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Home to two million people, the Gaza Strip sits squeezed between Israel and the Mediterranean Sea on a bit of land just twice the size of Washington, D.C. Gaza is the smaller part of Palestine’s two territories; you could walk the length of its southern border with Egypt in under three hours. But land is not the only thing that’s long been in short supply in Gaza. As the war between Israel and Hamas, the Palestinian militant group that rules the region, has made clear, Gaza is also increasingly bereft of water.
Over the course of the tragic war, water infrastructure has played an unprecedented role. In the aftermath of Hamas’s massacre and kidnapping of Israeli civilians on October 7, the Israeli government took measures to halt drinking water — as well as aid, food, and electricity — from entering the Strip. First, on October 9, Israel shut off the pipelines that usually send water into Gaza and halted deliveries by truck. And while it turned back on some of the pipelines on October 15, it didn’t restart the electricity or the fuel shipments that power Gaza’s desalination and wastewater treatment plants.
Yet these harsh measures in recent weeks belie a much longer-term problem, as a deeper dive into the region’s infrastructure reveals. Palestinians in Gaza have not had access to safe or ample drinking water for decades.
“The water crisis that Gaza is facing is a chronic crisis,” Dr. Shaddad Attili, the former Palestinian minister of water and head of the Palestinian Water Authority (PWA) from 2008 to 2014, told me. “But now water is being used as a weapon. If they don’t get killed by missiles, they will die from the contaminated water that they’re using.”
The Israeli Defense Forces, the water authority in the West Bank, and COGAT, the Israeli body responsible for the government activities in the Palestinian territories, all did not reply to requests for comment by the time of publication.
There are three natural water resources that run through Israel and Palestine: the Jordan River Basin on the eastern border; the Mountain Aquifer, which runs directly through the West Bank; and the Coastal Aquifer, on which Israel is upstream and Gaza is downstream. The majority of the water comes from these three sources, but since the region is a desert geography, water is generally in short supply.
Israel acquired control over all the water that runs through the Israeli and Palestinian territories in the Six-Day War in 1967 when it seized the Gaza Strip from Egypt, the West Bank from Jordan, and the Golan Heights in the north from Syria. In November of that year, Israel introduced a military order stating that Palestinians could not construct any new water infrastructure without first obtaining a permit from the Israeli army. Israel gave, and continues to give, these permits sparingly.
Today, the water discrepancy is striking. While there are eight times more Palestinians living in the West Bank than Israeli settlers, 70% of the water output is given to the settlements, where it is largely used for farming, according to an April 2023 report on the West Bank’s water deprivation by the Israeli humanitarian organization, B’Tselem.
During the Oslo Accords in the mid-1990s, the West Bank won some rights to run their own pumping stations in select parts of the territory. Today, they still need to earn permits from the Israeli military in order to build new pumping stations. Gaza used to pump their water from the Coastal Aquifer, but developments over the past 30 years have made that water inaccessible.
Prior to this war, the water situation in Gaza was already dire. The World Health Organization said that Gaza’s water supply was unable to meet the minimum requirement for daily per capita water consumption.
Gaza has some unregulated pumping stations that pull water up from the aquifer, but they’re not a major cause of the problem. The Coastal Aquifer extends from a town called Binyamina in Northern Israel to the Sinai Desert in Egypt. Just 2% of the total aquifer passes through Gaza. Through the late 1990s, it supplied drinkable tap water to most of Gaza’s residents. While it historically has provided 95% of their freshwater, it’s unusable now for a few reasons.
First, Gaza’s population growth rate is among the highest in the world, with almost half of the population under 18 years old in 2022. High population growth means the already scarce groundwater can no longer replenish fast enough to meet demand.
But there are deeper problems with the water’s quality. Seawater seeps into the aquifer since it’s so close to the coast and untreated wastewater has polluted the aquifer for decades to a point that it’s no longer safe to drink. In 2020, a study in the journal Water said that the quality of groundwater in the Coastal Aquifer had “deteriorated rapidly,” largely due to Israeli pumping.
“At least 95% of the freshwater (from the aquifer) is either inaccessible or not drinkable,” said Jordan Fischbach, director of planning and policy research at The Water Institute and author of a report on the public health impacts of Gaza’s water crisis in 2018.
