Record low water levels in Europe’s major rivers have curtailed the transport of goods, reduced electricity output and shrunk company earnings, stoking fears about the economic impact of searing heat and erratic rainfall.
“It’s affecting not one region like we’ve seen in the past, but the whole European landscape,” said Alessandro Armenia, a power analyst at commodities data and analytics firm Kpler.
Production of nuclear power in Hungary and hydropower in Serbia have fallen because of record low water levels along the Danube, which passes through major cities like Vienna, Budapest and Belgrade on its route from Germany to the Black Sea.
The Paks nuclear power plant, which generates nearly half of Hungary’s electricity, will be shut down on Monday, possibly for weeks because water levels on the river, which supplies cooling water to the facility, are expected to stay too low for it to operate safely.
At Djerdap 1, Serbia’s largest hydropower plant, output has fallen to 20 per cent of capacity, the plant’s production director Davor Maljokovic told Reuters, as the once broad shipping channel beside it has shrunk to expose sandbanks and gravel bars.
The lack of water has also disrupted cooling systems at Serbia’s Kostolac coal-fired power plants, forcing them to cut output, Serbia’s state EPS power utility said.
Both Serbia and Hungary say they will make up for the losses by importing electricity, a costly measure when demand on the spot market is high.
Energy is not the only loser. Cezar Gheorghe of Romanian grain market consultancy AGRIColumn told Reuters on Friday that farmers along the Danube were having problems shipping their crops because low water levels stopped barges from using several river ports.
“Only the ports which are closer to the Black Sea are still operational. Barges can’t go through the others,” Gheorghe said.
“Crop buyers could offer farmers lower prices and load them in trucks, although there might also be a shortage of trucks.”
Meanwhile, the volume of cargo transported to and from Rotterdam — Europe’s largest sea port — to the Rhine has fallen slightly each week since the beginning of July and is around 10 per cent lower than normal, a port spokesperson told Reuters.
Chemical and oil product tankers and dry bulk carriers are particularly affected because of their greater draught compared to container barges, which means they sit deeper in the water and require greater water depths.
Furthermore, companies’ balance sheets have suffered from the changing climate. Austrian utility Verbund, which produced about 85 per cent of its electricity from hydropower last year, said on Thursday that drought conditions reduced earnings by about 370 million euros in the first half compared with a year of normal hydrological conditions.
In Italy, the Po River basin has entered a state of high water scarcity, threatening rice crops and drinking water supplies across the north.
Chief Executive of regional utility A2A, Renato Mazzoncini, said he expected hydropower production this year of 3.9 TWh compared to a historical average of 4.1.
“Some of our reservoirs are under pressure,” he said. “We practically need to start doing a rain dance.”
