How can the Israeli and California energy industry enhance each other’s capabilities in adopting cleantech technologies?

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Startup Nation

10 min readMar 29, 2018

As some of you know I recently moved to Los Angeles, and was involved in organizing the California — Israel Cleantech Forum that focused on enhancing cleantech collaboration between Israel and California. In order to prepare for this event I searched for an article that compared both cleantech industries- of which I did not find. Because of the lack of articles like this, the many similarities between the California and Israeli high tech industries, two signed Memorandum of Understanding (MOU) in 2009 and 2014[1] and USA being Israel’s number one export market[2], I find it interesting to see how both cleantech industries are aligned. The following paragraphs will describe some of the current renewable energy developments in California and Israel, where I will highlight a few projects in order to pinpoint trend developments in both regions.

In the renewable energy spectrum California is encountering different problems than Israel. California is producing too much renewable energy, which leads to integration problems and leaving curtailing excessive renewable energy as only option. The state is actually paying other states to buy their renewable energy in order to avoid an overloaded grid and a fluctuating energy price. So why not store this energy? California already has many storage plants, but these are not enough and it is not cost effective yet. Having said that, storage has become leading within California’s cleantech innovation development, as shows in the Global Cleantech top 100 for 2018 where five out of the eight mentioned storage solutions are from California[4]. However, the current renewable climate of the US is experiencing some heartache with many cuts in renewable research funds[5]. This also shows in the study from Brookings research that describe a decline in cleantech patents. Nevertheless, California is still the US advocate of renewable energy and actively supports and funds renewable energy development initiatives.

California leads the nation in developing clean energy resources. The state enabled this by its Renewables Portfolio Standard (RPS), which requires utilities to source 50 percent of retail electricity sales from renewable energy by 2030. Both private and public utilities are required to meet this standard[6]. Besides its RPS, California is also leading in renewable innovation, as 10 metro areas of California cover 38 percent of America’s cleantech patents. The fact that California is leading in USA cleantech patents is caused by the state active involvement within the startup ecosystem and the ability of opening new businesses easily[7]. Three prominent examples of the state’s policies that enabled this innovation development are 1) The 33 percent renewable portfolio standard for 2020, of which 30 percent was achieved in 2017[8], 2) Enabling projects like the Million Solar Roof Initiative that create solar accessibility for its community[9] and 3) Require utilities to prioritize energy efficiency and renewables before making additional investments in fossil fuels and get them to invest in energy storage. As the state set these ambitious renewable goals and provides supporting policies, it ensures the counties of renewable integration importance[10]. Counties such as Los Angeles, Riverside, Imperial and Kern are all actively involved in carefully planning renewable energy activities through the desert renewable energy conservation plan [11]. Kern is leading the renewable pack as the county is providing 5875 MW of eligible Renewables Portfolio Standard (RPS[12]) to online wholesale facilities[13]. This is also enabled by Los Angeles (LA), as the counties share land allocated for large solar photovoltaic installations, such as the Solar Star Projects. Another renewable initiative by LA is the Energize California Project, this project focuses on strengthening the region’s clean energy innovation and economy led by Community Environmental Council and the Los Angeles Cleantech Incubator (LACI)[14]. This allows the county to participate in the California Energy Commission’s initiative that drives energy innovation by ensuring collaboration with partners, identifying regional energy needs, pilot new technologies, funnel energy innovation into Southern California, including underserved communities and support entrepreneurship and economic development in this industry. Due to these initiatives incubators like LACI support startups to spur through urban challenges and local collaborations that can lead to larger initiatives on a national scale via the incubatenergy accelerator initiative. Indicating these challenges is a huge step in transparency. However, the state is still dealing with many different adopted standards in the area, and makes it hard for companies to create a unified product that fits all grids[15].

