Last week, the Israeli energy firms Enlight Energy and NewMed Energy (formerly Delek Drilling) announced a plan to work together on renewable energy projects throughout the Middle East and North Africa.
What is interesting is that the new partnership will aim to develop projects with countries that joined the Abraham Accords agreement (i.e. Morocco, the United Arab Emirates, and Bahrain), but will not be limited to them only. Saudi Arabia and Oman, who have no diplomatic relations with Israel, are also candidates for the development of renewable energy. It will include wind and solar energy projects as well as energy storage in these countries.
It is interesting to note that both companies come from the opposite spectrum of the energy development.
Since its founding back in 2008, Enlight has been developing and financing solar and wind projects. Its success has enabled the Israeli firm to grow beyond the national borders and complete projects in Spain, the US, Serbia, Hungary and Sweden.
NewMed Energy, formerly Delek Drilling, has been leading the development of the main Israel gas fields such as Leviathan, Tamar , Tanin and Karish. Between 2016 and 2021 the stakes in the last three have been sold to other companies. However, the company continues to hold over 45% of the stake in the largest gas field, Leviathan, which contains twenty two trillion cubic feet of gas.
The discovery and eventual operation of gas fields have enabled Israel to be more independent when it comes to energy. This is one of the reasons why Israel have been spared somewhat from experiencing energy crisis that has been acutely felt across the EU. In fact, the EU has been inquiring about a possibility of buying Israeli gas as an alternative to Russia’s.
Despite the availability of the traditional sources of energy, countries in the region are actively pursuing the alternatives. Prospects of running out of current reserves, combined with the global movement to switch to renewable sources, resulted in adoption of new policies and of setting new targets in order to make this transition happen. For Israel specifically, its goal is to generate 40% of its electricity needs from alternative sources by 2030.
Several companies that used to work exclusively in the fossil fuels field, have been making steps towards greener alternatives in recent years. To broaden its horizons and to make this shift, Delek Drilling decided not only to re-brand and change its name to NewMed, but to move into renewables and alternative energy such as hydrogen.
Therefore, this newly formed partnership will “strive to bring the renewable energy revolution” as stated by NewMed’s CEO Yossi Abu. Enlight will be a controlling shareholder during both the construction and operational phases of the new venture. At the same time, both companies will be using local partners to advance new initiatives and execute projects.