VZCZCXYZ0019
PP RUEHWEB

DE RUEHTV #2765 3451506
ZNR UUUUU ZZH
P 101506Z DEC 08 (CCY ADDED CAPTION AD09FBBB/MSI6336)
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC PRIORITY 9544
INFO RUEHXK/ARAB ISRAELI COLLECTIVE
RUEAEPA/HQ EPA WASHDC
RHMFISS/DEPT OF ENERGY WASHINGTON DC

UNCLAS TEL AVIV 002765 
SENSITIVE 
SIPDIS 
 
DEPT FOR NEA/RA, NEA/IPA, OES/SENV 
EPA FOR INTERNATIONAL - Metcalfe 
DOE FOR EERE 
AMMAN for ESTH - Bhalla 
C O R R E C T E D  C O P Y  (ADDED SENSITIVE CAPTION) 
E.O. 12958: N/A 
TAGS: SENV ENRG EINV IS
SUBJECT:  ENERGY DG BERATES GOI TREASURY MYOPIA 
 
¶1. (SBU) GOI Ministry of National Infrastructure (MNI) Director 
General Hezi Kugler scolded Israel's Finance Ministry for not 
including renewable energy in the fiscal stimulus plan it has 
announced.  In a surprisingly glum statement to the 2008 Electricity 
Conference of the Union of Electrical Engineers, Kugler said on 
December 4 that the Treasury's lack of support was a death knell to 
the country's renewable energy plan.  By excluding energy subsidies 
from the fiscal package planned to keep the Israeli economy from 
tipping into the recession that is pulling down the global economy, 
he said the Finance Ministry was being short-sighted and missing the 
big picture. 
 
¶2. (SBU) Kugler's stand chiefly concerned the need for approval by 
the government of feed-in tariffs regarding alternative energy in 
Israel.  These tariffs guarantee a higher rate of compensation to 
private electric power producers who feed in to the grid; a feed-in 
tariff of NIS 2.01 per kilowatt hour has been proposed by MNI, 
compared to NIS 0.48 which is the consumer-billed rate per KW Hour. 
This subsidy by the government is the stimulus for major Israeli 
solar and other alternative energy producers to start production at 
plants in the 50KW to 5 MW range. These companies are confident they 
can meet and exceed Israel's goal of drawing 20 percent of its 
energy from renewable sources by 2020.  The GOI Finance Ministry, 
reported the Jerusalem Post, defended its action, claiming that good 
fiscal management demanded the government find positive 
contributions to the treasury, not new subsidies. 
 
¶3. (SBU) In a separate conversation, Kugler told ESTOFF that the 
feed-in tariff rates still had to be approved by the public utility 
Boar, but he was confident that would be done soon. (Noe: a high 
feed-in tariff has already been approvd by the utility board for 
small-scale power supliers generating (less than 50KW), which 
include the few businesses and consumers who have indepenent 
generating capacity.)  More critical is gaining parliamentary 
approval that Finance should fin the funds to cover the incentive 
cost for alterative energy suppliers.  MNI believes this subsidy 
cost is merited on both energy security and environmental grounds. 
Privately, Kugler admits it is astounding that Israel is not using 
the technology that Israeli companies are already installing in 
California. 
 
Cunningham