Is Israel becoming the next Energy Tech major player?
Thousands of participants are attending today the world 6th Annual Fuel Choices and Smart Mobility Summit in Tel-Aviv, to discuss the alternative energy, digital disruption and transportation nexus. Will Israel make it to the podium of top energy innovation games?
Unlike old prosperous western countries, Israel is a 70 years old country that has built its economic prosperity on the un-availability of natural resources, turning them often into a chance as for water scarcity and the Netafim unicorn.
Surrounded by outrageously rich oil/gas producing countries, Israel had not been able till recently to extract a single splash of black gold from its shores and territory.
But over the last decade, major discoveries of Natural Gas (NG) have dramatically changed the paradigm. By 2020, three offshore fields will be connected to the grid.
Is NG a blessing or a malediction for Israel? All the western countries who had built their development on oil and gas abundance, are switching nowadays to renewable sources of energy to meet with Kyoto and Post Kyoto commitments. In the same time, Israel is partly going the opposite way - lowering its ambitions on renewables, and building on NG to mitigate its global carbon footprint. Israel is planning to be full NG and alternative fuels by 2030 (NG representing 10% of total GDP in 2040). While the rest of the industrialized world is planning to move from fossil fuels (oil/gas) to full renewables. Just a reminder: gas is a fossil non-renewable source of energy.
In parallel, the local energy market is going through a privatization reform, with five power stations for sale only in 2018. The Israeli government works hard to attract foreign investors, to develop the know-how of this new industry and infrastructures.
We went on to map out global Energy and Utilities players' activities in Israel in the infographic below.
Following the Americans, some Europeans made their way to Israel over the last years. The year 2018 has even seen a conglomerate of 4 Indian new comers into the Israeli ecosystem, blessed jointly by both governments.
With the notable exception of General Electric who was present since the 90s, most foreign energy players have only started these years to explore Israel, both as a market and as a potential supplier of disruptive innovation.
Honeywell turned Nextnine’s acquisition in 2017 into its Cyber R&D center. Centrica had done the same with Panoramic Power’s acquisition in 2015 for $60M.
Two weeks ago, the first edition of the II4 international event gathered 400 top industrialists - among them top energy and utilities global companies - to elaborate on digitization and disruption of their manufacturing patterns. Based on Grove Ventures research, Israeli Industry 4.0 startups have received a total of $200 million in VC funding in 2017.
This summer, the giant ENGIE (former Gaz de France) invested in Homebiogas an Israeli waste-to-energy startup converting food waste into biogas for cooking.
Will Israel succeed in taking the lead on Energy Innovation race?
Remember how in 2011, Israel created Ecomotion Autotech community from scratch. With not even one single car manufactured in Israel, Israel managed to become “the Place to be” for car innovation with 500 active startups in the field.
In 2018, Israel is attempting to reiterate the performance - this time on Energy Tech and Industry 4.0. Without even being a leader of Energy transition, and with no national ambitious target for Renewables.
Let’s bet Israel will make it.