This Dry Spell Is Only Going To Make Europe’s Energy Crisis Worse

This Dry Spell Is Only Going To Make Europe’s Energy Crisis Worse
Reda Farran, CFA

over 1 year ago2 mins

The roughly 800-mile Rhine runs from Switzerland to the North Sea, and it’s used to transport tens of millions tons of commodities through inland Europe. On average, the river typically flows at a level of more than two meters in July. But as you can see from the red line above, the water level today is below 0.8 meters – its lowest point for this time of the year since at least 2007 – due to droughts. Making matters worse, an ongoing heatwave in Europe is expected to drag water levels even lower.

Shallow water levels mean many vessels carrying essential commodities are either forced to carry smaller loads or can’t pass, period. The situation is already contributing to supply problems of oil products (like diesel and heating oil) in Switzerland, and it’s preventing at least two power plants in Germany from getting all the coal they need. That’s one reason why only 65% of Germany’s power capacity from coal-fired plants is expected to be available in the coming months, according to S&P Global Commodity Insights.

It’s not just the Rhine: many key rivers in Europe are also contending with shallow water levels, and that’s impacting other forms of energy generation too. French nuclear plants rely on rivers for cooling, for example, while many countries use rivers to generate electricity using hydroelectric power plants. Seasonally, Spanish hydro generation is running at the second-lowest level in 20 years, while hydro generation is the weakest in a decade in France.

The timing is particularly painful because of the energy crisis in Europe, with natural gas shortages pushing the region to scramble for alternative energy sources. And if hydropower, coal, and nuclear production all end up getting disrupted, all Europe has left is wind and solar, both also subject to the whims of the weather…

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