The energy crisis stands out as one of the most intricate challenges facing the Gaza Strip, profoundly affecting the daily lives of its residents. Electricity has been weaponized as a means to tighten the blockade, inflict punishment, and escalate pressure on the Gaza population, both during times of peace and war. Basically, the Gaza electricity crisis stems from a combination of factors, including the limited availability of electricity sources, their inability to meet the Strip’s growing needs, the urgent requirement for alternative sources, and the ever-increasing consumption driven by rising electricity demand.
Introduction
The electricity supply in the Gaza Strip is in critical deficit, with the total energy available amounting to no more than 220 megawatts, sourced primarily from the Strip’s sole power plant and Israeli power lines, as per the Electricity Distribution Company in Gaza. The ongoing damage to infrastructure during repeated conflicts has further degraded the power grid, exacerbating the crisis. Compounding this issue is the population growth, which has surged from 1.2 million in 2006 to approximately 2.2 million in 2023. As a result, the Strip is experiencing a severe collapse in living standards and economic stability, with industries struggling under the burden of soaring gas and fuel prices, as more than two million Palestinians are forced to import these resources at unaffordable costs.
The problem lies in the limited and insufficient electricity supply available to the Gaza Strip, whether sourced from its sole power plant or purchased from the Israeli occupation.
The Energy Sector Crisis in Palestine
Covering an area of approximately 365 square kilometers, the Gaza Strip has faced a suffocating electricity crisis since the sole power plant was targeted by Israeli forces in June 2006. Under optimal distribution scenarios, residents receive no more than 8 hours of electricity daily. The crisis, however, traces back to the plant’s inception in 1999, with its limited production capacity capped at 120 megawatts.
Thus, the Gaza Strip suffers from an acute shortage of energy resources, resulting in daily power outages lasting over 13 hours due to the availability of less than 45% of the electricity required to meet Gaza residents’ needs. Meanwhile, the majority of the West Bank relies on electricity purchased from the Israel Electric Corporation (IEC), exposing Palestinians to potential exploitation. On average, Palestine consumes about 1.8 thousand megawatts annually, with roughly 600 megawatts allocated to the Gaza Strip. Despite this, the Strip faces a severe electricity shortfall, with total energy availability capped at 220 megawatts, derived from two main sources.
- Gaza’s sole power plant
- Israeli power lines
Palestine depends on Israel for approximately 95% of its electricity supply, with the remaining 5% sourced from Jordan and solar energy sources.
Data from the Energy Authority in Gaza indicates that the Strip’s average electricity demand during regular months is 450 megawatts, surging to approximately 630 megawatts during peak periods. In contrast, the power plant produces only about 70 megawatts on average and the Israeli occupation supplies approximately 117 megawatts via 10 feeders at a voltage of 22 kilovolts, and alternative energy sources generate an additional 15 to 20 megawatts.
To address these challenges, the Palestinian Authority (PA), in collaboration with the Palestine Investment Fund (PIF), is working to establish the Jenin Power Plant Project, north West Bank, to provide around 450 megawatts of electricity, as depicted in figure 1.
Figure 1: Electricity Sources in the Gaza Strip
Source: The researcher
Currently, the IEC has ceased supplying electricity to Gaza in response to Operation Al-Aqsa Flood. This reduction left the Strip with only about 80 megawatts, increasing the electricity deficit to approximately 80% before power was completely cut off. Consequently, residents of the Gaza Strip initially had access to electricity for just about 4 hours a day. However, the situation worsened as the power plant completely shut down due to the suspension of fuel supplies by Israel, significantly affecting vital humanitarian services such as hospitals and water stations.
Causes of the Problem
The core problem lies in the insufficient and inconsistent electricity supply to the Gaza Strip, whether from Gaza’s sole power plant or direct supplies from the Israeli side. Moreover, several factors and stakeholders have played a role in perpetuating and worsening the crisis over the years. These factors can be summarized as follows:
Economic Reasons
- The inability to cover all operating expenses of Gaza’s power plant, especially in the wake of rising global fuel prices triggered by the Russian-Ukrainian crisis, as well as the ongoing war on Gaza.
