An Overview of Israel’s Clean Tech Industry

07 August of 2009 by

Water technology, solar innovation, Israel’s electric cars: I’d originally written this story for ISRAEL21ca few months ago when we were planning on launching its new Environmentchannel. The new channel was finally up this week. Consider it a goodstarting point if you’d like to know more about Israeli technology andinvestment opportunities and what the future may hold:

When green evangelist Al Gore visited Israel last year (and Green Prophet was there)he gave a clear message. “The people of Israel can lead the way torenewable energy,” he told audiences. With its unique geographicalposition, and clean tech know how, he announced, Israel is a naturalleader in the field.

It’s a view that is echoed by many. Ian Thomson, the Californian co-founder of CleanTechies,a web site launched for clean technology professionals, agrees. “Israelhas a natural incentive towards clean tech because of its political andnatural geography,” he tells ISRAEL21c. The innovations that “makenatural sense in Israel, are often good for the rest of the world.”

“Israeli innovators have proven themselves in high -tech,communications, Internet, biotech, medical devices and more,” says MikeGranoff, a general partner at Israel Cleantech Ventures, and the head of oil independence policies at electric car company Better Place.

“The same drive, talent and creativity will serve them well in thenext great business frontier, technologies around sustainability,” hesays.

The field of clean technology emerged about 10 years ago. It’s anatural space for Israelis, who for more than 60 years have beenlooking for ways to grow crops on barren wasteland, to re-use scarcewater resources creatively, and to lower their reliance on oil fromenemy states.

Israeli entrepreneurs were quick to move in, creating new start upsin solar power, bio fuels and clean water, using experience they hadalready gained over the years.

Investors from around the globe flocked to Israel, and today thecountry has a number of world leading companies in a range of fields –from geothermal energy provider Ormat, to drip irrigation leaderNetafim, solar energy company Brightsource, electric car company Better Place, and Shari Arison’s new Miya consortium for water.

tanzania water israel cooperation photo 150x150 An Overview of Israel’s Clean Tech IndustryPiping hot water technologies

One of Israel’s largest areas of expertise is in the field of water– particularly drip irrigation, water reuse, recycling, reclamationtechnology, water security and monitoring.

Today there are about 250 companies working in the water sector inIsrael, of which 50 are designated as start ups. In 2008, Israeli watertech exports totalled $1.4 billion, an amount that has doubled since2005.

The United Nations, which rarely bestows praise on Israel, named itthe world’s most efficient recycled water user in a United Nationsreport issued on March 22, World Water Day.

Ronit Golovaty, an executive from the Department of Water andEnvironment Technologies inside Israel’s Export and InternationalCooperation Institute, knows Israel’s water technology marketintimately.

Foreign governments and investors frequently approach Israel lookingfor help with new water technologies to combat shortages and watersecurity, and it’s her job to help. While she’s happy to recommendbest-fit technologies, she is not just pushing sales in Israelicompanies, but is charged to be a solutions provider. Withoutregulations in place, it’s hard for countries to adopt new watertechnologies, she says, suggesting that local or national government bepart of any talks, if people are interested in Israeli water technology.

The Oxford graduate boasts that Israel is well equipped to tackle anumber of water problems, from water recycling, to wastewater use,irrigation and desalination.

toilet green prophet An Overview of Israel’s Clean Tech IndustryReducing water consumption in the US

She firmly believes that drip irrigation is something that the UScould find extremely beneficial. Today in the US, farmers get theirwater at highly subsidized rates, or even for free, and therefore haveno incentive to reduce consumption.

Water is equated with energy, and if regulation was in place to cut water costs, Israel’s Netafim or Plastro– another Israeli leader in the field – could offer America huge costsavings felt immediately, says Golovaty, pointing to a couple of simpleIsraeli government-regulated models that resulted in major watersavings.

“For domestic use in Israel, every home-owner has to install a double-flush toilet,and every consumer has to have a meter on their apartment,” she says.Having a measure of water use is important for people to understand howto start saving it, she adds. “In Israel we re-use 75% of ourwastewater. This is the largest percentage in the world. And it meetsabout 50% of our irrigation needs,” she explains.

Meanwhile, the Israeli government has set up two new projects to commercialize Israeli clean technologies: Israel NEWTech, a unit focused on water and energy and headed by Ofer Distel, and a sister project focused on Israeli alternative energy, run by Sigal Admony-Ravid.

For starters, according to Israel NEWTech, the Ashkelon SWRO(seawater reverse osmosis) desalination plant is the largest and mosteffective kind in the world.

It’s true, Israel does have some exceptional clean technologyinnovators, agrees David Miron-Wapner, the son of the reality show iconJudge Wapner from the People’s Court.

Manning the US desk at the Israel Center for Industrial Research andDevelopment, Miron-Wapner works directly with Israel’s Chief ScientistEli Oper to carry out international business and R&D activitiesbetween Israel and the US.

jatropha-seeds-biofuel-africaFrom drip irrigation to biofuel

One company in the field of water that he believes is tremendouslysuccessful is drip irrigation company Netafim – which saw revenues of$600 million in 2008, an annual growth rate of about 25 percent.

Netafim, which employs 2,400 people in 110 countries around theworld, is undoubtedly one of the oldest and biggest names in thissector. Founded in 1965, the company has been operating and supplyingsolutions to customers in the US, Europe, South America, Africa andAsia for decades.

