Carnegie Mellon University Department of History Baker Hall 240 5000 Forbes Avenue Pittsburgh, Pennsylvania 15213-3890 (412) 268-2880 April 19, 2012 To whom it may concern, This is to certify that on April 19, 2012 Rebecca Yasner submitted an Honors Thesis entitled “Maximizing Renewable Electricity in Israel: Energy Security, Environmental Impact, and Economic Development” to the History Department. This thesis has been judged to be acceptable for the purposes of fulfilling the requirements to graduate with college honors. Sincerely, Dr. Laurie Eisenberg Thesis Advisor Dr. Caroline Acker Head, History Department Dr. Jay Devine Dean, Dietrich College of Humanities and Social Sciences Maximizing Renewable Electricity in Israel: Energy Security, Environmental Impact, and Economic Development By Rebecca A. Yasner SENIOR HONORS THESIS Presented to the Faculty of the Dietrich College of Humanities and Social Sciences in Partial Fulfillment of the Requirements for Graduation with Dietrich College Research Honors CARNEGIE MELLON UNIVERSITY April 30, 2012 Acknowledgements I would like to thank my thesis advisor Professor Lauie Eisenberg of the History Department at Carnegie Mellon University for her guidance and enthusiasm. Professor Eisenberg’s eye for detail and knowledge of the Middle East were invaluable throughout the entire writing process. I would also like to thank Elie Fuhrman for his help on many calculations in this paper and for his continued support. This paper would not have been possible the encouragement, support, and love of family and friends. Notes from the Author This project was partially supported by a Small Undergraduate Research Grant (SURG) from the Undergraduate Research Office at Carnegie Mellon University. This thesis represents the views of the author and not those of Carnegie Mellon University. 2 Abstract The search for energy security and growing concerns over global environmental degradation, juxtaposed against the promise of economic development, have led to increased worldwide attention to the implementation of renewable electricity technologies. For the State of Israel, located amidst a hostile neighborhood of oil- supplying countries, the need for energy security is paramount. In addition, Israel’s global obligation to reduce negative environmental impacts has become a major focus of public policy. Moreover, favorable forecasts of economic growth in the Clean Technology industry in Israel are now the driving force behind sustainable innovation. It is in Israel’s best interests to make the implementation of renewable electricity in Israel a high priority through public policy initiatives as well as through industry development. The February 2010 Plan for the Integration of Renewable Energy Sources into the Israeli Electricity Sector (PIRES) by Israel’s Ministry of Energy and Water Resources, while well intentioned, falls short of putting Israel on track for large-scale, integrated deployment of renewable electricity technologies. The centerpiece of this study is the author’s modifications to this document, Yasner-PIRES (Y-PIRES), which will not only lead Israel to much needed electricity security, but will also help to reduce harmful environmental pollution and will provide extensive economic development through a more comprehensive implementation of renewable power into Israel’s electricity mix. 3 List of Abbreviations IDF Israeli Defense Forces IEC Israel Electric Corporation IPP Independent Power Providers MEWR Ministry of Energy and Water Resources PUA-E Public Utility Authority-Electricity PIRES Policy on the Integration of Renewable Energy Sources into the Israeli Electricity Sector Y-PIRES Yasner-Modified Policy on the Integration of Renewable Energy Sources into the Israeli Electricity Sector 4 Table of Contents Acknowledgements ............................................................................................................ 2 Notes from the Author ....................................................................................................... 2 Abstract .............................................................................................................................. 3 List of Abbreviations ......................................................................................................... 4 Table of Contents ............................................................................................................... 5 Introduction ........................................................................................................................ 6 Background ........................................................................................................................ 9 Electricity Security ........................................................................................................... 12 Environmental Impact ...................................................................................................... 28 Economic Development ................................................................................................... 38 Conclusion ....................................................................................................................... 46 Appendix A: Electricity Security Items ........................................................................... 48 Appendix B: Environmental Impact Items ...................................................................... 54 Appendix C: Economic Development Items ................................................................... 59 Appendix D: Yasner-Modified Policy on the Integration of Renewable Energy Sources into the Israeli Electricity Sector (Y-PIRES) .................................................................. 60 5 Introduction The search for energy security and growing concerns over global environmental degradation, juxtaposed against the promise of economic development, have led to increased worldwide attention to the implementation of renewable electricity technologies. For the State of Israel, located amidst a hostile neighborhood of oil- supplying countries, the need for energy security is paramount. In addition, Israel’s global obligation to reduce negative environmental impacts has become a major focus of public policy. Moreover, favorable forecasts of economic growth in the Clean Technology industry in Israel are now the driving force behind sustainable innovation. It is in Israel’s best interests to make the implementation of renewable electricity in Israel a high priority through public policy initiatives as well as through industry development. The February 2010 Plan for the Integration of Renewable Energy Sources into the Israeli Electricity Sector (PIRES) by Israel’s Ministry of Energy and Water Resources, while well intentioned, falls short of putting Israel on track for large-scale, integrated deployment of renewable electricity technologies. The centerpiece of this study is the author’s modifications to this document, Yasner-PIRES (Y-PIRES), which will not only lead Israel to much needed electricity security, but will also help to reduce harmful environmental pollution and will provide extensive economic development through a more comprehensive implementation of renewable power into Israel’s electricity mix. Israel’s standing as a newly developed nation with high population density, Western standards of living, a high birth rate and ever-increasing immigration, puts it in a unique place to act as a model for integrating renewable electricity for many different types of nations.1 As an “electricity island” which shares no electricity connections with its neighbors, Israel has the added challenge of proceeding virtually alone in its endeavor to include renewable electricity into its grid. In addition, Israel’s current electricity 6 demand continues to inch dangerously close its total generating capacity (see Appendix A1), a scenario that could potentially lead to hazardous rolling blackouts and inconsistent electricity. Thus, it is in Israel’s own best interest to pursue policies that encourage alternative, domestic, electricity fuel sources. Renewable electricity is electricity generated by renewable fuel sources such as wind, solar, hydro, biomass, and geothermal power. Although some consider it to be a renewable source of electricity, this study does not believe nuclear-generated electricity currently qualifies as renewable as the yet-unsolved issues with the safe disposal of nuclear waste prohibit it from being so. Conventional fuel sources such as coal, natural gas, and petroleum-based products are not renewable due to the fact that there is a finite amount of each resource within nature on the time scale in which human industry and economy use fossil fuels. Electricity security is the ability to generate and distribute all of a country’s electricity domestically without relying on fuel imports. Economic development refers to increases in both the per capita Gross Domestic Product (GDP) of a country as well as to decreases in the unemployment rate and the GINI Index. Environmental impact includes all negative effects of human activity on air, land, and water resources. In order to achieve electricity security Israel must place a large scale, long-term emphasis on including domestic renewable electricity into the current electricity mix. This emphasis, in the form of public policy, industry involvement, and private investment will put Israel on the path toward total electricity security. Currently, Israel relies primarily on