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Massachusetts - IsraelCleantech Opportunities
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Table of Contents

• Executive Summary
• Business Context in Israel
• Market Drivers
• Government Goals and Incentives
• Sector Focus Clean Energy and Water

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Executive Summary

• Israel is particularly strong in RD
• World class universities large of MDs,
  engineers and scientists
• Small domestic market results in focus on
  international markets and willingness to locate
  HQ or manufacturing abroad to secure proper
  funding and market access.
• Opportunities in the clean energy sector
• The solar energy industry - installation and
  manufacturing opportunities.
• Electric cars energy storage, converters etc.
  for electric cars and the needed infrastructure.

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Business Context in IsraelA technologically
advanced country

• Highly educated workforce with the worlds
  highest ratio of engineers and scientists.
• Several global technology companies have RD
  centers in Israel
• Strong government support for developing
  innovation industries--the worlds largest share
  of GDP being invested in RD (4.8)
• Network of incubators, many of which are
  government run
• Strong academic institutions
• Free trade agreements with both US and EU
• Among the largest venture capital markets in the
  world
• Small domestic market
• companies are globally focused
• willing to establish manufacturing and
  headquarters abroad to secure funding and access
  markets
• The government offers significant investment
  incentives and tax benefits, especially to
  foreign investors, for large-scale projects as
  well as VC, RD, and employment grants

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Market Drivers

• The future of the clean energy industry is being
  driven by
• National electric grid close to capacity
• Israel Electric Corporation (IEC) is responsible
  for the national grid of 11 GW capacity
• In 2007 peak demand came within several hundred
  MW of capacity
• The National Ministry of Infrastructures expects
  demand to grow by 8 GW by 2020. Half of the
  increased capacity should come from independent
  power producers, creating a big opportunity for
  clean energy.
• A government-supported build up of infrastructure
  for electric cars would requires even further
  expansion of the already strained national grid.
  It has been suggested that the additional
  capacity should come from renewable energy.
• Growth in electricity consumption
• 4.8 annually 1997-2007
• 6.8 from 2006 to 2007
• For comparison, the capacity in MA is 13 GW and
  is predicted to grow approximately 1 annually
  during the next decade.

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Government Goals and Incentives

• Goals to increase use of renewable energy
• Independence from foreign fossil fuel is
  important for political reasons.
• Distributed generation rather than large
  centralized power plants makes sense for security
  reasons.
• 10 of total energy generation should be produced
  by renewable sources by the end of next decade
  (2020).
• There will likely be carbon emission reduction
  targets in 2013 when Israel graduates from its
  status as developing country under the Kyoto
  Protocol.
• Government initiatives in 2008
• Increased feed-in tariffs for PV solar production
• Low taxes for electric vehicles, with special
  incentives for electric-only vehicles.

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Solar Energy

• Solar is Israel's primary source of renewable
  energy
• Long-run capacity estimated to be 1 GW or 8.8 of
  the current installed capacity.
• The total installed capacity of solar PV was 1.6
  MW at the end of 2007.
• The largest potential areas for energy harvesting
  from PV are the Tel Aviv region and the southern
  tip near Eilat.
• Increased feed-in tariffs (56.4 per kWh for 20
  years for residential systems up to 15 kW and for
  commercial systems up to 50 kW) will increase the
  installed capacity during the coming years.
• Ben-Gurion National Solar Energy Center,
  Jerusalem College of Technology, Technion, and
  Tel Aviv University are all doing PV research.

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Solar Energy (contd)

• Israeli companies and academic institutions are
  world leaders in solar thermal energy.
• 90 of Israeli households have a rooftop solar
  water heating system.
• Ben-Gurion National Solar Energy Center,
  Technion, and the Weizmann Institute are among
  the academic institutions doing research in the
  area.
• Solel Solar is the worlds largest solar thermal
  company.
• Luz was the first in the world to produce
  large-scale electricity from solar thermal
  energy, but it went bankrupt in the early 1990s.
• Other interesting solar companies in Israel
• Chromagen Solar Heating Systems
• Rotem Industries Ltd. Solar Thermal
• 3G Solar Photovoltaics
• Zenith Solar Concentrated Solar

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Electric Vehicles and Energy Storage

• Government tax breaks for electric-only vehicles
  and hybrids.
• Electric cars will be taxed 10, while fuel cars
  are taxed 79 and hybrids at 30.
• US-based Project Better Place (PBP) is
  responsible for developing the supporting
  infrastructure. The company envisions 500,000
  electric outlets in parking spots.
• Nissan/Renault will most likely supply the cars.
  The battery will be owned by PBP to keep the cost
  of the cars low.

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Biofuels

• No current biofuel or biodiesel production in
  Israel, but some research is being done by the
  Agricultural Research Organization.
• Preference for technologies that would not divert
  agricultural land from food production.
• One biogas plant established, with plans to
  establish two more.
• A scenario of 5 voluntary or compulsory
  ethanol/bio diesel-blending ratio would create a
  market for 0.105 billion liters of ethanol or
  0.120 billion liters of biodiesel annually.
• BIRD funded joint ventures between Israel and MA
• GreenFuel Inc. and Israeli Algatech.
• SunEthanol and Israeli Applied Cleantech Ltd.

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Wind Energy

• A 2006 study estimated potential maximum
  installed capacity to be 500 MW.
• An existing wind farm on the Golan Heights will
  be updated to have capacity of 11.5 MW.
• Two new wind farms of total 50 MW are planned in
  the north of the country.
• Interesting wind energy-related companies are
  Levitan Energy, CAPS Energy, and Elspec Ltd.

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Fuel Cells and Hydrogen

• Several Israeli companies and universities are
  working in this field, but the industry has yet
  to see a manufacturing-scale breakthrough.
• Interesting companies include Engineuity RD Ltd.
  and Medis Technologies.

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Clean Water

• Israel is 2/3 desert and is among the world
  leaders in water technologies, especially
  irrigation and desalination.
• Mekorot is the national water company and
  supplies 70 of the nations water (80 of
  drinking water).
• 75 of sewage water is recycled for agricultural
  use. Second best in the world is Spain, with 12.
• Many leading universities are doing research in
  this area.
• IDE Technologies is one of the largest domestic
  companies in the area.

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Venture Capital

• Several cleantech venture funds have been
  established in Israel, including Israel Cleantech
  Ventures and Terra Venture Partners.
• According to a recent survey of the Israeli VC
  community, cleantech is the favored sector in
  Israel for increased investment.

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