Netafim’s success stems from the low-tech drip irrigation solutionthat it pioneered in agriculture. It is now, however, moving rapidlyinto the field of bio fuel production. The company recently announcedbio fuel projects in Peru, demonstrating that traditional businessesfrom Israel can be brought up to speed for modern needs.

“Peru benefits from several advantages: moderate climate, suitablesoil and adequate water resources, which will enable it to play aleading role in the future in the bio-energy market,” explains OferBloch, the CEO of Netafim at the time of writing this article.

“Netafim is the only company that can offer vast agronomicalknowledge and smart water solutions for growing sugar cane for theproduction of ethanol,” he tells ISRAEL21c. “Developing alternativeenergy sources – such as ethanol – will reduce the dependency of theworld on fossil fuel.”

Other successful companies in the water field, according to Miron-Wapner, include WhiteWater, which he says is “successfully blending Israeli expertise that will reach the market”; water technologies incubator Kinrot; Aqwise, a sewage treatment solution; and water consortium Miya, which has input from water expert Booky Oren.

“Oren is doing a tremendous job to promote Israel’s water sector, topursue a real, large-scale water enterprise,” says Miron-Wapner.

sun-glassesMaking sense of the sun

Aside from water, Miron-Wapner also believes that Israel is a leader in the field of solar energy. Aside from BrightSource Energy(formerly Luz), which has signed deals to build solar energy farms inCalifornia and Nevada, other Israeli solar energy leaders include Solel, ZenithSolar and AORA (formerly EDIG).

“It looks like BrightSource is moving forward very well in terms ofits testing field in Dimona, and it’s ready to fulfil its contract inCalifornia,” Miron-Wapner tells ISRAEL21c. Everything points to Soleldoing well also, he says. “Both look like they will be successful asmore solar projects come on line,” he adds.

DiSP,based on the technology of Prof. Abraham Kribus from Tel AvivUniversity, has promise for industrial rooftops, says Miron-Wapner, andhe sees David Faiman’s technology, from Ben Gurion University, nowbeing commercialized by ZenithSolar “as potentially among the best andmost efficient. The question is whether or not it can be brought to acommercial scale.”

When it comes to solar energy solutions in the real world, being the most innovative isn’t always key. The Israeli companies Ormat (ORO),Solel, and BrightSource have demonstrated this says Miron-Wapner. “Somany other factors come into play among which are regulatory andfinance issues,” he says.

Jack Levy, a general partner at Israel Cleantech Venturesalready holds some of Israel’s most unique clean technology companiesin his portfolio. Given Israel’s phenomenal success in the informationtechnologies business, he predicts that over time more Israelicompanies will start transferring their high-tech smarts to the fieldof clean-tech.

His firm, the first VC to focus on Israeli clean technologycompanies, has currently invested in Aqwise, Better Place, and theenergy savings company Metrolight,to name a few. “We’re looking for breakthrough technologies. For rapidgrowth,” says Levy, explaining that clean technology is not anindustry, but a sector and a brand.

“It’s a brand from an investor’s perspective and can incorporatedrivers of rapid growth across multiple industries. What’s driving thealternative energy market to grow is not dissimilar as to what’scausing water to grow,” he tells ISRAEL21c, connecting the dots betweenwater and energy, two of Israel’s strengths.

Israel clean technology is here to stay

If Israel excels in water and alternative energies, Better Placealso has to take a prize. It’s probably one of Israel’s best knownenvironmental companies – certainly the hottest in the internationalpress.

Founded in October 2007 by Israeli entrepreneur Shai Agassi, who hasbecome a global celebrity in the process, the company is developing theinfrastructure necessary to make electric cars a feasible reality.

Israel was the first country to sign up with Better Place, and thefirst blahs are already going up in Haifa. Since then, Denmark, the bayarea of San Francisco, Canada, Australia and Hawaii have also signed upfor the scheme.

What is notable here is that despite the current world economiccrisis, when companies are crashing like bowling pins, Better Place andvirtually all of Israel’s other clean-tech companies are not onlysurviving, but thriving.

Israeli clean-tech companies may not be hiring right now, but theyaren’t firing either, showing greater resilience to the recession. Arecent survey by online job placement company JobInfo, found thatemployees in clean tech are suffering less from pay cuts and lay offsthan their high-tech counterparts.

Experts predict that clean-tech could well become the country’sbiggest export market. “Even in the midst of the [financial] crisis,Better Place Denmark was able to launch, raising more than $100million,” admits Granoff. “Even with the price of oil, there is goingto be a lot of volatility with anything associated with energy, and notfor a short period of time. This volatility creates new opportunities.”

Levy agrees. With or without a recession in Israel, the US, or therest of the world, rapid urbanization and a supply-demand imbalance aregoing to keep the clean-tech industry growing.

“Lights are always going to get turned on, water is going to getdrunk,” says Levy. Expert in picking solutions that will impact energyand water needs for today and tomorrow, Levy concludes, “I can’timagine a different sector to be playing in right now.”

(This story was first published on ISRAEL21c – www.israel21c.org. To get Green Prophet news like this delivered in your inbox, drop us a line at contact@greenprophet.com).

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