Europe Faces Energy Challenges as Hydropower and Wind Power Decline

Lower hydropower stocks and weak wind speeds in Northwest Europe may increase demand for gas and coal-fired power generation this summer. This situation occurs as Europe needs additional gas volumes to refill storage after the winter. Hydro levels and snowpack are below average in continental Europe, significantly lower than in 2024. Gas demand has already risen year-on-year, and low snow levels in the Alps are expected to limit hydropower generation this spring and summer. Analysts predict a rise in gas-for-power demand, potentially competing with volumes needed for storage refilling. This could add bullish pressure on European gas prices and keep German power costs high.