Europe’s Hottest Winter on Record Is Triggering an Unseen Energy Crisis

In the past, the arrival of winter in Europe was somewhat predictable. The Alps were covered in snow. Grey skies caused the Rhine to slow. Apartments in Berlin were filled with the hum of radiators. Something felt strange this year and more so in recent years. People drank coffee outside in the January sunshine in Bilbao. Chairlifts hung over grassy slopes in the French Alps. It had a nice appearance. It wasn’t comforting.

The hottest winter on record in Europe did something odd. It subtly exacerbated a structural energy issue that could persist for years while temporarily calming panic.

The warmth seemed like a present at first. As households reduced their heating, the demand for gas fell precipitously. After Russia’s supply cuts, storage facilities that were once thought to be dangerously low remained fuller than anticipated. Prices dropped. Politicians blew out their breath. As benchmark gas contracts fell, investors appeared to think the worst was over.

This comfort, however, might have been deceptive.

Frequently disregarded in public discourse, hydropower quietly forms the foundation of Europe’s electrical grid. Rivers run weaker in the summer when the winter snowpack thins. That is important. Hydropower production fell by about 20% in 2022, which made utilities rely more on gas-fired power plants. It was difficult to ignore how vulnerable the system appeared when I stood on the banks of the Rhine last summer and watched cargo ships scraping through shallow water.

Particularly in France, nuclear energy had its own limitations. Cool river water is necessary for reactor temperature regulation. It is necessary to decrease output when rivers warm and levels drop. It is hard to overlook the irony that milder winters meant to reduce the demand for heating actually make the summer electricity supply weaker. The strain merely changes with the seasons.

It seems as though Europe braced itself for a harsh winter that never came, only to be left vulnerable in a different way.

There is a slight but noticeable change from winter heating stress to summer cooling pressure. Cities in northern Europe, which were traditionally designed to withstand cold temperatures, are installing air conditioners more quickly. Once consistently peaking in December and January, electricity demand now spikes during heat waves. Grid operators are recalibrating risk, updating stress models, and modifying forecasts.

Yet there is still uncertainty. The amount of gas stored is still comparatively healthy. Renewable energy sources, especially solar and wind, are still growing. Nearly half of Europe’s electricity mix came from renewable sources in 2024, which would have seemed like an ambitious goal only a few years ago. Renewables, however, are not constant. Backup is necessary when the wind stops or the sky becomes overcast. Even though storage capacity is increasing, it is still insufficient to even out all fluctuations.

The economic repercussions were evident when strolling through a typically busy Austrian ski village in January, where souvenir shops were open but the slopes were deserted. fewer visitors. reduced revenue during certain seasons. Local energy cooperatives are now dealing with thinner water flows after investing in small hydro facilities decades ago. This isn’t an abstract discussion of climate variability. It’s intimate.

Regarding Europe’s resilience, investors appear cautiously optimistic. Compared to the wildly volatile price swings of 2022, markets have stabilized. However, the cost of electricity is still structurally higher than it was before the war. Infrastructure improvements, geopolitical unpredictability, and carbon pricing schemes all contribute to expenses that consumers still bear.

Europe’s ability to endure a sudden reversal—a truly frigid winter coupled with limited LNG supplies—is still in doubt. It seems like there is less room for error than public policymakers acknowledge. The system no longer has much flexibility, as one analyst recently stated.

Volatility, rather than just temperature, may be the more significant problem. In 2021, a wind drought in Europe decreased the output of turbines. Droughts of snow followed. Rivers became warmer. By itself, each event might be controllable. When taken together, they expose a system based on presumptions that are subtly crumbling.

A change in psychology is also taking place. In the past, warm winter afternoons seemed like an exception. They feel like sneak peeks now. It’s harder to ignore the trend when you see kids in Munich playing soccer in short sleeves in the middle of January, something that would have raised eyebrows ten years ago.

In response, governments are investing in battery storage, bolstering cross-border grid connections, and speeding up the deployment of renewable energy. Infrastructure, however, requires time. Permits are more time-consuming. Climate trends are also accelerating.

This winter, Europe managed to avoid collapse. That much is accurate. However, stability is not the same as survival. Rationing or sudden blackouts are not the answer to the invisible energy crisis. It concerns the infiltration of structural fragility into a system that is already under stress from geopolitics and decarbonization objectives.

The continent is adapting to a climate that is no longer predictable. In addition to temporarily lowering heating costs, warmer winters are changing hydrology, putting stress on nuclear fleets, and altering consumption patterns in ways that planners are only now starting to understand.

It would be nice to think of this winter as an exception. That feels more and more naïve.