As a result, the Coastal Aquifer — the primary source of Gaza’s water — is essentially out of commission. Residents of Gaza are now left with only about 20% of their needs filled.
But those sources have also proven to be unreliable.
The first are the pipelines, which were built with funding from international humanitarian aid. The pipelines run from Israel-controlled fresh aquifers and the water is paid for by the Palestinian National Authority (PA) in the West Bank. These are the pipelines that Israel stopped sending water from following Hamas’ attack on Israeli civilians.
But even in the best of times, the pipelines only supply around 10% of the water demand in Gaza. Attili from the Palestinian National Authority said that the water is combined with some of the unsafe brackish water in order to increase volume.
The second source of water are small-scale desalination plants, which turn seawater into potable water, but they rely on electricity to run.
Usually they provide another 10% of Gaza’s water, but when Israel halted the importation of fuel and shut down electricity transmission into Gaza, these plants stopped running too.
However, even when electricity and fuel are available, over one-third of plants are not monitored, maintained, or officially regulated. “A number of construction materials, fuel and other things you would need to build and power drinking and wastewater facilities are considered ‘dual use.’” said Fischbach, meaning they could also be used to build weapons. “These are types of materials that are restricted by both Egyptian and Israeli authorities.”
A 2021 study showed that 79% of desalination plants are unlicensed and 12% of water samples tested showed dangerous contamination levels.
“Desalination is necessary to get anything even close to drinking water quality and only a fraction of [desalination plants] are actually licensed and monitored” said Fischbach. “Many of them are producing water that we would still consider below drinking water quality.”
He added that most of them don’t run to their capacity anyways because they are so energy intensive and Gaza doesn’t have enough electricity.
Gaza also gets water from water trucks controlled by humanitarian aid or delivered by the Palestinian National Authority. This water passes directly through Israeli land, which means Israel was able to easily halt deliveries in the wake of the Hamas attacks.
In recent weeks, some residents of Gaza have resorted to drinking sea water or brackish water directly from the Coastal Aquifer. Not only are these not sources of freshwater, they are also further polluted by untreated sewage running through the region.
Israel’s decision to cut electricity to Gaza also meant that the wastewater treatment plants can’t run. Treated wastewater is used for showering and other sanitation uses. But when it’s not processed through a plant, wastewater runs into the aquifer and groundwater, further polluting what’s left of their drinking sources.
While the situation is worse due to the lack of electricity from the war, Gaza has never had ample wastewater treatment plants.
“For two decades now Palestinians have been prevented from building and maintaining the infrastructures that keep wastewater out of the aquifer,” says Sophia Stamatopoulou-Robbins, a cultural anthropologist and professor at Bard College. She is the author of Waste Siege: the Life and Infrastructure of Palestine.
In the West Bank, the aquifer is deep, carrying around 340 million cubic meters of water every year, so wastewater that has been somewhat treated can be further cleaned by soil and rock as it seeps through the aquifer. But Gaza’s aquifer is very shallow — its estimated to carry only about 55 million cubic meters per year —, and therefore cannot clean the water. Instead, it needs extensive infrastructure.
“In Gaza, you would need an incredibly high sophistication of technology to permit the wastewater to go safely into the ground,” says Stamatopoulou-Robbins. “Even the kind of concrete containers that would hold wastewater are not permitted to be maintained or built.”
In addition to the plants themselves, you would need piping to connect buildings to the wastewater treatment plants, she adds. “So all of the conveyance technology and infrastructure which is expensive anywhere in the world, all of that is subject to Israeli controls and tends to be prevented.”
As is the case with desalination plants, neither Israel nor Egypt allows the necessary materials into Gaza for building wastewater treatment plants because those materials are also considered dual-use materials.
Even as Israel turned the water and electricity back on, there are questions around how many of these desalination and wastewater treatment plants have been bombed and are no longer running.
As far as logistically turning off these resources, it’s fairly straightforward. “The ability to shut off electricity transmission is quite easy,” said Fischbach. “It’s just flipping a switch — the same way with a rolling blackout. Fuel imports are also easy. Nothing is going into Gaza. As far as drinking water lines, you can just not pump that water. So the logistics are easy.”
