still stands: we are prepared to come and work with any Palestinian municipality that is prepared to sign a 20-year Power Purchase Agreement, for the development of solar energy for their community. It is still possible to bring Palestine to 50% renewable energy within five years. This goal can be achieved.

The writer is a political and social entrepreneur who has dedicated his life to the State of Israel and to peace between Israel and her neighbors. He is now directing The Holy Land Investment Bond.