The Ministry of National Infrastructure, Energy, and Water Resources and the Government Companies Authority have begun a joint campaign aimed at boosting energy efficiency in government companies. The campaign's goal is a 20% saving in electricity consumption by the companies. As part of this campaign, Ministry of National Infrastructure, Energy, and Water Resources director general Shaul Meridor recently notified government companies that his ministry would pay for energy surveys for the companies in order to assess the their potential energy saving.
At the same time, Government Companies Authority director Ori Yogev sent a letter on the subject to the companies calling on them to implement the cabinet resolutions on reducing electricity consumption by 17% by 2030, and to increase the proportion of their energy use from renewable sources to a 10% target by 2020. Yogev's letter attempts to encourage the companies to install solar panels on their rooftops using the net metering method.
Following a short review of the cabinet resolutions concerning reducing emissions from energy production, Yogev describes the financial consequences of installing the solar panels. He lists a return on equity of 1,227% and 840% if the companies pay for 20% of the facilities from their own resources with the rest coming from loans. He notes that the economic viability of the panels is based, among other things, on the electricity rates paid by large concerns being set according to peak and off-peak times, with the peak price being up to NIS 1.23 per kilowatt-hour.
According to Yogev's calculation, an installed kilowatt costs NIS 4,000, with a 25-year lifespan and an annual cost of NIS 100 for maintenance and insurance. The calculated reduction in annual electricity production capacity is 0.5%, although the document states that this is a stringent working assumption, and the actual loss of production capacity could be 0.1%. Panels with a one kilo-watt capacity cover 10-15 square meters and produce 1,750 kilowatt-hours at a cost of NIS 0.46-0.56 per kilowatt-hour.
"It can be seen that the range of net profit per square meter is between NIS 502 per square meter to NIS 1,061 per square meter on an investment of NIS 4,000," Yogev writes enthusiastically. He wrote before it was learned that the new solar tender closed this month would provide electricity for NIS 19.90 per kilowatt-hour - the lowest price currently provided by electricity producers using any technology.
"According to the above calculation," Yogev continues, "every 1,000 dunam (250 acres) available is likely to produce a net profit of NIS 502,420-1.08 million. Energy projects can be carried using the private finance initiative (PFI) method, which features a high proportion of foreign financing. In this case, the project is likely to generate a positive cash flow from the very beginning."
Based on the assumption that there is currently an available quota of 600 megawatts for solar electricity using the net metering method for using the electricity and transmitting the surplus to the grid in exchange for cheap electricity when it is needed, Yogev recommends that government companies do staff work to map and identify the potential of photovoltaic facilities in appropriate areas on their premises.
Accelerated activity in the private sector
In the framework of the campaign by the Government Companies Authority and the Ministry of National Infrastructure, Energy, and Water Resources, Ministry of National Infrastructure, Energy, and Water Resources enforcement and development manager David Weizmann sent the companies a letter asking them to submit their energy consumption reports for 2015 by March 21, so that the Ministry of National Infrastructure, Energy, and Water Resources could prioritize the companies with a particularly potential for saving on energy. Only a few of the companies have responded so far, and the Ministry of National Infrastructure, Energy, and Water Resources said that once the full information was assembled, it would several weeks to analyze it and draw conclusions.
The campaign for energy conservation in government companies is a continuation of the economizing plan presented by the ministry two months ago. Among other thing, this plan includes NIS 300 million in grants for projects in this sector. In cooperation with the Ministry of the Interior, the Ministry of National Infrastructure, Energy, and Water Resources last year funded energy efficiency surveys for 55 local authorities, and will fund surveys for 16 local Arab authorities during the coming year.
Simultaneously with promoting energy efficiency in the public sector, the private sector regularly reports energy efficiency efforts in enterprises and institutions involving millions of shekels in investments. Vertex Energy announced an energy efficiency contract for the Queen of Sheba Hotel in Eilat involving the installing of innovative heating systems. These systems will save the hotel NIS 400,000 in liquefied petroleum gas and electricity a year.
Another company operating in this sector is Israeli company SmarTap, managed by founder and CEO Asaf Shaltiel. A system it developed in cooperation with Intel and Amazon was installed at the Sheraton Tel Aviv Hotel, and has cut water consumption by 30% and electricity consumption by 8%. The system collects data about the water system, such as pressure, temperature, and rate of flow, and makes it possible to control these in order to optimize usage and reduce waste.
Another Israeli company in the sector, Grid4C, founded and managed by Dr. Noa Ruschin-Rimini, operates out of Houston, Texas. It is considered a leading in big data analysis and optimization for electricity transmission and consumption. The company was founded after Ruschin-Rimini wrote an algorithm commissioned by Dalia Energies that predicts with great accuracy the expected consumption of its customers and facilitates production of the correct amount using Internet of Things (IoT) tools and billions of readings of millions of smart meters conducted at 15-minute intervals.
The company is now working with electricity suppliers on four continents, including the largest electricity company in Houston, and providing services to over a million households in the US that makes their home electricity consumption more efficient. One of the advantages of the company's technology is its ability to identify anomalies at a high level of sensitivity, and warn customers about electrical appliances that are not functioning properly, including individual appliances in the customer's home. The price of efficiency in this case is some loss of privacy, obviously contingent on the customer's advance consent. Ruschin-Rimini was recently selected as one of the 20 most influential women in IoT in the US.
The Power Utility Business Innovation Forum, a forum of private electricity producers, today called on the Minister of National Infrastructure, Energy, and Water Resources to move ahead with the construction of a 6,200-megawatt gas-powered power station by 2025, based on the negligible growth in renewable energy production and what was written in the Ministry of National Infrastructure, Energy, and Water Resources' energy efficiency plan.
According to the plan, if all goes as planned, electricity consumption will grow 62% by 2030, in comparison with 2015, reaching 96 terawatt-hours. The plan assumes that the cost of implementing energy efficiency by that time will amount to NIS 24.3 billion, while the benefit it produces will amount to NIS 79.9 billion.
The forum regards this as confirmation of its forecast that electricity consumption will grow at 3.8% a year over the coming decade, because the large investments required for energy efficiency cannot be relied on. "In view of this, we call on the government to urgently remove the barriers to the design and construction of private power plants," said forum chairman Amos Lasker.
Published by Globes [online], Israel Business News - www.globes-online.com - on March 29, 2017
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