- The failure of government agencies in Gaza to fully collect payments for electricity consumption, compounded by the absence of clear mechanisms in place to streamline the process.
- The lack of consistent and sustainable funding to enhance the power plant’s production capacity, performance, and overall development
Internal Disputes
Political fragmentation has caused a duality in managing the power plant and the entire electricity sector in Gaza, given the complex overlap between multiple departments tasked with supplying diesel to the Strip. Compounding this are technical issues involving the review of subscriber payment records, the tracking of collected funds, and the processes for settlement and payment. This extends to the technical requirements for maintenance and the procurement of essential equipment to advance the network.
Israeli Occupation
A significant driver of the crisis is the Israeli occupation, which has directly attacked the power plant, blocked the entry of critical equipment, and used fuel access as a political bargaining tool. Since 2007, the occupation forces have imposed a harsh siege on Gaza, tightly controlling border crossings and preventing the entry of essential goods, such as food, medical resources, fuel, and electricity. These actions violate international and humanitarian law, which obliges the occupying power to ensure the unhindered supply of food and medicine.
This has led to substantial financial losses, as Palestinians in the Gaza Strip have been forced to rely on alternative energy sources such as candles, generators, and basic chargers, incurring costs estimated at approximately $2.5 billion.
The escalating electricity crisis in the Gaza Strip has severely impacted around 2,000 industrial facilities, reducing their workforce and market share by approximately 60%. It has also caused a 50% decline in their fixed assets and profit margins, while production costs in some strategic industrial sectors have surged by up to 200%. Additionally, the Israeli occupation continues to hinder strategic electricity projects, including delaying efforts to connect the power plant to natural gas.
Technical Challenges
- The fragile state of the power plant’s infrastructure and networks, coupled with substantial losses resulting from the degradation of the network infrastructure.
- The lack of donor involvement in implementing strategic projects, focusing instead on emergency measures like providing diesel grants to keep the power plant running.
- The failure of the policies adopted to manage the electricity crisis to provide solutions, alleviate its severity, or prevent it from worsening.
For years, discussions in the Gaza Strip have revolved around projects aimed at alleviating the crisis or strategic initiatives aimed at addressing the problem at its core. Yet, none have materialized into tangible action. Any effective plan, however, must prioritize minimizing reliance on Israeli resources to the greatest extent possible, ultimately striving for full independence.
The discovery of natural gas in commercial quantities off the shores of the Gaza Strip was initially seen as a transformative opportunity for the Palestinian economy. It promised a source of affordable energy and potential revenues from exports. However, the key challenge for Palestinians in fully capitalizing on this resource goes beyond the restrictive policies and practices of the Israeli occupation. It lies in the PA’s ability to assert its sovereignty and engage in a political, diplomatic, and legal struggle to secure the Palestinian state’s rights over all its resources, including those in territorial waters. Israel is fully aware that Palestinian control over natural resources would generate significant revenues, reducing dependence on energy imports and foreign aid, thus enabling economic and political independence—an outcome Tel Aviv strongly opposes and actively works to prevent by obstructing Palestinian economic development.
Plans and Projects Requiring Stepwise Progress
The Gaza Marine gas field, one of the oldest discovered in the Mediterranean region—a region abundant in this fossil gas—represents a significant opportunity for Palestine, which faces a severe energy shortage under the constraints of Israeli occupation. Despite its discovery over 20 years ago, the Gaza Marine field remains untapped, with its resources locked underground. This stagnation stems from the persistent interference of the Israeli occupation and the political instability surrounding the Palestinian cause, which continue to hinder its development.
In June 2023, Palestine formally called for full autonomy over its natural energy resources, beginning with the development of the Gaza Marine gas field located off the Mediterranean coast. Figure 2 illustrates the location of the Gaza Marine field.
