13 August 2026
Executive Summary
Romania has begun disconnecting the only operating reactor at its Cernavoda nuclear power station after record-low water levels in the Danube left insufficient water available for normal cooling operations.
The plant’s other reactor had already been taken offline in July because of similar conditions.
Together, Cernavoda’s two reactors normally provide approximately 20% of Romania’s electricity.
The disruption is part of a much broader European problem.
Austria’s largest hydropower producer, Verbund, says Danube flows around its Greifenstein plant have fallen from roughly 2,000 cubic metres per second under normal conditions to around 700. Austrian hydropower production during the first half of 2026 was 32% below its long-term average.
UK Impact
This matters to UK companies because businesses often treat electricity availability as a given when assessing European suppliers.
That assumption may increasingly be unsafe.
Possible consequences include:
- Higher European electricity prices.
- Industrial power restrictions.
- Reduced manufacturing output.
- Increased energy costs passed through by suppliers.
- Greater reliance on imported electricity.
- Increased use of fossil-fuel generation.
- Production delays within energy-intensive industries.
UK businesses purchasing chemicals, metals, engineering products or other energy-intensive goods from Europe should understand the energy resilience of critical suppliers.
Global Impact
The situation demonstrates an often-overlooked connection between water security and energy security.
Hydroelectric generation obviously requires water.
Less obviously, many thermal and nuclear power plants also depend upon substantial water supplies for cooling.
Extreme drought can therefore simultaneously reduce:
- Hydropower.
- Nuclear generation.
- River transport.
- Agricultural production.
- Industrial water availability.
Romania has declared an energy emergency for August and has contingency plans that could ultimately include restrictions on industrial electricity consumption if conditions deteriorate further.
Neighbouring countries are confronting similar pressures, illustrating that importing electricity is not always a complete solution when the same weather system affects several markets simultaneously.
Our View
Businesses should add water dependency to energy-risk assessments.
Companies should ask critical suppliers:
- Where does your electricity come from?
- Is production vulnerable to energy rationing?
- Does the facility require substantial process water?
- What happens if municipal or industrial water restrictions are imposed?
- Is backup generation available?
- How long can production continue during reduced power availability?
Businesses should also:
- Map energy-intensive suppliers.
- Review energy-price pass-through clauses.
- Monitor power restrictions in key manufacturing regions.
- Maintain alternative suppliers in different electricity markets.
- Test business-interruption assumptions.
- Review whether supplier interruption without physical damage is insured.
- Avoid assuming renewable or nuclear electricity is automatically immune from climate disruption.
The emerging risk is important:
A drought can now disrupt your supply chain through the electricity socket as well as through the river.
Risk Indicator: HIGH
Disclaimer
The information contained within these Market Alerts is provided for general market awareness and informational purposes only. It does not constitute financial, legal, investment, regulatory or insurance advice. Whilst every effort has been made to ensure accuracy at the time of publication using multiple reputable and independently verified sources, geopolitical events, legislation, regulation and market conditions may change rapidly. Readers should obtain appropriate professional advice before acting upon any information contained herein.
Invictus Risk Solutions LLP – Helping organisations stay ahead of emerging risks through informed insight and independent analysis.