German power producers warn of lower output as declines in river levels limit coal supplies

• German power plants are warning that declining river water levels could cause delays in coal delivery.
• A drought is threatening their ability to stockpile supplies ahead of winter, as barges face delays.

Declining water levels on the Rhine River due to a drought in Europe have left German power producers warning of lower output amid coal supply snags, Bloomberg reports.

Shallower water in key river passageways means it's harder for barges to make as many coal shipments, which threatens the ability of power plants to build up stockpiles ahead of winter.

German utility companies EnBW AG and Trianel GmbH each reported supply issues, with the former warning of a cut in power generation, according to Bloomberg.

European coal futures for 2023 climbed 2.2% Friday to $320 a ton — more than triple what it was in January.

The Rhine is a critical vein in Europe's supply chain, as it provides a trade avenue for goods like coal, chemicals, and grains.

Meanwhile, demand for coal is up as power producers look revive shuttered coal-fired plants while Russia slashes natural gas flows.

According to a Reuters report, the German government warned last week that logistics problems on the river could mean coal storage sites in southern Germany will probably not be filled by winter.

As Germany's Federal Ministry for Economic Affairs and Climate Action put it in the document: "Due to very reduced domestic shipping, accumulated coal stocks could quickly fall."