Severe drought in Europe disrupts energy production and river freight
Record-low water levels on the Rhine and Danube are limiting navigation, curbing electricity generation at nuclear and hydropower plants, and could shave up to 0.2% from Germany's GDP in the third quarter.
Europe is experiencing an unprecedented drought that is affecting both energy supply and freight transport. In Romania, low Danube levels forced the shutdown of the Cernavoda nuclear plant and prompted the navy to conduct controlled explosions to clear riverbeds and improve water flow. Similar water shortages have threatened Hungary's Paks nuclear facility and led Serbia to reduce hydropower output.
On the Rhine, water at the Kaub gauge fell to 24 centimeters, the lowest reading since records began in 1880, well below the 78-centimeter level required for fully loaded barges. While navigation remains possible, vessels must travel lighter loads, raising freight costs and low-water surcharges. Liz Saccoccia, water security lead at the World Resources Institute, said the situation illustrates how reduced river flows can ripple through trade, energy security and local businesses.
Economist Stefan Kooths of the Kiel Institute estimated that the reduced transport capacity could lower German GDP by 0.2% in the third quarter, translating to a loss of 1-2 billion euros in added value. Companies are responding by increasing inventories and shifting cargo to rail or road, though freight rates have risen sharply. Felix Schmidt, senior economist at Berenberg, noted that the drought reflects a broader climate-driven challenge for Germany’s economy, which has already seen modest growth in recent quarters.