Figure 2: Current and Potential Maritime Zones
Source: The researcher
Gaza Marine and Israeli Control
The Gaza Strip is facing a severe collapse in living and economic conditions, with soaring gas and fuel prices crippling its industries. Over two million Palestinians in the Strip are forced to import gas at exorbitant costs. Meanwhile, for decades, Israel has obstructed any attempts to extract gas from two fields in the Gaza Sea, discovered back in 1999.
The Palestinian Gaza Marine field, one of the oldest gas fields discovered in the Mediterranean region, represents a beacon of hope for Palestine as it grapples with severe energy resource shortages while enduring the challenges of Israeli occupation. In late 1999, located approximately 30 km off the Gaza Strip’s coast, Palestine uncovered over 1.1 trillion cubic feet of proven natural gas reserves in its territorial waters. To capitalize on this discovery, the PA awarded exploration and drilling rights to a coalition of foreign entities, including BG Group (a British Gas subsidiary at the time, later acquired by Shell International), the PIF, and the Consolidated Contractors Company (CCC) under a 25-year exploration and exploitation agreement.
In early 2000, exploration at a depth of around 600 meters beneath the sea surface revealed substantial quantities of natural gas distributed between two fields, namely the Gaza Marine field and the Border Field. Initial projections estimate the Gaza Marine field contains more than one trillion cubic feet of natural gas, with combined production from both fields potentially reaching up to 1.5 billion cubic meters annually, as shown in figure 3.
Figure 3: Gaza Marine, Palestine’s Mediterranean Treasure
Source: The researcher
Gaza Marine: Between Operational Challenges and Israeli Standoff
More than two decades have passed since the discovery of the Gaza Marine gas field, yet Palestine has been unable to extract and utilize its vast resources. Several factors have contributed to this delay, including:
- Technical difficulties and the substantial expenses required
- Israeli policies and interventions, reflecting the occupation’s efforts to ensure Palestine remains dependent on Tel Aviv for energy and deprived of energy independence.
- The inability to attract investments due to the lack of Israeli guarantees against obstructing the field’s development efforts.
- The withdrawal of Shell International from operations in the region.
- Lack of a political horizon.
Moreover, the underdeveloped infrastructure poses a major financial challenge to harnessing the Gaza Marine field, requiring considerable investments to turn the gas project into reality. Meanwhile, Israeli actions and policies have consistently blocked Palestine from accessing and utilizing the region’s gas resources, reflecting efforts to enforce energy dependence and stifle Palestinian energy autonomy.
Upon the discovery of the Gaza Marine field, negotiations commenced between the PA and the BG Group on one side, and the Israeli government on the other, with the aim of establishing coordination within the framework of the Oslo Accords, which was signed in 1993 between the Palestine Liberation Organization and Israel during the presidency of Bill Clinton and grants Palestinians the right to extract resources from their lands, while concurrently affording the Israeli occupation the authority to restrict navigation for security-related concerns.
A key aspect of these negotiations involved securing buyers for the Palestinian gas to be extracted from the Gaza Marine field. This situation presented a unique scenario, as Israel, then an energy importer with no discoveries within the occupied territories, became the initial and preferred recipient of the discovered gas, a preference explicitly articulated by the IEC.
Despite negotiations, the Israeli occupation continued to impede the development of the Gaza Marine field under the pretext of security. This obstruction culminated in the refusal of then-Prime Minister Ariel Sharon to acquire gas from the field following the escalation of the Second Intifada in 2000. Subsequent US-mediated efforts to facilitate the transaction ultimately failed, with Israel citing the prevention of terrorism financing as the primary reason.