As mentioned, the choice of California to curtail energy is mainly caused by storage problems and a non-coherent grid. Many environmentalists, academics and politicians believe that the quickest fix for California is to integrate its grid with the other western states. The integrated grid would allow the state to sell its excess clean energy across state lines during peak hours and more easily fill its evening demand with power from other states. There is an existing model for this integration, as in 2014 western states started the Energy Imbalance Market that allows them to buy and sell the final few megawatts of power needed to satisfy demand within the hour it is needed[16]. Advocates of this market want to expand it and include long-term and medium-term markets. But integration of the grid is not that straightforward. As a condition for the smaller players to agree to join, they would demand the creation of a what is essentially a new super grid operator that would need a board of directors from all across the region[17]. Even though the difficulties and challenges to align all these energy players, California took a big step to open up the ISO energy market to prevent curtailing energy and organizations like LADWP have signed to commit in 2019[18].

Israel

Israel’s security needs are the main cause for its innovative developments, and this also counts for the alternative energy development. As Israel is located in the middle east, involved in a sensitive geopolitical conflict including many neighboring countries that have energy security, it is of importance to establish an independence. Before the gas discoveries in 2009, Israel only had a few exploitable indigenous natural resources. Due to this it was a necessity to pursuit the development of alternative energy sources for better independence and did so with the development of solar energy in 1950[19]. Israel set a 2020 renewable energy target of ten percent of which currently 2.6 percent is achieved. Even though Israel found gas fields, this does not affect its renewable energy target and the gas would mainly be used to replace coal fueled sources[20]. This means that it requires approximately 4 GW of renewable energy capacity to meet the renewable goal. Solar thermal and photovoltaic power plants are expected to account for over 70 percent of total generation, with the remainder made up of household PV units, wind energy and biomass. In order to meet the ten percent target by 2020, solar power plant development is pushed forward, and aims to develop 10 large solar power plants in the Negev before the end of 2020. In addition, the government started a $400m government-sponsored program for promoting the development of alternative fuel sources and a $15.5m joint investment with Capital Nature Ventures to open a technology development center in the Arava region[21]. This decision also led to the tariff guideline published by the Israel Public Utilities Authority (Electricity) to promote large-scale solar energy. The government also offers other incentives for entrepreneurs to build solar power stations, by encouraging investment in research and development (R&D) [22]. These encouragements are supported by funds offered by Israel Innovation Authority (formerly Office of Chief Scientist), of the Ministry of Industry, Trade and Labor[23].

The southern Arava region in Israel is the international center for research and development of renewable energy technologies and home to the Eilat-Eilot Renewable energy company. The Eilat-Eilot Renewable Energy company is focusing on getting the Arava region 100 percent powered by renewable energy[24]. Currently, the Arava region powers 70 percent of its city by the sun during the day, and aiming for 100 percent in 2020[25]. In order to meet this target, Arava Power installed a 40-megawatt field at Kibbutz Ketura in 2017, which supplies a third of Eilat’s daytime energy. In the next five years, a 60-megawatt field will be constructed around nearby Timna. In 2018, the three plots of the Ashelim project [26], and the solar tower are expected to be completed. This project holds the world largest solar tower at 250 meters (820 feet) and will generate some 310 megawatts of power, about 1.6% of the country’s energy needs[27]. Because of these initiatives Israel was able to cover thirteen percent of its national consumption by renewable energy for the first time in its history in March 2018. Proving that the country can generate and meet its 2020 renewable energy target.

Having highlighted some of the larger projects in Israel and California, it shows that both industries have a similar climate, with both renewable energy targets for 2020. The public domains of California and Israel allow the cleantech industries to spur by their fostered startup ecosystem, government initiatives and policies. However, it is seen that there is a difference in how innovations are spurring. That both startup ecosystems are similar and can be explained because of the similarities, as both places hold various different cultures in one place with a public domain that encourages innovations by allowing good ideas to surge and open businesses. Both public domains are devoted, willing to foster and integrate cleantech innovation is remarkable, as it is hard for these government organizations to innovate and shift 180 degree in its energy strategy[28].

