?Encouraging Solar Electricity Production in the OPT: Is It Just a Slogan- Roundtable (7)

Palestine suffers a significant shortage of natural resources, particularly the traditional sources of energy, oil and gas. This has posed significant challenges to the energy sector. First, it has made Palestine heavily dependent on energy imports. The country imports from Israel more than 86 percent of its electric power needs and 95 percent of the fuel needed to generate electricity. Second, the price of these imports is high, resulting in high costs for both Palestinian power generating companies and consumers. The annual electricity bill, for example, has reached USD 500 million, and when Israel raised prices in 2013 by 33 percent (form 2010 prices), electricity imports jumped to USD 650 million. The annual import of oil and its derivatives is around USD 800 million. Both oil and electricity imports deplete more than 12 percent of the Palestinian GDP. Worse, Israel controls the quantities of fuel imports, sets their prices, determines the time when they are allowed into Palestine and denies their entry (as is the case in the Gaza Strip in particular) at its sole discretion, let alone the commercial monopoly imposed by Israeli companies on Palestinian energy imports. Part of the dilemma is the loss the sector incurs as a result of financial leakage arising from Israel’s control of the energy sources and the absence of financial audit of reports and bills issued by the Israeli companies, in addition to arbitrary fees for non-existent services, such as renewable energy and carbon tax. Now after more than two decades of the Oslo Agreement, Israel still requires the Israeli Civil Administration approval for setting up stations and substations to generate power or to upgrade the existing grid. These are issues that cannot be resolved while negotiations are stalled because of Israeli intransigence. There is ample justification to consider alternatives for the current mechanism of energy provision to Palestine. The real challenge for policy makers and the private sector is developing a strategy for the foreseeable future, with new investments in the field, moving towards more reliance on renewable sources of energy. Such a move should enhance economic security on both the consumption and production levels.