Economy
What Danube’s record lows mean for Europe’s nuclear future
Severe droughts and record-low river levels are disrupting Eastern European nuclear generation, forcing Romania to shut down its last working reactor and straining Hungary’s capacity to keep its plant online, sparking broader debate on how to adapt atomic energy to an increasingly extreme climate.
Reliance on river water for cooling nuclear reactors has long been an issue and has repeatedly led to reduced power output in the summer months, especially in France, which is more dependent on nuclear power than any other country.
But the extremity of drought and heat this year in Europe, which has experienced more warming than any other continent, has added urgency to a debate about adaptation.
Hungary was forced to cut its 2-gigawatt Paks nuclear plant’s output to just over 10% earlier this month, barely escaping a full shutdown for the first time in 44 years. It is now operating at 25% of its capacity.
Romania’s state-owned Nuclearelectrica shut down its last working reactor on Thursday after efforts to divert cooling water to the plant were not enough.
Part of solution but also problem
Nuclear power plants have the advantage of generating baseload power without carbon emissions, meaning they have a role in avoiding fossil fuel burning and tackling climate change.
Romania and Hungary are both committed to expanding their nuclear production as a source of ample, domestic power, but that means finding a way to cool reactors that depends less on river water levels.
Diana Urge-Vorsatz, a professor at the Central European University in Vienna, said scientific modelling showed the trend was for Central and Eastern Europe to become drier.
“This is not only due to less rains, but because the soil moisture and groundwater levels have dropped over the past years, and less precipitation and more heat waves exacerbate soil drying,” she said.
At a conference last year of the Hungarian Hydrological Society, water engineers already warned that “flow patterns may become more extreme and volatile” on the Danube, one of Europe’s longest rivers.
Now governments are seeking solutions under pressure as the emergency output cuts at Hungary’s and Romania’s nuclear plants have forced them to ask companies and households to cut power consumption.
Among the measures proposed, Hungarian Prime Minister Peter Magyar said on Wednesday his government would build what he referred to as a riverbed sill – a submerged, dam-like structure – to raise water levels. Also, two barges could be sunk on Friday to lift water levels to try to avert a shutdown, as the river is expected to shrink further in the coming days.
The country is also reviewing the designs for the planned Paks 2 nuclear expansion that rely on the Danube for cooling. The former government of Viktor Orban selected Russia’s Rosatom for the work without a tender in 2014.
Different technology but water still required
Romania’s Nuclearelectrica operates two 706-megawatt reactors that account for a fifth of the country’s power production. They use Canadian CANDU technology that relies on heavy water, in which the hydrogen in water is replaced with a heavier isotope, to slow neutrons.
The four reactors of Hungary’s Paks plant, which generate around half of Hungary’s power, are Russian-made pressurised water reactors.
Both technologies pump water from the Danube for cooling and then release the water back into the river.
In contrast, Czech and Slovak nuclear power plants use wet cooling towers, which need less water, with the steam evaporated in the process emitted to the atmosphere.
Scientists have raised the idea of hybrid cooling that would supplement river cooling with towers.
Attila Aszodi, professor and nuclear expert at the Budapest University of Technology and Economics, said, however, it was unlikely to be economical to retrofit a cooling tower to the original Paks reactors.
“I don’t think that for the remaining 20-plus years, I mean, the remaining lifetime of the Paks 1 power plant, it would be economical to install a large cooling tower,” Aszodi told Reuters. “A new evaluation of the cooling methods available on the site is definitely necessary.”
Romania plans intervention in Danube
In neighboring Romania, the country’s only nuclear plant sits on a river branch called the Old Danube, which intersects with Bala, another branch.
In 2024, the government approved a project worth 1.02 billion lei ($225 million) to lift the riverbed of the Bala branch to manage the water flow.
The proposed solution includes moving the intersection of the branches further upstream, raising the riverbed sill on the deeper Bala arm.
The project has been delayed, and the government has given no information on when it could be completed. Asked about the impact of low Danube river levels on plans to add two more reactors, Nuclearelectrica told Reuters studies showed the Bala project would ensure that four reactors could function at full capacity.
Eugenia Gusilov, director of the Romania Energy Center think tank, agreed it was feasible, adding alternative cooling methods could be considered before works start.
“Building Units 3 and 4 still makes sense if the necessary hydrotechnical works are done,” she said.
With the U.S.-Iran war showing no sign of ending, oil traders and policymakers are grappling with a critical question: are global oil stocks enough to offset what could become the biggest supply disruption on record?
