Israel's National Infrastructures Minister Uzi Landau has signed the first power purchase agreement (PPA) for renewable energy in the country's history, with Ketura Sun, the joint venture between Arava Solar Power Company (APC) and Kibbutz Ketura, which is developing a 4.9MW plant in the southern Arava near Eilat. The agreement, which will stretch over 20 years, is said to be worth NIS 250 million.
By signing the contract, the Government committed to purchasing every kilowatt-hour produced by the Ketura solar photovoltaic field, at a rate of NIS1.49/kWh for the full 20 years.
“This process sometimes has to be forced through, but it is a new initiative which we will continue to push forward,” the minister said.
Head of the public utility authority, Electricity Amnon Shapira said, “There were a lot of unforeseen issues that arose from drafting a PPA for solar power. However, the two teams from the IEC and APC were extremely professional. To my dismay, this is the first time that I've seen negotiations in the electricity market take place so politely and with such respect on both sides.”
APC chief executive officer, Jon Cohen said they had learned an important lesson during the three-year process to reach this point. “It's not easy being the pioneer company, in a pioneering industry, in a pioneering state.”
The project, which is expected to be the first of many APC has in the pipeline, will be online by the middle of 2011 providing it receives the financing applied for from Bank Hapoalim. Siemens bought 40% of the company in 2009 and will provide the equipment and project management.