Energy Resiliency
A New Way for Israel to Tap into the Future
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Discoveries of natural gas off the coast of Israel in the past decade, coupled with the recent start of long-planned deliveries of natural gas from Egypt, have led to a debate about Israel’s energy future. While the recent developments present Israel with the prospect of enhancing its energy self-sufficiency, potential risks remain as the Israeli government prepares to shift to an energy mix increasingly dominated by domestic and imported natural gas.
Israel is very much an “island” in terms of electricity supply. For political reasons, its electrical grid is not connected with those of its neighbors. Until recently, Israel had discovered little in the way of domestic deposits of fossil fuels to generate electricity. As a result, the country has come to rely on imported coal for generating the lion’s share of its electric power (see Figure 1).
Figure 1 — Coal Is Israel’s Primary Source of Electric Power
SOURCE: Natural Gas and Israel’s Energy Future, 2009.
But the country’s electric-power system is now running out of capacity to meet the demands of its growing economy. Because of long lead times, Israel will soon need to make expensive, momentous decisions about investing in new generating capacity. Those charged with planning and implementing the nation’s energy policies need to consider likely future levels of demand, the costs and availability of supply, the security of supply, its reliability, the environmental effects, and land use priorities. Decisions about such matters will have to be made under conditions fraught with uncertainty about what the future might hold regarding each of these variables.
A RAND analysis has sought to help the Israeli government exploit the use of natural gas while minimizing the potential drawbacks. The analysis applied an innovative quantitative approach, called “robust decisionmaking,” designed to guide planning in the face of great uncertainty. Rather than trying to find an optimal strategy for some “most likely” future, this approach seeks resilient strategies that are robust — that is, strategies that perform well enough across a large range of plausible futures. Using this approach, we investigated (a) how large a role natural gas should play in Israel’s energy balance and (b) what energy strategy would offer the best guarantee of a reliable supply of natural gas.
Israel’s first line of defense for energy security through the year 2030 is to increase energy efficiency as a way to curb growth in energy demand.
The study found, for example, that Israel’s first line of defense for energy security through the year 2030 is to increase energy efficiency as a way to curb growth in energy demand. If demand is left unchecked and follows a high-growth path, it would be hard for Israel to choose any strategy that would meet its goals. Israel should also increase its imports of natural gas up to the limits of its existing pipeline capacity. However, it should draw on its domestic sources before investing in infrastructure to import additional natural gas. Meanwhile, the country should plan for a liquefied-natural-gas terminal for increased future imports but should delay constructing this terminal until future demand and costs become clearer.
Israel is not alone in facing difficult questions about its energy security — or, indeed, about other types of large-scale infrastructure investment. The methods used to help answer Israel’s questions for Israel could be helpful for other nations and regions as well.
Lights Out?
Israel’s electric-power system is pushing the limits of its capacity. On an exceptionally cold January night or warm July day, peak nationwide demand could (as it has in the past) come within 95 percent of the current nearly 12 gigawatts of total capacity of the Israel Electric Corporation (IEC), the near-sole supplier of electricity to the Israeli grid. Because the country depends solely on itself for all its electricity, even a small decrease in the reserve would threaten the entire system. If just one of Israel’s major electric plants were to go off-line during a period of peak demand, the country could be subject to blackouts.
Israel’s Ministry of National Infrastructures warns of a potential shortfall of as much as 8 gigawatts in the next decade unless substantial investments are made in new capacity or unless Israeli households and businesses make extraordinary efforts to conserve electricity. An emergency plan is under way to build new small gas plants quickly while the ministry and IEC seek to build a new coal-fired power plant.
But imported coal brings its own problems. Coal plants are large and expensive and need to be sited next to a source of cooling water and close to a terminal for unloading coal, which means they need to sit along Israel’s densely populated coast. Unless outfitted with expensive pollution-control equipment, coal-fired plants emit large amounts of sulfur dioxide and other pollutants.
Burning coal also releases more greenhouse gases, principally carbon dioxide emissions, per unit of energy than any other fossil fuel. Israel is likely to join the rest of the developed world in seeking to reduce its greenhouse emissions. But adding substantial coal-fired capacity to the electric-power system would make it difficult, if not impossible, for Israel to reduce its carbon dioxide emissions in the next two decades.
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