The answer is far from clear, depending not only on how much oil remains in storage, but also on how much of it can actually be released.
Disruption doesn’t get any easier
How long reserves would last can only be ascertained by figuring out the size of the current disruption.
The head of Saudi Aramco believes the world has lost 2.6 billion barrels of oil since the start of the war, making it the largest supply disruption ever in cumulative terms apart from the 1979 Iranian revolution, according to Reuters calculations.
That amounts to a massive 25 days of global consumption based on pre-war global oil demand of 103 million barrels per day.
However, China cut demand in recent months and that means the world is consuming less oil.
Most analysts believe the daily supply gap to cover demand amounts to 5 million bpd even though Aramco says the world is losing 11 million barrels of supply from the Gulf daily.
The gap might have widened in July after Ukrainian drones shut the Kazakh CPC pipeline, pumping 1.8 million bpd.
Empty after 180 days
The West’s energy watchdog, the International Energy Agency (IEA), in March announced a release of 400 million barrels from emergency reserves and says the global economy still has substantial stocks.
The IEA was created in 1974 in response to another major oil crisis – the Arab oil embargo.
IEA stocks consist of government-held stocks and commercial stocks – together standing at 1.5 billion barrels and enough to cover the current estimated supply gap of 5 million bpd for 300 days.
However, the IEA cannot order the release of commercial stocks, such as those held by refiners for operational reasons.
That leaves only 0.9 billion in government-held stocks – enough to cover the supply gap for 180 days.
The IEA said it is ready to release more if the crisis worsens.
As empty as during Reagan’s presidency
The IEA does not disclose the precise make-up of stocks.
Of its remaining government-held stocks, one-third is held in the United States.
Crude oil stocks in the U.S. Strategic Petroleum Reserve (SPR) fell to the lowest levels since January 1983, when Ronald Reagan was president.
The U.S. Government Accountability Office warned in May that SPR’s infrastructure was deteriorating fast and that a quarter of the reserves is no longer available.
This implies that over 100 million barrels have become impossible to release, according to analysts from Rapidan Energy.
If the U.S. has only 200 million barrels of accessible SPR stocks left, they can cover just 40 days of the current supply gap.
Diesel shortage
A new IEA release is unlikely as many countries have limited stocks left, said Christian Egeland from Energy Aspects.
The depletion of inventories has reduced the buffer against supply shocks, leaving the oil market vulnerable to sharp price rises, said Hamad Hussain from Capital Economics.
Global stocks of diesel and jet fuel are currently at the bottom of their five-year range, according to Morgan Stanley.
The wars damaged Middle Eastern and Russian refineries and have hit diesel and jet fuel particularly hard, said Survo Sarkar of DBS Bank.
China could withstand crisis for much longer
Total global oil stocks, including all types such as commercial stocks, the U.S. SPR, Chinese stocks and stocks on water, look fairly comfortable, according to the IEA.
But a big chunk of those are not real supply buffers as stocks on water, for example, often represent oil and fuel already sold and in transit.
China doesn’t disclose its reserves.
Energy Aspects estimates China held nearly 1.7 billion barrels of crude in July.
However, estimates between consultancies vary from 1.0 billion to 1.7 billion.
In addition, there are unknown quantities of fuel and petrochemicals held in inventories.
With a reserve of 1.7 billion, China could cover its pre-war imports through the Strait of Hormuz, about 5.5 million barrels per day, for almost a year, one of the most comfortable levels in major economies alongside Japan.
Ukraine has sent Russia an offer suggesting they both halt attacks on civilian targets in the Black Sea, a report said Thursday, after mounting strikes on vessels and ports there raised fears over global food supplies.
The offer to suspend attacks was transmitted by Kyiv via a third party, and Ukraine was still waiting for a response, Reuters said, citing a source who is familiar with the matter.
Both Russia and Ukraine, major players in the world agriculture market, have accused each other of intensified attacks on vessels used for exports.
Eu wheat pares gains after report
Kyiv was forced to turn to alternative shipment routes when many shipowners halted stops at ports in late July in the southern region of Odesa – a key hub for grain exports – wary after Russian strikes on dozens of ships.
For its part, Russia had to suspend operations at all three terminals at its Black Sea port of Novorossiysk on Wednesday and Thursday after a Ukrainian attack, and will have to cut its grain exports further.
