Israel’s clean tech advances attract foreign investors’ green
TEL AVIV (JTA) — From cutting-edge geothermal power deep underground to wind turbines and solar panels capturing energy from the sky above, foreign investors are pouring money into Israel’s growing clean tech sector.
And it’s not just Jews.
“Every day I get calls from people asking for opportunities to invest in clean technologies in Israel,” said Michael Granoff, president of the New York-based Maniv Energy Capital and an investor in Project Better Place, the company working to make Israel a testing ground for an electric car.
“That to me is extremely encouraging,” he said. “I believe nothing will determine Israel’s prosperity more than the degree to which it is a leader in innovation around sustainability.”
Clean tech, a catch-all term for emerging technologies focused on renewable and more efficient energy consumption, is soaring in Israel. A wave of new start-ups, academic research projects and new venture capital funds are focusing on the industry, and multinational corporations such as the Coca-Cola Co. and General Electric are scouting out new technologies here.
Fueling the interest in environmentally friendly clean-tech solutions are skyrocketing oil prices, growing concerns about global warming and a push for sustainable solutions to the world’s energy problems.
Investing in Israel’s expertise may not only make good business sense but benefit the worldwide quest for cleaner, greener energy alternatives.
It also may constitute an opportunity to bolster Israel’s international reputation by linking the Jewish state with green innovation.
Jonathan Shapira, a recent American law school graduate who writes a blog on clean-tech investment in Israel, says Diaspora Jews can play an essential role by becoming either consumers of or investors in Israeli technologies.
“Every Jewish family and institution should consider installing solar panels, rooftop wind turbines or energy efficient lighting developed in Israel,” he said. “This will lower their electricity bill, protect the environment, benefit the Israeli economy and help position Israel as a world leader in clean technology.”
The imperative for developing alternative energy sources is particularly acute for Israel because its enemies’ strength derives in large part from the world’s dependence on their oil resources.
“It really makes sense for reasons of economics, but there is also the issue that so much is at stake here,” said David Rosenblatt, the vice chairman of the board of a new solar power company near Eilat, Arava Power, which is headed by Yosef Abramowitz. “This is doing something for Israel’s national security, protecting its energy independence through green power.”
Rosenblatt, who also runs an investment fund in New York, where he lives, said his investment in Arava Power is a Jewish venture as well.
“This is about clean energy, but it’s also about Jewish roots and what I can do to express it and where I personally have value to add,” he told JTA.
In Herzliya, three American immigrants in their 30s have created the first venture capital firm to target the Israeli clean-tech market, Israel Cleantech Ventures. They recently raised $75 million for their debut fund, exceeding the $60 million they originally set out to raise.
Glen Schwaber, one of the firm’s partners, said enthusiasm among investors for Israeli clean tech reflects Israel’s growing reputation as a potential incubator for new technologies that is buoyed by the country’s high-tech success stories.
“Israel has a reputation for innovation and technology, and a mature venture capital environment along with a successful history in entrepreneurship,” Schwaber said. “The next logical place for the clean-tech investor after Silicon Valley and the Boston area is Israel.”
The Jewish state is beginning to capitalize on its experience in such fields as solar thermal technology, wastewater recycling and desalination. Until recently, Israel had the world’s only large-scale desalination plant, off the coast of Ashkelon. Now countries such as China are building them.
“Israel is a great country to beta test some of these new technologies because it is a microcosm of the world’s needs: shortages of water, a large transportation fleet on per-capita basis, and an abundance of solar energy potential,” said Schwaber, 38, who made aliyah from Boston.
Among Cleantech Ventures’ investors are some big names in Jewish philanthropy, including the families of Edgar Bronfman and Stacy Schusterman.
Schusterman, CEO of the Samson Investment Co., a private oil and gas company based in Tulsa, Okla., said she sees her investments in Israeli clean-tech ventures, including Israel’s electric car enterprise, as business, not philanthropy.
“This is a business venture,” she told JTA in a phone interview from Tulsa. “We saw this as an opportunity to leverage Israel’s deep intellectual capital in an area we see as a burgeoning worldwide industry, and by investing it we would have the opportunity to create a hedge against our base business.”
She added, “This is an area where Israel should excel, so as a Jew I have every reason to help make that happen.”
Last month, the city of Los Angeles signed an agreement with Kinrot Incubator, a company located on the shores of the Sea of Galilee that helps entrepreneurs and researchers with water-based technological innovations.
The deal will enable Israeli start-up companies to use water and power facilities in Los Angeles for pilot projects and to conduct joint research with the University of California, Los Angeles on water projects.
Los Angeles is interested in using the Kinrot model to establish its own incubator for water-related technologies.
Assaf Barnea, Kinrot’s CEO, said that although the water market is not new, the hype over going green has given it a new shine in the eye of investors.
“They have now heard about it and want to be players,” he said. “There is huge hype but it’s not just hype. This is a market that is here to stay.”
