Published on: 2026-08-13
The squeeze is concentrated in the evening peak, with French and German intraday prices above €300 per megawatt hour in the 8pm to 9pm window on Wednesday.
Record-low levels on the Loire, Po, Rhine and Danube are cutting hydro output, reactor cooling and coal barge deliveries at the same time.
Jellyfish at Gravelines account for more than 3 GW of the French shortfall, so not all of it reverses when the heat breaks.
The forward curve prices gas rather than weather, with German baseload for 2027 carrying a premium of close to €40 over France at the end of July.
Brussels sees no near-term adequacy risk, which leaves industrial buyers on floating contracts absorbing the higher marginal cost.
French day-ahead power jumped 21.8% to €142.50 per megawatt hour on Tuesday and the German contract rose 22.8% to €138.50, as Europe’s fifth heatwave of the summer collided with a shrinking supply base.
What separates this heatwave from the previous four is the supply side. France recorded a record 20.4% of nuclear capacity unavailable on environmental grounds on Wednesday, and Romania disconnected its last working reactor on Thursday.
This remains a cost story rather than a shortage story. Supply is holding across the interconnected market. What has repriced is the cost of the last megawatt hour at peak, and who has to pay for it.
Wednesday’s intraday session was firmer still. Prices in both markets for the 8pm to 9pm window traded above €300 per megawatt hour in intraday dealing, clearing the day-ahead level struck for the same hour a day earlier.
The premium showed conditions had tightened after the auction closed, as generation and demand expectations were revised.
The evening peak sits at the centre of the move. Solar fades after 7pm while air-conditioning load holds, leaving dispatchable plant to close the gap at the moment when least of it is available.
Wednesday added a rare complication. A solar eclipse across northern Spain and western Europe removed close to 9.7 GW of photovoltaic output at its maximum, about 3.7% of installed EU capacity.
Operators had planned for it and supply held. Southeast Europe has produced the sharpest prints, with day-ahead prices on seven regional exchanges up 50% to 100% on average in the week to 6 August.
Europe’s four largest rivers, the Loire, the Po, the Rhine and the Danube, fell to record lows in early August, the European Commission’s Joint Research Centre reported on Wednesday.
Rhine discharge at Lobith averaged 37% of its 2019 to 2025 norm in July. The Garonne at Tonneins ran at 5% of its usual July flow and the Loire at Saumur at 13%.
Low water damages the system three ways at once. It cuts hydro output, strips the cooling capacity thermal and nuclear plants depend on, and along the Rhine restricts the barges carrying coal to German stations.
| Constraint | Effect on the Market |
|---|---|
| French nuclear outages | Lower peak output and a thinner export cushion for neighbouring markets |
| Low river flow | Weaker hydro generation from the Rhine basin to the lower Danube |
| High river temperatures | Thermal discharge limits can force nuclear reactors to reduce output |
| Weak German wind | Greater reliance on gas and coal plants to set the marginal electricity price |
| Cooling demand | Higher evening demand after solar generation fades |
Romania delivered the clearest illustration on Thursday. Nuclearelectrica began shutting Unit 2 at Cernavodă at 8am and disconnected it three hours later, leaving the national system without nuclear generation.
Unit 1 has been offline since 28 July, and the two reactors normally supply about a fifth of Romanian output. Danube flow at the Romanian entry point has fallen to roughly 1,370 cubic metres per second, against an August average near 3,900.
Dredging, riverbed blasting and sunken rock-filled barges failed to keep the cooling pumps supplied. The operator has declared force majeure on its sales contracts, with no restart date set.
On Wednesday, 20.4% of French nuclear generating capacity was unavailable because of environmental constraints or external environmental causes, a record in EDF data going back to 2015, according to AFP calculations.
Thirteen of the fleet’s 57 reactors were affected, eight fully offline and five running at reduced power. Earlier in the week, EDF figures pointed to around 7.3 GW of restrictions at the midday peak.
Not all of the shortfall is heat. Five of the six units at Gravelines were shut or curtailed after a swarm of jellyfish clogged the seawater cooling pumps, taking out more than 3 GW.
With roughly 70% of French electricity generated by nuclear, fleet availability feeds directly into prices in Germany, Italy, Spain, Belgium and Britain. The relevant figure for neighbours is no longer France’s annual export surplus but how much it can deliver on a heat-stressed evening.
Spot prices are moving on French reactor availability, while the forward curve is being set by fuel costs. German baseload for calendar 2027 was assessed at €104.24 per megawatt hour at the end of July, against €64.73 for France.
The spread of close to €40 is a gas premium. Gas plants set the price in Germany’s peak hours, whereas the French curve tracks reactor availability that the market still expects to normalise.
Dutch TTF traded near €60 per megawatt hour on Thursday, up around 13% on the month and close to 87% higher than a year ago, with the Strait of Hormuz closure delaying Qatari cargoes.
Gas plants burn roughly 1.7 to 1.8 units of fuel per unit of electricity, so a €10 move in TTF adds €17 to €18 to marginal generation costs. EU carbon closed at €82.36 a tonne, 16% above last year.
Price stress and supply shortage are separate conditions, and the evidence points firmly to the first.
The Electricity Coordination Group, bringing together the European Commission, member states, Ukraine, Moldova and ENTSO-E, met this week and found no short-term adequacy risks, while cautioning that conditions would stay tight into next week.
Plants have been curtailed in France, Italy, Hungary, Romania, Slovenia and Poland. France’s transmission operator has said national capacity remains sufficient even allowing for outages.
Nicolas Goldberg, energy expert at Colombus Consulting, said there is “enough leeway that this does not pose any supply problems in the short term”. The grid is still balancing. The cost of balancing it has risen considerably.
French nuclear availability. Returning the Gravelines units and lifting river-temperature curbs would recover several gigawatts and rebuild the export margin faster than any other factor.
Temperatures and river levels. The episode should peak between Wednesday and Friday before cooler, wetter conditions arrive over the weekend of 15 August. Météo-France sees a 60% probability of above-average temperatures through October.
German wind. Weak output has forced heavier reliance on thermal plant, and a return of stronger wind would pull the marginal price down quickly.
Gas. TTF sets the floor beneath evening peaks. Easing LNG supply lowers that floor, while continued tightness holds it up.
Industrial buyers on floating contracts carry the immediate cost, with limited hedging runway at these levels. The system absorbed a difficult week without a supply failure. What changed is the price at which it absorbs one.
