Record-low Danube water levels are creating pressure across Serbia’s energy sector, fuel logistics and industrial supply chains, reducing hydropower output and limiting river transport capacity.
Electricity generation at Đerdap 1 hydropower plant has fallen to approximately 5,000 MWh per day, around one-third of its normal production level. May and June recorded the weakest performance for those months since the facility began operating in 1970.
Hydropower losses increase electricity supply pressure
The reduction in output represents a loss of nearly 10 GWh per day. Replacing this electricity volume at wholesale market prices of €100–€130/MWh would require approximately €1 million–€1.3 million per day, excluding additional costs related to congestion, balancing and generation profiles.
Elektroprivreda Srbije (EPS) can manage short-term production disruptions, but an extended drought period could reduce cash flow and increase dependence on thermal generation and electricity imports.
Low river levels are also affecting operations at the Kostolac coal complex, where water availability is impacting the cooling system. The situation creates additional operational pressure because the same hydrological conditions reducing renewable generation are also limiting the thermal facilities expected to compensate for lost hydropower output.
River transport restrictions affect fuel supply chains
The Danube disruption is also affecting logistics operations. Barges are currently operating at only 25–40% of normal cargo capacity, while some operators estimate that overall shipping activity has been reduced by half due to slower navigation and increasing restrictions on operating hours. Serbia received only around 25% of planned July fuel imports by river as a result of the transport limitations. Road and rail transport can replace part of the missing capacity, but at higher costs, creating additional pressure on petroleum wholesalers, agricultural companies, construction firms and freight operators.
Industrial sectors face higher transport costs
The impact extends beyond energy imports, affecting companies involved in grain exports, fertiliser imports, metal processing and bulk construction material transport. Cargo volumes that previously moved in a single fully loaded barge may now require three or four separate voyages, increasing handling requirements and extending working-capital cycles before accounting for higher freight costs.
Serbia maintains approximately 269,000 tonnes of strategic diesel reserves, providing a significant supply buffer. However, the reserves secure physical availability of fuel without eliminating the financial and commercial impact of disrupted river logistics.
