Danube drought slashes 0.9 GW nuclear output in Balkans
Heat-driven cooling curbs at Paks and Cernavoda tighten Balkan supply, pushing regional power prices higher.
Extreme weather will be the main driver of southeast European power prices through the third quarter, market observers told Montel, with renewed heatwaves likely to trigger fresh spikes even as nuclear availability improves elsewhere on the continent.3 The forecast lands against a backdrop of already-constrained Balkan supply — and power markets that have not yet fully priced the risk.
Hungarian day-ahead power prices climbed to a six-month high on Sunday (2026-06-28) after heat-driven output cuts at the 2 GW Paks nuclear plant tightened supply, Montel reported.2 Soaring river temperatures reduced cooling capacity, forcing reactor operators to limit generation at a time when summer demand was already pressing hard on the grid.
Nuclear generation has been the region's most reliable baseload source against summer price spikes. When heat forces it offline, gas-fired and coal-fired plant must fill the gap, lifting marginal prices across neighbouring markets.3
The supply strains extend beyond Hungary. Romania has been without 1.3 GW of stable generation from its Cernavoda nuclear plant since earlier in the summer, with the outage pushing the electricity system "to its limits" and causing significant morning and evening price spikes, analysts told Montel.1 The Cernavoda outage was originally scheduled to end on 1 June, according to Entso-E data, but market participants said the heatwave that followed delayed a return to normal operations.1
France illustrated the same dynamic on a much larger scale. On Monday (2026-07-13), France's nuclear generation was cut by 6.4 GW — about 14% of the country's total power demand for the day — as the heatwave hiked river temperatures and limited cooling capacity at nuclear sites.4 Despite those curbs, data from grid operator RTE showed France remained a net exporter, with over 10 GW of power flowing to neighbouring countries on that same day.4
France's nuclear fleet accounts for roughly 70% of its electricity mix, and when its reactors run at full capacity the country is a structural net exporter across the continent.4 Any reduction in that export buffer feeds directly into day-ahead prices from Hungary to Iberia.
The heat is compounding pressure beyond power markets. The water level at the Kaub chokepoint on the Rhine hit its lowest level in decades for mid-July (2026-07-13), hiking the freight cost to ship diesel from Rotterdam to southern Germany by more than 50% in the week to mid-July.5 Diesel for back-up generators and gas-fired plant increasingly moves by barge; when barges must lighten loads, costs rise and volumes shrink.
The economic damage is already measurable. The end-June heatwave cost the German economy more than €6 billion ($6.8 billion), according to an analysis by economic research firm Prognos for German business daily Handelsblatt published in the week of 2026-07-13.5 Prognos estimated Germany could lose about €1 billion on each day temperatures exceed 35°C, and that the country could face three or four such heatwaves each summer.5
The 2018 Rhine low-water event, in which reduced barge capacity contributed to a 1.5% decline in Germany's industrial output and knocked 0.4% off GDP, according to the Kiel Institute for the World Economy, remains the closest historical parallel.5 This summer is tracking closer to that pattern than any year since.
ICE Endex TTF front-month was flat at €58.23/MWh on Tuesday morning (2026-07-28), while German power stood at €125.77/MWh, also unchanged on the session. [live_prices] Neither level suggests a market fully pricing sustained nuclear curtailment through August. Analysts who flagged extreme weather as the dominant Q3 driver in early July (2026-07-03) named renewed heatwaves as the most likely trigger for the next move higher — and with Rhine water levels already at multi-decade lows for the season, the conditions that produced the June spike have not gone away.3,5