In 2006, with the assumption of office by the Ehud Olmert-led Israeli government, negotiations with the British BG Group were resumed. However, Tel Aviv imposed a condition requiring the gas pipeline route through Israeli territory, effectively granting Israel control over gas supplies to the Gaza Strip. This condition was met with rejection from the BG Group. Since then, serious negotiations between Palestine and Israel regarding the Gaza Marine field stalled. The situation further deteriorated with Hamas’s 2007 takeover of the Gaza Strip. Moreover, Israel’s significant 2009 and 2010 discoveries of the Tamar and Leviathan gas fields, containing substantial reserves, further emboldened its intransigence in these negotiations, particularly as Israel transitioned from an energy importer to an exporter.
A significant development occurred in 2015 when Shell International acquired BG Group, the exploration arm of British Gas, in a transaction of unprecedented scale within the oil and gas industry. This acquisition transferred a 55% stake in the Gaza Marine gas field development rights to Shell. However, the complexities and challenges associated with developing the field and extracting its resources led Shell to ultimately withdraw from the project. This culminated in an April 2018 agreement between the PIF and Shell International formalizing their exit from the Gaza Marine field development.
Following Shell’s withdrawal, the PA established a new alliance, resulting in the following revised shareholding composition:
- The PIF and the CCC, each holding a 27.5% equity stake.
- A 45% stake to another development company.
Subsequently, the development of the Gaza Marine field remained uncertain, with discussions on the matter resuming only after the establishment of the East Mediterranean Gas Forum at the end of 2019 and Palestine’s later membership.
Israel’s Strategy toward Palestinian Gas Resources
Based on the preceding, the Israeli strategy concerning Palestinian natural gas rests upon three fundamental tenets.
- Striving to marginalize the Palestinian side, represented by the PIF, which oversees the management of the PA’s investments, from the negotiation process.
- The Palestinians receiving their share of the Marine Gas proceeds in the form of goods and services, effectively precluding the PA from directly benefiting from the anticipated financial windfall.
- Imposing a system of reliance.
The underlying motivations for Israel’s hesitation or impediment to Palestinian development of the Gaza Strip gas reserves can be identified through an examination of the following points:
- Initially, Israel obstructed the development of the natural gas fields, motivated by a desire to negotiate advantageous commercial arrangements for the extracted gas. Concurrently, Israel aimed to safeguard its future natural gas supply, anticipating potential disruptions to its established import channels. However, upon the discovery of domestic reserves, Israel shifted its focus towards security apprehensions exacerbated by Hamas’s governance of the Gaza Strip.
- Israel’s current focus is heavily concentrated on the Eastern Mediterranean gas fields, driving a concerted effort to expedite agreements and establish rapid gas transportation routes to Europe. This pursuit, however, is tempered by a prudent consideration of the potential for exacerbating tensions with Moscow, given the concern that increased Israeli gas exports may be perceived as a challenge to Russia’s energy dominance in the face of the sanctions imposed by the United States and European countries in response to the conflict with Ukraine.
- Israel pursues a strategy of maintaining Palestinian energy dependence, aiming to perpetuate its influence over the Palestinian economy. Palestinian energy independence is perceived as a significant catalyst for the realization of Palestinian aspirations. Moreover, Israel views complete Palestinian energy reliance as a crucial factor in achieving economic stability and mitigating the potential for instability.
The Palestinian Gas Dilemma
Natural gas is experiencing a surge in global energy markets, with the International Energy Agency projecting sustained growth in global demand over the coming decade. The Gaza Marine field, boasting reserves exceeding one trillion cubic feet, offers significant potential, with anticipated annual production volumes reaching approximately 1.6 billion cubic meters (roughly 57 billion cubic feet). Additionally, the Gaza Marine gas possesses exceptional purity, facilitating ease of sale, and its proximity to shore enables efficient extraction, rendering the extraction process commercially viable.
This field holds particular significance for the Palestinians, given the following considerations:
1. Addressing the Energy Crisis
The Gaza Strip faces a critical shortage of energy resources, leading to daily power outages lasting over 13 hours, as less than 45% of the population’s electricity demands are met. Meanwhile, in the West Bank, the majority of electricity is supplied by purchases from the IEC. This dependency exposes Palestinian citizens to potential exploitation by the IEC, as:
- Palestine’s annual electricity consumption averages around 1.8 thousand megawatts, with approximately 600 megawatts allocated to the Gaza Strip.
