Record Low Danube Waters Push Eastern Europe Toward Electricity Rationing

Low Danube levels halve the capacity of barges carrying coal and LNG to power plants in Hungary, Serbia, and Bulgaria. As fuel deliveries drop, utilities are forced to source gas on the spot market, bidding up TTF prices.

Weather models suggest the heatwave and drought could persist for weeks, keeping river levels depressed. Unless significant rain arrives, the supply bottleneck and price pressure are likely to last through the summer.

Hungary relies on river transport for 60% of its gas and coal imports. Supply curbs force the country to import costly LNG, widening the trade deficit and eroding investor confidence in the HUF.

EUR/HUF has traded in a 390–410 range this year; a sustained energy squeeze could push it toward 420, a level not seen since late 2024.

When hydro and gas plants reduce output due to water shortages, utilities often fire up coal units, which need more carbon allowances. This incremental demand for EUAs pushes prices higher.

EUA prices have been rangebound near €80/tonne; if coal burn spikes across the region, a breakout toward €85–90 is plausible in the short term.

Poland uses coal-fired plants that rely on river barges for fuel supply. When barges cannot navigate, plants face input shortages, threatening electricity output and economic stability, which weighs on the zloty.

Possibly—Poland has a larger domestic coal base, so its energy mix is less reliant on imports. If the crisis remains concentrated on the Danube, PLN may hold up better than HUF.