“Electricity from solar power has become so cheap, no other sources can even compete”

The electricity sector has suffered from a decade of underinvestment when it comes to anything related to renewable energies. In fact, the Israeli government's 2009 decision to integrate "green electricity" has so far failed miserably. By 2014 at least 5% of production was supposed to come from wind or solar facilities with the figure supposed to climb to at least 10% by 2020. As of today, the state has missed all of the benchmarks it set for itself and green energy sources only account for 8% of the electricity produced in the country.

Despite the troubling figures, the past year has marked a breakthrough of sorts, and companies active in the industry are reporting a shift in the prevailing trend. According to Ayalon Vaniche, CEO of EDF Renewables Israel, the government has developed new regulations and appears to have learned from the mistakes other countries have made.

“Right now we're in a very competitive world, and the subsidies for renewable energy are gone,” Vaniche said in an interview with Lior Gutman on Monday during Calcalist and ESIL Technologies’ Sustainability and Innovation Week. “In fact, renewable energy has become the cheapest in Israel, and that's what opened further doors for us in recent years.”

According to Vaniche, electricity from solar energy facilities has become so cheap that no other sources can even compete anymore. He said that in the last few production tenders the solar bids were a third of those put forward by natural gas producers, citing one tender in which the price for solar was less than three cents per kilowatt an hour (kWh) compared to nearly 7.5 cents kWh for natural gas.

Vaniche pointed to the ability to store power overnight so that solar power facilities can operate when the sun is not out, as one of the key developments in the industry. He said that when overnight power storage was factored in the price rose to around six cents kWh and predicted that batteries would one day replace conventional power plants.

“Today lithium-ion batteries are the most common solution. Their cost has also gone down dramatically and will continue to drop with consumption,” Vaniche said, pointing to electric cars and power storage facilities as the main drivers of demand. He also spoke about less well-known solutions including thermal storage, in which you heat salt to about 300 degrees it absorbs it, becomes molten and then releases the heat over a long period of time, operating a steam turbine or storage via compressed air, which is not new, but according to him, now back in play.

The sore point in Israel, according to Vaniche is the shortage of land to support widespread solar energy production. He said that while efficiency has doubled over the last few years, cutting nearly by half the amount of space needed to produce the same amount of electricity, land availability remains a problem. He said that his company was conducting pilots on dual use of land, combining agriculture and fish farms with solar panel coverings, which if successful would offer some relief.