Several reports of hygiene related diseases spreading through cramped spaces are surfacing in recent days. Doctors in Gaza are saying that patients are showing signs of disease caused by overcrowding and poor sanitation. Children are suffering from diarrhea, lung infections, and rashes.
“The desalination plants are out of service because there’s no electricity, the sewage treatment plants are out of service because there is no electricity. And because our people now take refuge in shelters, there is a hygiene problem,” said Attili. “I have gone to so many conferences where we say water is a tool for cooperation, not conflict, and they all agree, but now the international community remains silent.”
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On ‘precariously low’ oil stockpiles, China’s ammonia milestone, and a PFAS destroyer
Current conditions: The wildfires in France and Europe are slowing, but three firefighters have died and the looming heat wave could bring yet more disaster • New York and New Jersey are facing flash floods as a storm system makes its way across the Northeast United States • Days of thunderstorms are causing floods across Vientiane, Laos’ sprawling capital.
Last month, I toured Commonwealth Fusion Systems’ headquarters in small-town central Massachusetts. The place was abuzz in activity. On the factory floor side, workers were assembling the magnets needed to ultimately form the torus-shaped reactor — think a giant doughnut with an interior that curves like the core of an apple — called the tokamak. On the actual reactor side, SPARC — the prototype that CFS expects will make history next year as the first private enterprise and only tokamak to ever generate more energy that it took to start the fusion reaction — was starting to look like a functional machine from my view on a second-story walkway overlooking the sterile assembly room. The old joke that fusion is the energy source of tomorrow — and always will be — certainly didn’t ring as funny now. I’ll tell you who isn’t laughing: All the new investors that just poured another $1 billion into CFS. The company announced its latest funding round early this morning, which brings the startup’s total fundraising since its launch as a spinout from the Massachusetts Institute of Technology in 2018 to $4 billion. CFS now accounts for 30% of all the private capital that has flowed into fusion. What distinguishes this round, my colleague Katie Brigham wrote, is that the money is coming from a bunch of institutional investors, such as pension funds and sovereign wealth funds, rather than venture capitalists. On a call with reporters this week, CFS’s newly-named chief financial officer, Lorence Kim, said it’s the first-time institutional investors comprised the majority of the new funding. When I asked the company’s spokeswoman for a percentage estimate breaking down the new versus old investors in this round, she declined to comment. Kim cautioned that the funding isn’t the kind of capital you raise before launching on a stock market. But his hire is notable. The former Goldman Sachs banker famously helped take the pharmaceutical giant Moderna public and held the top financial role through the start of the Covid-19 pandemic.
Meanwhile, a federal Superfund site at a facility in Kentucky once used to enrich uranium for atomic bombs is being transformed into a data center. On Wednesday, the Department of Energy announced a deal between investment giant Brookfield, utility behemoth NextEra Energy, and three local power providers to redevelop portions of the Paducah site into a $100 billion data center campus. “By transforming former DOE sites into engines of innovation and economic growth, we can revitalize communities with increased tax revenue and thousands of jobs, while also strengthening America’s energy security,” Secretary of Energy Chris Wright said in a press release.
The Federal Reserve held the country’s benchmark interest rate steady at Wednesday’s meeting of the U.S. central bank’s top brass. But three bank presidents voted to increase rates as renewed fighting in Iran sent energy prices upward. The dissent “underscored officials’ fraying patience with looking past another price shock on the heels of tariff-related increases last year and with robust demand stemming from the artificial-intelligence buildout,” The Wall Street Journal reported. That is, of course, bad news for renewables and other clean energy developers who rely on cheap upfront money to build, as my colleague Matthew Zeitlin has written.
But there are potentially bigger problems afoot for American energy consumers. U.S. crude stockpiles fell sharply last week as American refineries ramped up production to seize on surging fuel prices as fighting erupted in Iran. The stocks have now reached “precariously low” levels, analysts told the Financial Times, meaning there’s far less cushion if the war worsens the supply shock.