When looking at the differences, Israel is small country with one coherent grid that is controlled by its public domain, whereas California has 4 times the people to supply energy with a segmented grid and different levels of authorization power. However, it is seen that California is aiming to unify its grid through the DRECP initiative that aims to open the grid to more companies. This will enable California to open their ISO market and will allow them to curtail excessive energy properly, rather than paying other states to take its energy. California is also focusing on a higher renewable target than israel. Therefore, it is more focused on new renewable technologies as they will need these innovations to meet the renewable targets. Israel has less of a need, as they recently found natural gas, but does stimulate new renewable projects in order to meet their 2020 target. Therefore, the necessity of the development of renewable energy is lower, but still needed on long term. Finally, there are two big technological differences as, 1) California does not produce a lot of solar thermal energy, whereas in Israel this is the main source of renewable energy[29]. 2) California holds a segmented grid and aims to solve this problem by developing storage and grid solutions to be able to store the excessive generated renewable energy, where Israel just surpassed its renewable target for the first time in March and is able to shift it more easily through its coherent grid.

To conclude, California is a great territory for Israel to expand to as it is advanced in its renewable energy market. However, the market is also difficult due to the segmented grid and energy production, its different energy standards and policies deployed by the municipalities and counties[30]. These differences make it difficult to develop a product that is meeting the different energy standards, which can lead to a long integration process. Therefore, it is recommended for startup companies to leave room for flexibility in its integration possibilities and provide a broader platform that can tap into different integration standards for different renewable energy products. In contradiction to California Israel holds the privilege of a coherent grid, but due to its small size this is easy to maintain. Since Israel is small it also explains why it is interesting for Israeli companies to go abroad quickly, of which the US can benefit and obtain knowledge and explore options on how to upscale a grid through the already available solutions in Israel. Two technological examples are storage and grid solutions, of which both industries are involved in its development and deployment examples of this are Brenmiller Energy, Primus Power and Nostromo. However, as Israeli companies are operating in such a small playing field that it is easier for them to deploy a pilot project and go abroad with a proven technology and experience. This is why Israeli companies can often showcase their track record quickly and provide a different perspective on both technological verticals, whereas California holds the advantage of adopting renewable technologies on a larger scale and can easily identify the bottlenecks the industry encounters while upscaling to a renewable powered state.

[1] Palevsky, S. November 20, 2009 — J weekly https://www.jweekly.com/2009/11/20/israel-california-agree-to-collaborate-on-clean-tech-and-energy-projects/

Shamah, D., July 1, 2017 — Times of Israel
https://www.timesofisrael.com/israel-california-sign-major-tech-cooperation-deal/

[2] https://atlas.media.mit.edu/en/profile/country/isr/

[3] Minevich, M., Dec. 5, 2017, Forbes https://www.forbes.com/sites/forbestechcouncil/2017/12/05/these-seven-countries-are-in-a-race-to-rule-the-world-with-ai/3/#5307b9f46ec4

[4] https://i3connect.com/gct100/the-list

[5] https://www.technologyreview.com/s/608083/california-to-trump-well-fund-clean-energy-if-you-wont/

[6] UCSUSA, https://www.ucsusa.org/clean-energy/ca-and-western-states#.WpR59hPwbVo

[7] Koenig, N, February 9, 2014, http://www.bbc.com/news/technology-26041341

Kirkham, E. November 3, 2015, CBS https://www.cbsnews.com/media/want-to-start-a-new-business-the-10-best-and-worst-states-for-entrepreneurs/9/

[8] http://www.energy.ca.gov/almanac/electricity_data/total_system_power.html

http://www.energy.ca.gov/renewables/tracking_progress/documents/renewable.pdf

[9] https://rgsenergy.com/solar-tax-credits-rebates-and-incentives/californias-million-solar-roofs-program/