Power plants in Germany are finding it increasingly difficult to source coal amid an energy crisis that is spiraling out of control as falling water levels on the Rhine river add to supply challenges caused by Russia’s war on Ukraine.
Switzerland, which also sits along the 800-mile Rhine river leading to the North Sea, is facing complications with oil product supplies due to the falling water levels, according to a Bloomberg report on Thursday.
The report, which cites government data, indicates that the Rhine’s water level is at its lowest since 2007 for this time of year.
The Rhine handles an enormous amount of supplies for Europe, including fuel and coal, adding to supply chain issues that have already mounted for other means of transportation, including bottlenecked German rail.
Two German power plants in particular–one in Mannheim and one in Karlsruhe–are lacking sufficient coal supplies for operations. Those supplies would typically be shipped in through the Rhine.
According to Bloomberg, citing S&P Global Commodity Insights, in the coming months, Germany will only be able to access some 65% of its coal supply due to transportation issues.
While lower water levels on the Rhine have been wreaking havoc on commodity supplies to Germany for over a week, speaking to traders Friday, Reuters reported an even sharper decline in levels at a key chokepoint, making it difficult for fully loaded barges to get through.
The level of difficulty also means that barge operators charge higher rates for cargo owners, suggesting further increased prices for consumers for oil products, grain, and other commodities shipped on the Rhine.
Overall, the Rhine has become an even more important transit route for commodities in Germany and Switzerland since Russia invaded Ukraine in February.
By Charles Kennedy for Oilprice.com
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