Last month, the energy team at the liberal policy shop Third Way assembled 100 swing voters from across the country to talk about the data centers that poll after poll shows are becoming less and less popular, to put it mildly. The conclusion of the discussions was this: “America’s opposition to data centers has less to do with their feelings about artificial intelligence and more to do with their anger and distrust of large corporations and government.” The findings, shared with me exclusively in advance, showed that most participants were open to a new data center if they believed it would come with tangible benefits for their communities. While some investors, such as “Shark Tank” star Kevin O’Leary, have tried to present those offerings, “the trust isn’t there.” While Emily Becker, the director of Communications for Third Way’s Climate and Energy Program, told me she was “not surprised by how much opposition there was, what was heartening is people understood that benefits were possible. They just didn’t think they would receive them.”
Speaking of data centers and the public trust: NV Energy has accused one of the biggest developers of data centers in Nevada of attempting to illegally bypass state regulators to determine through private arbitration how and when the Berkshire Hathaway-owned utility should provide power to its operations. The lawsuit, filed Friday in Washoe County’s Second Judicial District Court, alleges that the developer, Tract, is trying to skirt the usual process by which the state Public Utilities Commission determines what share of the utility’s electricity should go to the large power user. Tract, according to the complaint, “wants NV Energy to reserve and provide enormous amounts of power for Tract's private development while shifting the infrastructure and energy costs to Nevada families, small businesses, and existing customers who did not cause them.” Sorting out those questions through arbitration would help to “keep these issues hidden” from state regulators and the public, NV Energy said, according to The Nevada Independent.
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When the Biden administration attempted to overhaul regulations on electrical transformers to make the key grid components more efficient, the proposal drew fierce bipartisan pushback amid a years-long nationwide shortage of the equipment. Ultimately, the Biden administration backed down and changed the proposal after receiving public comments. That would have seemed to provide some certainty for factories. But just two years after the final rule won acclaim from across the industry, the Trump administration is now considering revising the requirements for rules set to take effect in 2029. “We’re not aware of anyone asking for this,” Andrew deLaski, executive director of the Appliance Standards Awareness Project, told Utility Dive. The group supported the 2024 transformer rule and other stricter efficiency requirements DOE finalized during the Biden administration.
China has signaled it’s planning to take on what Bloomberg described as a bigger role in steering global negotiations over climate change. The 15th five-year plan published Monday by the Ministry of Ecology and Environment and other key agencies outlines how Beijing “will constructively lead the multilateral governance process to address climate change” and states that “China’s influence, guiding capacity, shaping power, and moral appeal in global climate governance will be significantly enhanced” through the end of the decade. Beijing is already looking to increase how much renewable energy it consumes, as I told you last week.
As you may recall, China is going all in on figuring out how to make green hydrogen work, especially now that the People’s Republic is throwing everything at the wall to diversify its domestic supply of fuels as the Iran War chokes off its regular supply of hydrocarbons. One of the trickier questions with green hydrogen is how to ship the world’s small molecules without leaks. A popular solution is to convert the hydrogen into green ammonia. On Tuesday, SPIC Green Energy announced the successful loading of 3,750 metric tons of green ammonia produced in Jilin Province onto a vessel at the Lianyungang Port in Jiangsu Province and shipped to South Korea. “The shipment represents the world’s largest single-batch delivery of green ammonia,” analyst Jian Wu wrote in his China Hydrogen Bulletin newsletter. “It marks China’s transition from technical demonstration to large-scale international commercial delivery.”
A company promising to put an expiration date on so-called forever chemicals just raised a bunch of money to bring its technology to market. Claros Technologies is developing a proprietary system that can break down the per- and polyfluoroalkyl substances, or PFAS, contaminating millions of Americans’ drinking water systems. This week, the startup closed a $55 million Series B financing round. “Over the past year, Claros has crossed the threshold from breakthrough technology to successful commercial reality,” CEO Michelle Bellanca said in a statement.
Risk-averse but deep-pocked institutional investors join the party.
When the Fusion Industry Association surveyed the sector earlier this month, it found that the industry’s 56 active companies had collectively raised more than $14.2 billion over the past five years. But an ever-larger share of that money is ending up in the hands of one startup: Commonwealth Fusion Systems.
With its latest $1 billion funding round, announced today, the MIT spinout now accounts for nearly 30% of all capital in the industry. The new financing, led by a wave of institutional investors entering the sector for the first time, will support construction of the company’s first commercial power plant in Chesterfield County, Virginia, which CEO Bob Mumgaard says is on track to come online in the early 2030s.
