Europe’s Heat Wave, Drought Choke Key Trade Arteries as Rhine, Danube Hit Record Lows

Rhine and Danube Water Levels Fall to Record Lows

Nuclear Plants Face Shutdowns as Cooling Water Runs Short

Cargo Loads Cut, Freight Rates Triple

A severe drought across Europe is affecting more than crop production. Falling river levels are disrupting power generation and freight transport, hampering nuclear plant operations and cargo shipping on inland waterways. At factories in Europe’s interior, higher transport costs are even pushing up raw-material prices in what has become known as a “depth premium.”

Reuters reported that Hungarian Prime Minister Peter Magyar said on Aug. 2 that the Paks nuclear power plant would halt operations the next day for the first time in 44 years. “The next five days will be critical,” he said. Magyar added that output at Paks had fallen to 240 megawatt-hours on the morning of Aug. 2 from 2,000 megawatt-hours previously, and urged consumers to cut electricity use between 5 p.m. and 10 p.m. The plant, which accounts for about 40% of Hungary’s electricity generation, uses Danube River water for cooling. As the river fell to a record low, its four reactors have been shutting down one by one since July 29.

Hydropower plants on the Danube are also at risk of stopping. Serbian Energy Minister Dubravka Handanovic told local media that output at the Djerdap 1 and 2 hydropower plants had fallen to 20% and 30% of installed capacity, respectively. The two plants account for about 18% of Serbia’s electricity production.

The Danube, which rises in Germany and flows to the Black Sea, has been setting new record lows amid the drought. Water levels measured at a Budapest monitoring station on July 29 were 23 centimeters, 10 centimeters below the previous record of 33 centimeters.

In Western Europe, the drought is hitting logistics networks. Navigable depth at Kaub in Germany, a key Rhine chokepoint, fell to 25 centimeters on July 31, near the record low set in 2018. With water levels dropping, cargo vessels are operating at only about 20% of normal capacity. Some ships can now carry as little as 250 tons while passing through Kaub. Cargo volumes moving between Rotterdam, Europe’s largest port, and the Rhine are running about 10% below normal.

Lower cargo loads are driving up freight rates. The cost of shipping cargo by tanker barge from Rotterdam in the Netherlands to Karlsruhe in Germany jumped to 150 euros to 155 euros a ton on July 31 from 45 euros in late June. The Kiel Institute for the World Economy said the Rhine drought could shave 0.1 to 0.2 percentage point off Germany’s third-quarter GDP growth. The Rhine serves as a trade artery carrying raw materials to industrial cities across its basin, from Cologne in the northwest to Stuttgart in the southwest.

Kim Ju-wan, Hankyung.com reporter kjwan@hankyung.com