2023-09-23 13:26:33
Last Thursday, the Electricity Authority published a hearing that will open the “bottleneck” in the electricity network for the absorption of renewable energies. This is an essential and welcome step, but one that was taken too late. In addition, the moves to open the network are accompanied by particularly optimistic forecasts regarding the success of the move.
On the face of it, the Authority anticipates that it will not meet the target of 20% of electricity production from renewable energies for 2025, but aims to significantly exceed the target already in 2026 with 23-24% renewable energy. Since the current situation in 2023 is around 10% renewable energies, the chance of reaching 24% within 3 years seems zero. The Authority reported on the state of grid “clogging” with the depressing figure, according to which the rate of installations of electricity production facilities from renewable energies in the first half of 2023 decreased by about 50% compared to 2022.
In the explanation for the hearing, the considerations regarding not utilizing existing electricity production quotas are explained, which makes it possible to create a new model, somewhat reminiscent of the “overbooking” of airlines, so that in practice the existing network will reach exhaustion. Some of the new allocations are based on the expectation that the facilities that have already received a reserved space in the network will not reach exhaustion – some will be established at partial capacity and some will not be established at all.
For the next 3 years, the Authority expects that facilities with a capacity of 2,661 megawatts will be realized, based on network allocations that have already been given in the past. Now, with the addition of 2,300 megawatts to the grid (in alternating current, AC criteria), the authority expects to be able to establish another 2,900 megawatts DC.
This is an expectation to realize 100% of the allocation within only 3 years, in a way that completely contradicts the way in which the space in the network was freed up – an assumption that not all facilities that receive permission reach the phase of actually connecting to the network, and even those that do do not use all the space reserved for them. Apparently, this is 5,500 megawatts of new installations within 3 years – or about 1,800 megawatts per year, when Israel peaked at about 1,100 megawatts per year.
This is a difficult “accordion” movement towards the solar industry in Israel, which requires recruiting and training employees, then firing them because there is no free space in the grid, and then at once changing direction for rapid growth – an achievement that is doubtfully possible, in light of the too great changes in market conditions and regulation.
Until the move matured, companies closed and entrepreneurs moved to operate abroad
If the move had matured a year ago, the industry might have had a stable progress horizon, allowing it to grow and also to close financing for projects at the end of 2023 and 2024. In the meantime, there are companies that have closed and there are renewable energy entrepreneurs who have moved to operate exclusively abroad. The maturity of the move only at the end of 2023, will make it difficult for entrepreneurs and customers to reach realization already in 2024.
The move of opening the network is excellent in itself, but two complementary moves are missing, on which no work was done at all. One is encouraging electricity conservation, which promotes a higher percentage share of renewable energies. It’s not simply about energy efficiency – because this is already being done, for example, in the transition to electric transportation. This change works to the detriment of the renewable energy goals, because the energy saving is in the reduction of fuels, and the electricity consumption actually increases as a result.
The second move that is missing is money from the state to promote renewable energies. Traditionally, the State of Israel financially supports only gas projects, while the support for renewable energies is “tariff” – at the expense of the general public, who pays the electricity tariff. Financial support from the state budget for dual-use land projects will allow them to be established with high realization rates, without making electricity more expensive for the public – but the government has no such intention. Without these complementary moves, the great news of freeing up space in the network will only be realized in many years.
The move itself was revealed by the Minister of Energy Israel Katz without essential details, in order to grab headlines. The current hearing of the Electricity Authority once again provides this goal of positive headlines, because on paper there is a recipe for closing the existing gap in progress in renewable energy, and perhaps even reaching a jumping off point that will reach the 2030 goals (30% renewable energies) ahead of time.
But this is over-optimism that looks good only on paper. In a few weeks, Minister Katz will finish his duties, and will move to the Ministry of Foreign Affairs. He will leave his successors with nice achievements on paper, but such complex constraints in reality, that it will be very convenient to write the failures of the future on the back of another minister.
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