Before the report, Deputy Russian Foreign Minister Alexander Grushko said Moscow had received no formal Black Sea cease-fire proposal.
“Recently, we have been hearing many calls for various kinds of moratoriums and truces. These ideas are being put forward through various channels, but we have not received any formal proposals,” he said, according to Russia’s state news agency TASS.
Euronext wheat pared gains in choppy trading on Thursday to come off a two-week high following the report.
Ukraine grain exports tumble
Russia has repeatedly aimed to block Ukrainian port operations and shipments that are key to Kyiv’s war-ravaged economy.
In the wake of Russia’s 2022 invasion, the United Nations and Türkiye brokered a deal allowing Ukrainian grain exports to continue to stave off a looming food crisis. In 2023, Russia refused to prolong the agreement.
After that, Ukraine established another sea route that had remained operational until the latest round of escalation. Alternatives – both rail and via the Danube – are extremely limited, Kyiv says.
On Sunday, Türkiye conveyed its concerns about attacks to Russia and Ukraine, saying both should declare a moratorium on attacks in the Black Sea.
The current de facto blockade of Black Sea ports has sent Ukrainian grain exports tumbling 76% year-over-year so far in August, with the agricultural sector warning of vast consequences for the economy should it persist.
Romania shut down its only nuclear plant Thursday, in a rare move due to drought that has caused the Danube river, whose waters cool the plant, to fall to record lows.
Much of Europe is facing a new summer heatwave amid a drought that has driven rivers to historic lows.
The Cernavoda plant, which usually generates a fifth of Romania’s electricity, has been shut down just once before, in 2003, also due to drought.
The Nuclearelectrica company had already shut one of the plant’s two 700 megawatt (MW) reactors last month, and announced Thursday that it needed to shut the second “due to the significant and ongoing drop in the water level of the River Danube.”
“We do not foresee a restart within the next 10 days,” plant director, Romeo Urjan, told Agence France-Presse (AFP).
Efforts to divert Danube flow
To avert a complete shutdown of the reactors, the nuclear company had budgeted more than two million euros ($2.3 million) to divert the Danube’s flow to maintain the cooling of the reactors, including blowing up a rock and sinking four barges filled with rocks into the river.
Alternative power sources, including wind power as well as electricity imports, are expected to ensure adequate supplies, the Energy Ministry said Wednesday.
But it also reiterated an appeal for “responsible consumption.”
It has warned that as a last resort, large industrial users would have to face restrictions in the evening hours to save electricity.
In early August, the government said carmakers Dacia and Ford would pause production in the country until Aug. 19 to help with the power deficit.
Record-low flows
Nearly two-thirds of the Danube has seen flow rates that are the lowest on record for a month of July in 34 years, according to an analysis published Monday by the European climate change observatory Copernicus.
The drought has hit nuclear power providers across Europe.
France, which uses nuclear power to generate around 70% of its electricity, recorded a more than 20% shortfall in atomic production capacity this week, a record deficit caused by outages linked to drought, extreme heat and a jellyfish invasion, according to AFP calculations based on EDF data.
In total, 13 of the 57 reactors in EDF’s nuclear fleet were affected.
The drought in Europe has been exacerbated by human-induced climate change, according to the World Weather Attribution group of scientists, who warn that the problem will worsen.
Hungary races to keep its only nuclear plant online
Hungary, neighboring Romania, has avoided a complete shutdown of its only nuclear plant, Paks, whose four reactors are also cooled by the Danube. Only two of eight turbines at the plant are still working.
Nine days ago, Paks was on the verge of being completely shut down. The continued operation of the last turbine hinged on just a few millimeters of fluctuation in the Danube’s water level.
But with the river expected to drop further, Hungarian Prime Minister Peter Magyar said Wednesday that the government had ordered the construction of a submerged wall, or weir, to try to control flows near the plant.
Two 80-meter (260 feet) barges are also being stationed at Paks that could be sunk to raise the water level.
According to Magyar, Hungarian soldiers were working around the clock on the construction, which should be completed in the next four weeks. This is expected to raise the Danube’s water level by 1.2 meters in front of the cooling system of the plant.
The prime minister estimated the cost at 6 billion forints ($19 million).
The low levels of the Danube, Europe’s second-longest river, have also severely impacted shipping along its 2,850-kilometer (1,770-mile) route stretching from western Germany to its mouth on the Black Sea.
Türkiye plans to launch its lunar spacecraft, equipped with a domestically developed hybrid propulsion system, in the first months of 2027, the country’s industry and technology minister said Thursday.
