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The Business of Peace

Written By Brian Hicks

Posted June 7, 2007

KETURA, ISRAEL: What do you get when you mix an Israeli father and a Jordanian son? A bright idea and a hundred million dollars.

I am the first journalist to cover this story.

Arava Power Company

This morning I sat down with the founders of the Arava Power Company. Yossi Abramowitz is a bespectacled American-born Israeli with plenty of hair. Suleiman Halasah is from Karak, Jordan, and his shaved head is not framed by glasses. At Kibbutz Ketura, a cooperative agricultural settlement and renewables laboratory in southern Israel’s Arava Valley, Suleiman lives with his “kibbutz father” Yossi as both work on a bi-national solar power project with major profit potential.

The core concept is simple: This region gets 14 hours of sun a day during the summer and 360 sunny days a year–the most solar radiation anywhere in the world–but with only 3,000 residents it is mainly barren. Yossi and Suleiman, both engineers by training, are combining cheap land and free sun with existing concentrated solar power (CPV) technology on both sides of the Jordan-Israel border.The “peace dividend” between Israel and Jordan is a tangible economic benefit to the region, and one that has encouraged investors from inside and outside the area to put their chips down.

The Arava Power Company, their start-up, has already drawn three bids of $100 million for initial funding. That’s no small change, and combined with a two-year-old Israeli renewable energy act, credits derived from the Kyoto Protocol, and enough land to build a 100-megawatt solar array, the company will be able to capitalize within just a few years.

While the same sun shines down on both sides of the Arava (called Wadi Araba on the Jordanian side), there are major differences in the planning process.The Israeli Minister of Infrastructure, Binyamin Ben-Eliezer, announced recently that his country would soon subsidize up to 50 MW of renewable energy development, on top of previous agreements that the national power company must buy solar, wind, or other alternative generation for 20 cents per kilowatt-hour.

For Yossi, Suleiman and their associates, that is already profitable. They tell me that with CPV technology they can produce for 16 or 17 cents per KW/h. On the Jordanian side, King Abdullah has visited the Wadi Araba region, saying that his vision for employment of the poverty-stricken local population involves renewable energy.

Jordanian prices have tripled over the past two years, giving the Hashemite royals plenty of reason to worry and turn to the sun. But to date there are no clear government initiatives or financial incentives for alternative energy development.

Nevertheless, Suleiman has pursued connections with the special economic zone in Aqaba (the largest local city), which has been set up specifically to encourage regional economic development. He also has the support of General Mansour al-Rashid (ret.), a career Jordanian military man who has turned his attention to championing alternative energy in close cooperation with his former foes the Israelis.

All of this will play a major role in longstanding plans for an Asian-African-European electricity grid connection. If you doubt the potential for such a link, consider the undersea cables that already connect the Baltic States and the Nordic grid.

I recommended Swiss-based power conglomerate ABB based on its contract for the Estlink cable (as that project is known), and as the international power connection trend turns into a juggernaut, ABB is up 60% since I highlighted their position as the leader in this field. ABB will surely be first in line for a tri-continental cable connection.

Whether with start-ups like Arava Power Company or stalwarts like ABB, it is clear that “energy independence” is an awkward slogan and a very complicated proposition.

Energy options are needed, not a sort of reclusive retreat by each country into its own shell. Cooperation and diversification go hand in hand, and along with those come lucrative benefits for people who stay ahead of the growing trends.Regards,

Sam Hopkins