In a media briefing, Mumgaard noted that this latest raise marks “the largest single funding round among fusion energy companies since our last large round of $1.8 billion in 2021.” It brings the total capital raised by CFS to an even $4 billion as the company races to complete construction of SPARC, its demo reactor. If all goes according to plan, it should begin operating sometime next year, proving out the physics and engineering approach underpinning ARC, the planned commercial plant.
The new financing deviates from the typical venture capital round, as it brings in a broad but unnamed mix of “large pension funds, sovereign wealth funds, infrastructure funds doing project finance, and industrial corporates.” These risk-averse investors would typically steer clear of expensive, first-of-a-kind facilities, demonstrating the degree to which CFS has succeeded in building confidence in an industry long critiqued for overpromising and underdelivering.
The company credits the trust it built to its extensive peer-reviewed research as well as its decision to build a tokamak — widely regarded as the most mature fusion reactor design. “I don’t think there’s any other company that’s been as transparent and open with their physics and how it actually works,” Katie Rae, CEO and managing partner at Engine Ventures, told me. Rae has participated in every one of CFS’s funding rounds, and while she says her firm has evaluated virtually every startup in the sector, the company remains its only fusion investment.
But even flush with institutional capital, Mumgaard is clear that the company will need billions more to fully finance ARC and the numerous reactors to follow. It’s unclear where exactly that money will come from, though he’s pushing for government involvement. Alongside the Fusion Industry Association, Mumgaard is advocating for a one-time, roughly $10 billion federal infusion of cash into the broader industry to expand public-private partnerships, build shared research infrastructure, and help finance first-of-a-kind plants in an effort to keep pace with China’s rapidly growing fusion program.
According to reporting from Politico, a Department of Energy official told CFS and other fusion companies that such a level of federal funding is “unrealistic in this environment.” But though insiders argue it’s what the industry needs to scale, Rae says CFS doesn’t depend on it. “I think it is the right kind of investment to make, but we didn’t count on it from an investor perspective,” she told me.
One obvious alternative is the public markets. The IPO window for climate tech has reopened, with geothermal giant Fervo and nuclear fission startup X-energy both completing successful public offerings in recent months. SPACs have also made a comeback, as numerous nuclear companies are opting for this faster, though riskier, path to the public markets. But CFS’s newly appointed CFO, Lorence Kim, said during the briefing that this latest round proves “that the private markets have a lot of capital to deploy toward our mission.” Whether an IPO is in the company’s near future remains an open question, though he cautioned against interpreting his hiring as any indication of “IPO prep in a specific way.”
For what it’s worth though, Kim has taken another high-profile, pre-revenue startup public before: Moderna. As CFO from 2014 to 2020, he helped the company scale its mRNA platform and lead its blockbuster $600 million IPO in late 2018 — the largest ever in the biotech industry at the time. Notably, this all happened before Moderna had an approved product or the Covid pandemic made its signature vaccine a household name, similar to where Commonwealth finds itself today.
“Moderna was in this moment in time where the science worked, and the strategy was focused on execution and scale and deploying capital in a way that could enable real impact on the world,” Kim explained. CFS is now at the same juncture, he said. “And so in the same way that Moderna industrialized mRNA and made it inevitable and made it ubiquitous, it was really clear to me that CFS could do the same for fusion.”
Of course, CFS is not alone in its confidence — other fusion companies are equally bullish on their own approach. Take Inertia Enterprises, a Lawrence Livermore National Laboratory spinout, which last week unveiled its own commercial roadmap for a laser-driven fusion reactor. The company emphasized it’s the only one to have definitively demonstrated the viability of its underlying physics in a real-world experiment, rather than through theoretical work or simulations.
Or take Helion, which has raised $1.5 billion and secured a highly ambitious power purchase agreement with Microsoft to supply electricity to the tech giant by 2028. Or Pacific Fusion, which netted a staggering $900 million Series A to be doled out in milestone-based tranches. There are dozens of others — many with hundreds of millions in funding — pursuing a range of approaches that some of the field’s brightest minds consider technically feasible.
But when I mused to Rae about how exciting it is that institutional investors now appear willing to back an industry once viewed as bordering on science fiction, she was quick to correct me.
