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India and Israel are working towards their first agreement to cooperate in the renewable energy sector, expanding their strategic relationship to energy security.
A meeting to this effect was held in New Delhi on 1 December between India's minister for power, coal, new and renewable energy, Piyush Goyal, and Israel's ambassador to India, Daniel Carmon. India is keen on leveraging Israel's leadership in clean energy technologies to help it meet its ambitious renewable power generation targets.
"We are talking about an energy agreement with India in the field of renewable energy. India has an ambitious renewable energy target. The agreement is in the works," said Eyal Rosner, chairman and director of administration for the Alternative Fuels Initiative in Israel's Prime Minister's Office.
Israel's renewable energy push has been driven by its lack of conventional hydrocarbon sources in a neighbourhood which has been endowed with them. Israel plans to reduce the share of oil in its transport sector by 30% by 2020 and by 60% by 2025. The country recently discovered some gas.
"India and Israel plan to ink an MoU (memorandum of understanding) wherein India can leverage the technology. Firms from both the countries can work in each other countries. They are good in technology. An MoU is being worked upon," said a senior Indian government official, requesting anonymity. In September, Prime Minister Narendra Modi met his Israeli counterpart Benjamin Netanyahu in New York on the sidelines of the UN General Assembly (UNGA) meeting, the first such meeting between the premiers of the two countries in a decade.
Israel has established itself as a key and critical partner of India in fields as varied as defence, agriculture and high technology. It is also the second largest arms supplier to India. According to the Indian government, India-Israel trade reached $6.01 billion in 2013.
The two countries are also negotiating a free trade agreement (FTA) covering trade in goods and services. A spokesman for Israel's embassy in New Delhi in an emailed response confirmed that ambassador Carmon had met minister Goyal on 1 December and "discussed with him the possibility of signing an MoU in renewable energy between Israel and India.
Among other issues, this agreement will entail possible ways to cooperate such as capacity building in renewable energy, exchange of delegations and joint research and development." Queries emailed to the spokesperson at the ministry of new and renewable energy remained unanswered at press time.
This comes at a time when India is working on a plan to form an association of countries with high solar power potential, aimed at lowering the cost of solar energy and improving the country's standing at the global climate change and environment protection discussions.
While India has a solar generation capacity of 2,900 megawatts (MW), the Bharatiya Janata Party (BJP)-led government has substantially revised an earlier target of achieving 20,000MW capacity by 2022 to 100,000MW. This would require an investment of around Rs.6.5 trillion over five years.
Of India's installed power generation capacity of 2,54,049.49MW, renewable power has a share of only 12.47%, or 31,692.14MW. "We will reduce the monopoly power of oil. It has strategic, economic and environmental implications. We are in the hands of a small group of countries," said Rosner, who is responsible for reducing Israel's dependence on oil.
The Indian government's strategy to focus on renewables also stems from the fact that India has an energy import bill of around $150 billion, which is expected to reach $300 billion by 2030.
India imports 80% of its crude oil and 18% of its natural gas requirements. India's National Action Plan on Climate Change recommends that the country generate 10% of its power from solar, wind, hydropower and other renewable sources by 2015, and 15% by 2020.
The proposed memorandum of understanding also comes at a time when the downward swing in international crude oil prices could make it less viable to tap clean technology and unconventional hydrocarbon sources such as shale oil and gas.
Rosner was quick to dismiss the argument: "If the oil prices come down to $30 per barrel, then we might have a problem. Right now, it's not impacting us." Crude oil prices in the Indian energy basket have dropped from $109.05 a barrel in June this financial year to $67.98 per barrel on Thursday. The price of oil peaked at $132.47 a barrel in July 2008.
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