JERUSALEM (Reuters) - Italian energy firm Enel SpA (>> Enel) said it was looking to collaborate with Israeli startups to develop new technologies to make traditional and renewable energy production more cost-effective.

Enel, Europe's biggest utility, is teaming up with Israeli construction firm Shikun & Binui (>> Shikun & Binui Ltd) in opening an innovation lab in May that will look for companies to develop projects.

"We don't want to be the Kodak or Nokia of the energy industry," Fabio Tentori, head of Enel's innovation hubs, told Reuters on the sidelines of a business conference. "Somebody for sure is going to disrupt the energy industry and we want to be there."

Producing and selling electricity is becoming more of a commodity so margins will come down, Tentori said, noting that renewable energy was a particular focus.

Enel is not able to go it alone so it is seeking help in Israel, which has one of the largest tech centres in the world.

Tentori said that at the outset Enel will collaborate with startups and only later invest in them.

"We have already evaluated more than 100 companies and we are collaborating with 10 of them," he said, without elaborating.

Orry Ben-Porath, a vice president at Shikun & Binui, said companies for the incubator-style lab will receive 1 million shekels ($295,000) from Israel's Innovation Authority, the government's high-tech investment agency, plus additional funds from Enel and Shikun.

He noted that despite the differences in their businesses, there still is some overlap, especially companies involved in "infrastructure that is connected to the digital world".

($1 = 3.3923 shekels)

(Editing by David Evans)

By Steven Scheer

Stocks treated in this article : Enel, Shikun & Binui Ltd