Europe is experiencing an unprecedented energy crisis this summer, driven by extreme heatwaves and drought. Low water levels in key rivers like the Danube, Rhine, Rhone, and Garonne are severely impacting the continent's power generation capacity. Nuclear power plants, which rely on river water for cooling, are being forced to reduce output or shut down completely. France, for instance, has experienced a record number of heat-related outages in its nuclear fleet, resulting in over 3.7 terawatt-hours of lost nuclear power. Similarly, Hungary's sole nuclear plant, Paks, has fully shut down for the first time in 44 years, cutting off nearly 40% of the country's electricity supply. Romania has also shut down one reactor at its Cernavodă plant and is considering shutting a second, which would lead to a 20% loss in national electricity generation.
The drought also significantly affects hydropower, a crucial source of low-carbon power. Norway, Europe’s largest hydropower producer, reports that its reservoirs are filling at the lowest rate in two decades due to below-average snowfall, warm spring and summer temperatures, and persistently dry weather. This widespread disruption in both nuclear and hydropower generation is forcing European countries to lean more heavily on imported fossil fuels and variable renewable energy, contributing to soaring electricity prices. Matthew Jones, head of power analytics at ICIS, noted that France's energy issues are driving up prices in neighboring markets, with fears that conditions will worsen given forecasts for more scorching days.
Beyond power generation, the critically low river levels are disrupting vital transport routes. The Rhine and Danube rivers are essential for moving chemicals, oil products, and other goods. The reduced navigability of these rivers is boosting freight costs, with the cost of shipping diesel reaching its highest since 2009. This situation highlights a growing challenge for Europe's interconnected power grid, which is designed to cushion local shocks but becomes vulnerable when multiple countries face widespread shortages simultaneously. The European Commission had already presented a European Water Resilience Strategy in June 2025 to address such issues, recognizing that droughts already cost the EU an estimated €50 billion in 2022 alone.