Israeli invention could pave way for hydrogen cars
Everyone’s heard that old story about the scientist who invents a “magic pill” that turns water into gasoline — with the invention eventually getting into the hands of the oil companies that bury it, fearing they will be driven out of business when word gets out about their competition.
It sounds like science fiction, but believe it or not, that’s exactly what happened to Moshe Stern, head of C.En (Clean Energy), who said his company’s scientists have developed a revolutionary breakthrough that will enable automobile manufacturers to produce — and sell — cars that use hydrogen power. It’s a breakthrough that has been getting a lot of attention — and oil companies got wind of it, too, with one company allegedly offering him $50 million to shelve his project.
Stern didn’t take the money, though; he intends to see his hydrogen car project through. As a result, he said, for the first time the West has an opportunity to make a real dent in its dependence on OPEC oil.
Hydrogen has long been the great green hope for governments and environmentalists, as well as the ideal opportunity to lessen oil imports for Western countries — since hydrogen can be manufactured from water.
President Bush has set aside billions for development of the technology, and hydrogen is the preferred alternative fuel for public vehicles, like buses, in many cities. Among the cities with at least some public buses fueled by hydrogen are London; Reykjavik, Iceland; Perth, Australia, and Santa Monica — where nearly three-quarters of all municipal vehicles of all types are powered by the fuel.
Instead of producing carbon monoxide or other harmful pollutants, hydrogen fuel emits water vapor, which is certainly better for the environment than fossil fuel emissions — even though some scientists believe it should be considered a greenhouse gas.
Lower pollution and less money for OPEC — hydrogen sounds tailo rmade for the fuel problems that ail us. While Bill Gates of Microsoft fame may have been right when he said, “If GM kept up with technology like the computer industry has, we would all be driving $25 cars that got 1,000 miles per gallon,” the fact is that the industry says that hydrogen is still not ready for prime time.
While producing the hydrogen is easy enough, getting the fuel into the car and storing it in a fuel tank are some of the biggest obstacles for the technology. This, industry experts say, has traditionally been the deal-breaker for increased hydrogen use.
Most hydrogen vehicles on the road use a liquid form of the material, which requires a super strong and super heavy storage tank. Liquid hydrogen is unstable and needs to be insulated from the excess shocks of bumps and potholes that are a part of everyday driving, so the tanks themselves are large and heavy, and hold about five gallons of fuel — enough for barely 160 miles of driving.
Then there’s the issue of integrating the fuel into internal combustion vehicles that, for better or worse, are unlikely to be phased out anytime soon — as well as the question of where drivers are supposed to fill up, because hydrogen stations are rare.
All these are legitimate concerns that have kept hydrogen development restricted more or less to the laboratory, Stern said, and all concerns that are addressed and solved with C.En’s hydrogen storage and supply solution.
The difference? C.En’s tank uses hydrogen gas collected from the environment (i.e., not produced from fossil fuels) and enclosed in a thin but leak-proof glass container. The best part: Drivers will be able to buy “gas” at automotive or discount stores, fueling up approximately every 370 miles.
Stern said they can build a 16-gallon tank that weighs no more than 100 pounds,unlike tanks currently used for liquid hydrogen that weigh several hundred pounds.
“Our company’s breakthrough is in accumulating hydrogen in a glass material that is very small, only a few microns,” said Stern, who is also president of Environmental Energy Resources (EER), a waste treatment company. “You don’t need to transport hydrogen to fuel stations, and you don’t need pipelines. The tanks will be like a battery that can be replaced, and you can carry a reserve in the car.”
When you run out of hydrogen in one tank, according to Stern, you just pull out the empty cell and put in the fresh one, which will be good for another 370 miles.
The cells, in fact, will act just like batteries in electric or hybrid cars and fit right in with the standard internal combustion engine — which means that Detroit or Japan don’t have to retool their factories or production lines to build cars with the capacity for hydrogen cells. The know-how and means of production are in use right now, in fact, as almost every car manufacturer is already producing hybrids or straight electric cars.
George Sverdrup, technology manager for the U.S. National Renewable Energy Laboratory’s hydrogen, fuel cells and infrastructure technologies program, said that once the storage problem is solved, there is no reason hydrogen cannot be used as the premiere fuel to power cars.
“We can use hydrogen to decrease our dependence on imported petroleum, because it can be produced by a variety of domestic resources, including water and biomass,” he said, adding that his group has made a great deal of progress in recent years figuring out ways to store hydrogen more safely — a problem solved by C.En’s invention.
Stern is coordinator of the project and chief investor. Among the others are Israeli, as well as Korean, Japanese and Russian investors. The head researcher is professor Dan Eliezer of Ben-Gurion University, an expert in hydrogen who has done work for NASA and security organizations in Israel and the United States.
The team has conducted more than 100 tests over the past several years and is going to be conducting field tests in Germany, where the company will seek approval by BAM (the Federal Institute for Materials Research and Testing).