“They’re willing to bet on Commonwealth Fusion — that’s what you mean.”
At least one hyperscaler’s big bets seem to be paying off.
This is an edition of Heatmap Daily, an evening review of the day’s news written by our executive editor. Sign up for it here.
Good evening. Let’s start with the news. Meta and Microsoft released their most recent quarterly earnings this evening, and Wall Street was watching to figure out if their enormous AI spending plans are paying off. We were watching because those proposals are shaping one of the most important energy stories today: the data center boom and the sharp return of electricity demand.
The returns were … mixed. Meta missed analysts’ estimates, and its profit fell 14% from the same quarter a year earlier. It increased the lower bound of how much it plans to spend on capital expenditures such as data centers this year, from $125 billion to $130 billion, but left the upper bound of $145 billion unchanged.
Microsoft, meanwhile, said its AI investments are starting to pay off. Revenue at its cloud business, which uses its data center space, increased by 43%, more than analysts expected. It spent $41 billion on capital expenses in the three months ending in June.
Meta’s stock was down 7% in after-hours trading, while Microsoft is up 8%. When Heatmap surveyed climate insiders last year, they ranked Microsoft as among the most decarbonization-friendly hyperscaler and Meta as among the worst.
Permitting odds up — thanks to Shift Key?
I do not regularly follow such things, but this afternoon I was told that the Kalshi market for “Will permitting reform become law this year?” surged to 77% today after trading for days around 50%:
I have no idea why it budged today, but perhaps what moved the market was our new episode of the Shift Key podcast (Apple, Spotify). On today’s show, I spoke with Daniel Palken, a former Capitol Hill policy staffer now at Arnold Ventures, about the current state of permitting reform negotiations in Congress. While we don’t know the exact shape of a deal yet, permitting reform is likely to be the biggest new policy for clean energy that we could get by the end of the year.
Daniel is a fantastic guide to the negotiations, and if you’re curious about the policy at all, I recommend that you listen. Here are few of my takeaways from the conversation:
1. A permitting reform deal will probably have six buckets.
They are (1) changes to the National Environmental Policy Act and the judicial review process that environmental studies face after completion; (2) reforms to the transmission process; (3) changes to the Clean Water Act; (4) a deal to make it harder for presidents to yank permits from approved projects; (5) changes to the National Historic Preservation Act, and (6) “everything else,” a grab bag of smaller fixes including to geothermal energy.
2. Wonky committee politics are shaping the deal.
The National Historic Preservation Act, for instance, is an archeological law that hasn’t been in the mix for previous reform proposals. It’s up for discussion now because Senator Mike Lee of Utah chairs the Senate Energy and Natural Resources Committee — and the NHPA is the major environmental bill under his jurisdiction. Likewise, observers think that a permitting deal has a much better shot of passing during this Congress (as compared to next year) because of an expected series of changes to committee chairs.
3. It’s way, way better to hook data centers to the power grid than run them off behind-the-meter power plants — even if they run off 100% natural gas.
Any permitting reform proposal will seek to expand the transmission system. That could have big benefits for the emissions intensity of data centers. Why? I’ll let Daniel explain:
If you look at the data centers that are hooking up off grid — when they’re not using repurposed jet engines, they’re using 20% thermally efficient gas plants. Whereas if you’re hooked up to the grid, there’s really two types of gas plants that live on the grid. There’s like 60% efficient combined-cycle gas turbines, which are most of the gas power that’s generated, and then there’s peaker [plants], which have low efficiency, but are run at capacity factors of like 5% — so from an emissions perspective, they don’t matter all that much.
So even if solar and wind didn’t exist at all, and nuclear didn’t exist, and hydro didn’t exist, it would still be a much, much cleaner option [to connect data centers to the power grid]. Like we’re talking factors of three in efficiency to connect your data center to the grid if it was purely powered by gas, which is, I think, an important point to understand.
I thought that was an interesting point, and while I’d seen some of those ideas in isolation, I’d never seen them laid out in one place. (And even if grid-scale gas plants are much more efficient than behind-the-meter plants, it’s still even better to power data centers with solar, batteries, and other clean firm power plants — which is also easier when they’re hooked up to the grid.)
I’ll stop glossing the episode and just link to it one more time. Thanks for reading.