Mehmet Fatih Kacır said Türkiye had finalized its launch schedule for the Moon mission and that the lunar spacecraft’s homegrown hybrid propulsion system had completed all testing phases.
“We will have achieved and brought to life a technological capability that very few countries in the world are capable of accomplishing,” he told reporters in the western province of Afyonkarahisar.
The minister said space infrastructure has become a strategic pillar of Türkiye’s defense capabilities, pointing to recent achievements in satellite projects including Türksat 6A, Imece, Bilsat, Rasat and Göktürk-2.
Türkiye is also working to secure independent and cost-effective access to space through the construction of its own equatorial spaceport in Somalia.
Kacır said the port is intended to eventually support launches of domestically developed satellites and spacecraft.
“We’re reaching the point where these efforts will enable Türkiye to produce rockets capable of launching our own satellites into space entirely through our own means,” he noted.
“Equatorial regions offer the opportunity to access space through more cost-effective means, taking advantage of the Earth’s rotational speed,” he added.
Kacır said these advances were supported by a growing domestic space ecosystem and that a planned space technopark at Middle East Technical University (METU) would bring together institutions and companies to conduct research and development activities.
Beyond its plans for independent launch capabilities, Türkiye is preparing to sign international cooperation agreements to develop and manufacture components for new space stations and is seeking to participate in additional crewed space science missions, he added.
Türkiye is set to host the 77th International Astronautical Congress (IAC) from Oct. 5-9. The event in the southern province of Antalya is expected to bring together about 10,000 participants from more than 100 countries.
Kacır said the event had already broken previous records for pre-registration and paper submissions and was poised to become one of the largest scientific gatherings ever held in Türkiye.
The congress will include a section dedicated to next-generation space startups, highlighting the role of emerging ventures alongside established companies.
A meeting of parliamentarians and government representatives will also culminate in the Antalya Declaration, which is expected to emphasize peace, security and stability amid global geopolitical divisions.
Global success in exporting domestically built drones has propelled top executives of Türkiye’s defense and tech giant Baykar onto the top of the list of highest individual taxpayers in the country for the fifth consecutive year.
The Turkish Revenue Administration (GIB) announced on Thursday its list of the 100 taxpayers who declared the highest amounts of tax nationwide, following its assessment of annual income and corporate tax returns for the 2025 tax year.
Accordingly, Selçuk Bayraktar, the chairperson of Baykar’s board of directors, and Haluk Bayraktar, Baykar’s CEO, were Türkiye’s highest individual income-tax payers for five consecutive years from 2021 through 2025.
For the 2025 tax year, Selçuk Bayraktar declared TL 2.99 billion ($63 million) in income tax, while Haluk Bayraktar declared TL 2.5 billion. Together, the two executives paid around TL 5.5 billion in income tax.
The taxes were paid following corporate income tax and withholding tax on profit distributions calculated on Baykar’s earnings from the previous year. The roughly 18-fold increase in the amount of tax paid by Baykar’s executives since 2021 was driven largely by the company’s export-focused growth model.
Since its establishment, Baykar has carried out all of its projects using its own resources and continues to operate without receiving cash incentives, grants, or purchase guarantees from the government. The company also says that, from its establishment to the present, it has financed its R&D and production processes by reinvesting its earnings, without even using bank loans.
Looking toward new areas of advanced technology, including space technologies, the company has generated approximately 90% of its total revenue from exports since beginning its R&D activities in 2003.
New export record of $2.2 billion
Baykar, which has been the leading exporter in Türkiye’s defense and aerospace sector for the past five years, has signed supply agreements with 39 countries in total, 36 countries for the Bayraktar TB2 drones and 16 countries for its Bayraktar Akıncı.
The company increased its exports from $664 million in 2021 to $1.2 billion in 2022, and then to $1.8 billion in both 2023 and 2024. In 2025, exports reached a new record of $2.2 billion.
With 90% of its revenue coming from exports, Baykar remained among the top 10 companies in Türkiye across all sectors by export volume for the third consecutive year, while further strengthening its leadership in the global armed-drone market.
Continuing to invest in highly skilled, technology-focused personnel, the company employs more than 8,500 people through its domestic and international subsidiaries.
Top 10 list
Rahmi Koç, honorary chair of Koç Holding, ranked third on the list of taxpayers declaring the income tax of nearly TL 831 million in 2025.
