The summer stress test: How heat waves are rewiring Europe's power markets

**Eklavya Gupte** (0:01)
Welcome to Energy Evolution, a podcast where we examine the forces shaping how we power, fuel and electrify our future.
I'm your host, Eklavya Gupte, and in this episode, we're looking at how heat waves are disrupting power markets, reshaping demand patterns, straining supply, and driving prices to fresh summer highs, especially here in Europe.
If you've been watching European power markets this summer, you'll know that the old certainties are slipping away. The notion of winter as the only season of stress is fading fast. Rising global temperatures are starting to impact electricity consumption patterns, with traditional winter heating peaks now challenged by surging summer cooling demand, especially in Southern Europe. Now, we've already seen about three heat waves sweep across Europe in recent weeks, with power prices in Belgium and Netherlands especially rising to multi-year highs.
It's not simply the heat, it's the timing, the frequency, and the way these events are reframing the very architecture of our energy system. Solar generation has surged, offering midday relief, but every day the grid faces a new test, especially as cooling demand has been very strong. The backbone of European supply, French nuclear and alpine hydro has revealed vulnerabilities with outages and drought warnings now a recurring theme. Even the rise of data centers with their relentless round-the-clock cooling requirements is reshaping demand profiles and adding a new layer of complexity to grid management. Now, to help us make sense of these changes, I'm joined by Parth Goel, who's an analyst for European Power and Renewables at S&P Global Energy CERA. He's also a Doctor of Philosophy Researcher at the University of Oxford, working at the intersection of energy systems, political economy and public policy. In today's conversation, we'll dig deep into the numbers and narratives behind Europe's evolving summer stress test. Let's go straight to that conversation. Parth, welcome to the Energy Evolution Podcast. Great to have you here with us in the studio.

**Parth Goel** (2:44)
It's a pleasure to be here, Eklavya.

**Eklavya Gupte** (2:45)
So, Parth, we're recording this in early July.
It's going to get 30 degrees Celsius in London in the next few hours. So maybe to start off with, can you paint a picture of what's happening right now in power markets and how are they responding to the current heat waves?

**Parth Goel** (3:00)
Yeah, absolutely. So as you said, we've already had about three heat waves. They're more incoming.
We had one in late May and a prolonged one in June, and the power markets have definitely reacted. So prices in some of these markets have already reached record highs. Belgium, for example, saw a quarter hourly price of 1,000 euros per megawatt hour. Netherlands as well, during that same period, saw a price of 900 euros per megawatt hour.
Perhaps the more notable part is not that these are happening, but when these are happening. So they're happening in June and typically expect July to be your tightest month. And overall, it's just been a picture of tightness and these temperatures are also having an impact on supply. So French nuclear, for example, the cumulative lost power from French nuclear due to high temperatures has already exceeded what one might see in a summer. And it's much higher than any of the recent years.

**Eklavya Gupte** (3:55)
Thanks. And obviously we have seen the frequency of heat waves pick up in recent years. Is there any particular differences between what we're seeing currently?

**Parth Goel** (4:05)
Every heat wave is marked with some structural differences.
So, in 2022, for example, we had elevated gas prices which were contributing. And it was a historically bad hydra year. So reservoirs were already depleted, which further constrained supply. And then on top of that, the French nuclear fleet, which Europe as a whole relies on for power generation. It had other outages as well, which contributed to a supply tightness.
This year, the picture isn't as quite as bad as 2022 But at the same time, we've entered with hydro in a bit of a cautious manner. French nuclear has already seen 7 gigawatts of outages due to temperature, and that's roughly double what we've seen in the last couple of years. But even then, because of higher availability, some of that impact is being buffered. And that's not to say that the role of solar isn't there. Solar generation has been a major driver of supply, and it sort of enabled a bit of a supply that wasn't there previously, and has certainly contributed to buffering that impact that we've seen over the last couple of years.

**Eklavya Gupte** (5:03)
Okay, thanks. So now let's go maybe into some of the demand and supply dynamics. What sort of impact do these heatwaves have on demand?