Solving Water Risk in the Age of AI and Climate Change
by Alexei Levene, Co-founder & Chief Growth Officer, Desolenator
Climate change and industrial growth are on a collision course with a finite resource: water. While decarbonization rightly dominates climate dialogues, the escalating crisis of water scarcity poses an equally profound threat to global stability, economic progress, and climate resilience itself. With less than 1% of Earth’s water being accessible freshwater, and demand projected to exceed supply by 40% by 2030, the strain is already showing. Water risk is no longer a distant environmental concern; it’s an immediate business reality, jeopardizing an estimated $225 billion in strategic corporate assets and driving instability across supply chains.
For decades, particularly in arid coastal regions, conventional desalination – primarily Reverse Osmosis (RO) – has been touted as the solution. Yet, this approach carries a heavy paradox. RO plants are notoriously energy-intensive, often relying heavily on fossil fuels and contributing significantly to the very climate emissions, exacerbating water scarcity (projected 218 Mt CO2e annually by 2040). Furthermore, they produce vast quantities of toxic brine (142 million m³ daily), harming marine ecosystems, and their centralized, large-scale nature necessitates massive capital investment and vulnerability. Integrating them effectively with intermittent renewables like solar PV is also challenging due to membrane sensitivity and efficiency drops. This model is increasingly unsustainable.
We stand at a critical juncture demanding a paradigm shift in water management, akin to the energy sector’s move from centralized fossil fuel plants to distributed renewables. The future requires water solutions that are:
Sustainably Powered: Intrinsically designed to run on renewable energy (like solar thermal) or, crucially, integrated with industrial processes to harness vast amounts of low-grade waste heat (30-90°C) – turning a costly emission into a valuable energy source.
Decentralized and Modular: Shifting away from mega-projects towards scalable, containerized systems deployed closer to the point of need, reducing infrastructure costs and increasing local resilience.
Circular and Clean: Eliminating toxic brine discharge through Zero Liquid Discharge (ZLD) approaches that recover resources like salts and minerals, leaving only freshwater.
Resilient and Reliable: Incorporating thermal energy storage and robust designs (like thermal desalination methods such as Multi-Effect Distillation - MED) capable of handling fluctuating energy inputs and variable water quality without the chemical pre-treatment burden and consumable replacements (like membranes) common in RO.
Nowhere is this water-energy collision more apparent than in the data center industry. Fueling the AI and cloud revolution, data centers face exponential growth in energy demand (projected 2.5x by 2030). Their thirst is equally staggering. Globally, they consume hundreds of billions of liters of water annually, predominantly for cooling. Critically, over 60% of this is often precious potable water, and 55% of data centers sit in regions facing medium-to-extremely high water stress, creating direct conflict with community and agricultural needs and significant operational risk. Headlines from Chile to the Middle East reflect this mounting tension.
This presents a prime opportunity for the new water paradigm. Innovative "Heat-to-Hydration" approaches leverage the substantial waste heat generated by servers. Instead of venting this thermal energy, integrated systems can use it to power on-site water desalination or purification. Emerging technologies are beginning to harness waste heat and solar energy for water treatment. One example: Desolenator integrates Photovoltaic-Thermal (PV-T) panels with thermal desalination systems to enable closed-loop cooling in data centers while generating clean water on-site.
While data centers offer a stark example, the need extends across the industrial landscape. Semiconductor manufacturing requires vast amounts of ultra-pure water in increasingly drought-prone locations. For example, major chip manufacturers in Taiwan were mandated to reduce water consumption by up to 17% during the drought from October 2020 to June 2021. The mining industry, facing declining ore grades, needs more water for processing, often turning to costly and energy-intensive desalination in remote, high-altitude locations like Chile. Pharmaceuticals, Food & Beverage, Green Hydrogen, and Controlled Environment Agriculture all face critical water quantity, quality, and sustainability challenges that traditional methods struggle to meet affordably and cleanly. See here for a global assessment of the water challenges faced by various industries.
The convergence of corporate water stewardship commitments (like the CEO Water Mandate, now endorsed by 350+ companies), emerging policy drivers (like mandatory water disclosures), and focused innovation prizes (like the 119m Water Scarcity XPRIZE) signals a tipping point. The market for industrial water services is already substantial (5.1tn estimated economic value) and set to grow significantly (7% CAGR).
Addressing the intertwined water-energy-climate crisis requires moving beyond incremental improvements. We need investment and policy support for this new generation of water infrastructure: decentralized, renewably powered, circular, and resilient systems. For entrepreneurs and innovators, the challenge is to develop and scale these integrated solutions. For investors, it’s recognizing that water resilience is not just an environmental imperative but a burgeoning climate adaptation market essential for securing our industrial future. The urgency is clear, but so is the opportunity. The confluence of policy pressure, corporate demand, and emerging technologies makes this a pivotal moment for industrial water innovation.
The technologies enabling industries to secure high-quality water from diverse sources, powered by renewables or waste heat, represent a cornerstone of climate adaptation. These solutions offer tangible benefits: reduced operational costs, lower carbon footprints, enhanced supply chain security, and strengthened social license to operate.
For the MCJ community, the path forward is clear:
For Investors: Water is no longer just an ESG checkbox; it’s infrastructure. Back modular, resilient technologies that decouple water security from fossil fuels.
For Entrepreneurs & Engineers: The opportunity lies at the intersection of water, energy, and industry. Design for circularity, waste heat reuse, and digital intelligence.
For Policymakers: Create incentives for sustainable water infrastructure—support R&D, streamline permitting, and embed water into climate and industrial policy.
The old model of water management is failing under the dual pressures of industrial demand and climate change. Building a resilient and sustainable future requires us to tackle the water crisis head-on, not with the energy-intensive, polluting methods of the past, but with the innovative, integrated, and renewably powered solutions of tomorrow. The urgency and depth of our global water crisis require our business and political leaders to take a systems design view. By looking at the system in a transformative way, we can collectively transform waste into a resource, and the water crisis into true abundance.
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Another dishonest article that pretends nuclear energy doesn't exist. We don't have to choose between having healthy people, prosperous economy, 100% recycling, and pollution.
We can make all the energy we want with no pollution.
And if we get a modern industry going with manufactured dry hot nuclear modules, it will be so much cheaper and safer, fossil fuels won't know what hit them.
Our grandfather's nuclear plants were designed to be the same price as coal plants because the utilities didn't want to see stranded assets on their books. But if you do nuclear right, like President JFK's team at oak ridge, or a hundred other good ideas, you can make nuclear so much cheaper than fossil fuels that nobody will buy fossil fuels anymore.
Which is good for everybody except the landlords of fossil fuels. The oil cartels have owned American politics since 1922. They call themselves the free market, ironically, since the definition of a cartel is the opposite of a free market.
But it doesn't help when fake environmentalists pretend that nuclear doesn't exist and that we have to make nasty choices.
It's racist to say that America can't have cheap safe nuclear power. South Koreans and Chinese people don't have any trouble doing it, and I believe that white people are just as smart.