It is not only very dry and warm in the Netherlands, this is the case in large parts of Europe. And this affects all alternatives to generating electricity, especially now that we have to do without Russian gas. The electricity supply from Norwegian hydropower is now ready for discussion This will affect the prices.

“Hydropower is a very economical way to generate electricity,” says energy economist Gerben Hieminga of ING. “If that disappears in an already stressful market, it will definitely have an impact on prices.”

Norway is concerned about increased drought, which means its water tanks may not be full enough to survive the winter. “What is nuclear power for France, hydropower for Norway,” Heminga said.

And let the production of nuclear power, another alternative to electricity from gas, fall under heat stress. “Water is used in power plants for cooling,” says energy economist Hans Van Cleef of ABN AMRO. “That’s why these power plants are located on the water.” If the water is too hot, the cooling capacity as well as production decreases.

Then there is coal as an alternative to gas. “Coal is transported by water. Now that the water level is down, boats can take less,” Van Cleef says. In short, “drought and heat are affecting the entire energy market.”

Even renewable energy suffers from hot weather. “There’s usually a lot of sunlight, so it’s not a problem for solar,” Heminga says. “But the heat often comes with no wind, so there’s less wind energy as well.”

An unprecedented confluence of circumstances makes everything more expensive

Above all, there is an unprecedented confluence of circumstances, in which the war in Ukraine and the climate play a negative role. “It used to be dry in the Alps, while it rained a lot in Scandinavia. Now it’s warm and dry everywhere in Europe and for a long time too,” says economist from ING Hieminga.

“Drought and heat affect everything,” Van Cleef concludes. “Directly because crops are lost, indirectly because energy production is affected. And if energy becomes more expensive, everything becomes more expensive.”