Rivers run dry: How scorching summer shuts Europe's power plants, chokes supply chains

Europe is grappling with severe droughts this summer that are severely impacting economic growth, leading to drastic measures such as blowing up riverbeds to restore water flow. Romania has shut down its sole working nuclear reactor, which relies on the Danube River for cooling, due to abnormally low water levels. This has prompted Bucharest to deploy naval forces to help increase water flow.

Hungary's Paks nuclear plant, which provides 40% of the country's energy, is at risk of closure due to the same issue. Serbia has responded by reducing its hydropower generation levels.

In Germany, the River Rhine has experienced water levels not seen in 150 years, disrupting supply chains and damaging the economy. The water level at Kaub, a critical transit point for vessels heading south to Germany and Switzerland, dropped to 24 centimeters in recent days - the lowest point since records began in 1880. Experts predict lower levels will persist, according to ETH Zurich.

Water scarcity is a growing issue across Europe, affecting over 30% of the continent where demand exceeds available supply. This water stress is expected to negatively affect German GDP growth by up to 0.2%, according to Stefan Kooths, a professor of economics at the Kiel Institute of World Economy. To cope, businesses have been stockpiling inventories and rerouting transport to rail or road.

Felix Schmidt, a senior economist at the German bank Berenberg, warns that freight rates are already "through the roof," hinting at potential inflationary pressures.

The drying rivers are just one of the many challenges Germany faces due to the escalating climate crisis. The extreme heat wave earlier this year, which affected much of northern Europe, has also reduced productivity, damaged infrastructure, and impacted energy supply, contributing to the nuclear plant shutdowns in Hungary, France, and Switzerland. Additionally, the heightened risk of wildfires, like the current outbreak in Southern Europe, further exacerbates the economic strain.