Mehmet Sinan Tara ranked fourth, with TL 676.3 million.
The individuals ranked fifth, sixth, and eighth on the list did not wish to have their names disclosed.
Erman Ilıcak ranked seventh with TL 557.7 million, Mehmet Cengiz ranked ninth with TL 448.7 million and Ceyda Lale Tara ranked 10th with TL 430.3 million.
Among the 100 taxpayers with the highest assessed income taxes, Istanbul ranked first with 78 individuals. It was followed by Ankara and Izmir.
A total of 78 taxpayers on the list chose not to have their names disclosed.
Turkish central bank lifted its inflation forecast for the end of 2026 to 28% but left its interim inflation target for the same period unchanged at 24%, while pledging to maintain a tight monetary stance, its chief said on Thursday.
Presenting the quarterly inflation report in Istanbul, Central Bank of the Republic of Türkiye (CBRT) Governor Fatih Karahan also said that the bank kept its interim inflation target for end-2027 steady at 15% and the interim target for end-2028 stayed at 9%.
“The CBRT will ensure the tightness required by the projected disinflation path in line with the interim targets,” Karahan said.
The bank revised its year-end forecast slightly from the earlier forecast of 26%, in line with market expectations, as it cited mainly developments related to energy prices. It also warned of higher food prices despite an increase in domestic production.
“The outlook for diesel, natural gas and commodity prices excluding energy contributed to the 2-percentage-point revision in the year-end 2026 forecast,” Karahan said.
The bank also incorporated the effects of changes to the fuel-price adjustment mechanism, higher food inflation assumptions and administered prices into its projections.
Türkiye’s annual consumer inflation stood at 31.75% in July, while annual inflation excluding energy and food remained slightly below 30%.
Karahan said the disinflation process had recently lost some momentum because of supply-side pressures stemming from geopolitical developments, but tight monetary policy was visibly restraining domestic demand.
“We observe a clearer slowdown in inflation in categories most directly affected by monetary policy,” he said.
Last month, the central bank left its key interest rate at 37%, as expected, keeping borrowing costs unchanged for a fourth consecutive meeting as it monitors the inflationary impact of the Iran war.
Energy, food prices
Among his remarks, Karahan pointed to improvement in the services side, including in categories that last year weighed more on the inflation outlook, such as rent and education, but instead flagged food prices and energy developments.
“The initial effects of geopolitical shocks on inflation were visible primarily through sub-categories with strong links to energy and petrochemicals,” he asserted.
“Accordingly, we witnessed stronger figures in energy and core goods inflation in the second quarter, which abated somewhat in July,” he further said.
Rising oil and gas prices following Strait of Hormuz disruptions have impacted energy-importing countries, including Türkiye, although authorities have moved to introduce measures such as a slide-scaling system to curb the increase in prices on consumers.
“Another notable factor in recent inflation developments has been food prices,” Karahan said.
The first crop production forecasts for 2026 suggest that production, which decreased amid drought and frost last year, rebounded this year, with fruits and cereals in the lead, he noted.
“This improvement in production exhibits a favorable supply-side outlook for food inflation. However, despite this overall improvement, the negative divergence in food inflation has become more pronounced,” the governor said.
Moreover, despite an overall better outlook in the services category, Karahan suggested that they see “a different course” in transport and communication services.
“Due to the rise in fuel prices, transport services posted strong price hikes in the first seven months,” he added.
Demand slowing down
Among others, Karahan also said domestic demand remained at disinflationary levels in the second quarter, with card spending and trend-adjusted retail sales indicating a continued loss of momentum.
“Thanks to our tight monetary policy stance, the weakening in domestic demand has become more pronounced,” said Karahan.
On the broader economic picture, he pointed out that Türkiye’s trade deficit narrowed in the second quarter from the first as exports increased and imports excluding gold and energy declined.
Furthermore, he indicated that the country’s gross foreign exchange reserves rose by $30 billion from March 27 to reach $185 billion as of Aug. 12, while net reserves excluding swaps increased by $35 billion to $56 billion.
Answering questions from journalists and economists, he also lauded the increase in the Turkish lira deposits, describing it as “a success.”
He also flagged supply-side shocks and emphasized there were many external shocks in recent years, while underlining the importance of tight monetary policy in this regard.
“Without tight monetary policy, we would have seen even higher levels (of inflation),” he said.
“The tight monetary policy stance will be decisively maintained until price stability is achieved in line with our interim targets,” the governor said.
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