Israel to build Concentrated Solar Power plant in Negev desert

Israel signed a deal to build a 4 billion shekel ($1.05 billion) Concentrated Solar Power plant in the country’s south, aimed at boosting electricity production from renewable energy sources, the Finance Ministry said on Sunday.

The Finance Ministry has signed off on funding agreement that will enable the construction of an additional NIS 4 billion, 121-megawatt solar-thermal power plant at the western Negev Desert Ashalim site, the office announced on Sunday.

The agreement, approved by the ministry’s Accountant General’s Office, allows for the partnership Negev Energy Ltd. to conduct the building, operating and transfer (BOT) associated with the future power plant’s establishment. Negev Energy is a collaboration between the Arison-owned Israeli company Shikun V’Binui and the Spanish firm Abengoa Solar S.A.

Once complete, the solar-thermal plant will join a similar 121-megawatt facility already under construction at Ashalim, owned by Megalim Solar Power Ltd., a joint venture between BrightSource Energy, Alstom and the Noy Fund.

“This agreement is a milestone for renewable energy projects in the country,” said senior deputy accountant general, and inter-ministerial tender committee chairman, Yariv Nehama. “The project is unusual in its scope and technological innovation, which combines capacity with energy storage.”

All in all, the Ashalim site is expected to be the biggest of its kind in the world and will also include not only large-scale production, but also the possibility of electricity storage, the Finance Ministry said. The Megalim project is expected to be complete by 2017, according to Brightsource, while the Negev Energy project should be operating by the first half of 2018, the Finance Ministry said.

The two solar-thermal power stations, together with a future photovoltaic plant at the site, are slated to provide about 2 percent of Israel’s total electricity supply, the ministry added. Ministry officials meanwhile expressed hopes that the three stations at Ashalim will enable the country to meet government targets of generating 10% of Israel’s electricity from renewable energy sources by 2020.

A committee is in the process of publishing the tender for the PV plant addition, the ministry said. According to the a government decision in March 2008, Ashalim should have 270 megawatts installed capacity, once the solar-thermal and photovoltaic sites are complete.

The Negev Energy BOT is being financed by the European Investment Bank and the Overseas Private Investment Corporation (OPIC), the US government’s development finance institution, among other funding sources.

“This is a large-scale project whose financing combines groups and banks from Israel and abroad,” said Finance Ministry accountant general, Michal Abadi-Boiangiu. “This plant will be a major milestone toward meeting the government’s targets for energy production from renewable sources. I praise the tender committee on its important and professional work.”

The 121 megawatt Concentrated Solar Power plant, which will also be able to store electricity, will be built by a consortium of Israel’s Shikun & Binui and Spain’s Abengoa in Ashalim in Israel’s southern Negev desert near another solar plant.

The Concentrated Solar Power plant, to be built under a build, operate and transfer program, is expected to come online in the first half of 2018, the ministry said.

Both Concentrated Solar Power plants – along with a planned photovoltaic power plant nearby – will provide 2 percent of total electricity production in Israel, which has a target of 10 percent coming from renewable sources by 2020.

They will be financed by the European Investment Bank and the U.S. Overseas Private Investment Corp.