- Palestine relies on Israel for over 95% of its electrical energy, with the remainder coming from Jordan and solar energy sources.
- The PA, in collaboration with the PIF, is working to establish the Jenin Power Plant Project, located in the northern West Bank, with the goal of generating 450 megawatts of electricity.
If the Gaza Marine gas field is utilized, it could effectively end the energy crisis in the Strip while satisfying the energy needs of both the West Bank and the Gaza Strip.
2. Gains for the General Budget
The annual report of the PIF highlights significant benefits stemming from the successful liquefaction of the Gaza gas project. These include annual savings of over $560 million on the PA’s energy bill and direct revenues amounting to approximately $2 billion over the project’s 20+ year lifespan. Additionally, the project is expected to create substantial investment opportunities in the energy sector, particularly for independent power generation companies. These outcomes are particularly crucial as they play a key role in bolstering efforts toward economic disengagement from the Israeli occupation.
Palestinian Opportunities to Exploit Gaza Marine Gas
Israel’s obstruction of Palestinian efforts to utilize the natural resources within their territory constitutes a blatant violation of rights guaranteed by various international agreements, such as the Hague Conventions and International Covenant on Economic, Social and Cultural Rights, which are binding on both Palestine and Israel. Within this framework, and based on the aforementioned indicators, several opportunities exist to strengthen the Palestinians’ capacity to develop and extract natural gas from the Gaza Strip’s waters. These include:
- The Need to Leverage Palestine’s Membership in the East Mediterranean Gas Forum
Palestine’s participation in the East Mediterranean Gas Forum (EMGF) presents a crucial opportunity, not only for advancing gas and resource development but also for fostering broader cooperation. The EMGF serves as a platform for flexible and effective alliances, built on shared interests and mutual benefits. It enhances communication and dialogue among member states, facilitates cooperation in addressing security challenges, mitigates the impact of political differences, and promotes increased connectivity and understanding among nations and their people.
- Negotiating Gas Extraction with an EMGF Member as a Foreign Entity
Under this option, a member state of the EMGF would be approached as if it were a foreign company, following the same principles applied to other contracted entities like BG. The goal would be to secure a commercial agreement in which the EMGF member undertakes the extraction of gas from the Gaza Marine field, with profit shares determined through mutual consensus, while maintaining Palestinian ownership of the field. Nevertheless, this pathway faces significant hurdles due to Israel’s firm stance and efforts to impose limitations on the utilization of Palestinian gas resources.
- Developing Solar Power Plants to Support Key Facilities
The Energy Authority in Gaza attributes the limited expansion of large-scale solar energy projects to the constraints of the current electricity grid and the challenges of extending its connectivity. As a result, solar energy use remains restricted to smaller systems supporting homes, schools, government clinics, and facilities managed by the United Nations Relief and Works Agency for Palestine Refugees.
While solar power can generate up to 20 megawatts under optimal conditions, the grid’s inefficiency hinders the full utilization of this potential. Currently, two solar projects contribute around 7 megawatts to the Strip. Nevertheless, the lack of an effective system for managing battery waste presents further obstacles to the expansion of solar energy solutions.
In summary, energy is a crucial foundation for economic and other essential human activities, serving as a strategic factor in securing the economic, political, and social stability of the Palestinian state. Any shortages, inefficiencies, or unequal distribution of energy can directly influence political, economic, and social dynamics. As such, achieving energy security has become a cornerstone of protecting national security, especially as the state faces two pressing challenges: a growing demand for energy and a significant population increase. Finally, it is crucial to formulate a cohesive national strategy uniting diverse stakeholders, including official, national, and factional entities. This body would actively engage with intermediaries and relevant actors to support the Palestinian side in addressing the energy crisis with immediate, actionable solutions.
