Europe’s Heat Wave Sends Shockwaves Through the Global Economy   

• A heat dome over Western Europe is pushing temperatures above 40 degrees Celsius, turning a weather emergency into a growing economic threat. The extreme heat is straining healthcare systems, power grids, and agriculture while raising concerns about global energy security and food prices. Europe’s energy network is already under pressure. Weak winds have sharply reduced wind power output, while warmer river temperatures have made it harder to cool nuclear reactors. Some gas-fired power plants have also reduced operations. At the same time, households and businesses are consuming more electricity for air conditioning, driving up demand. As supplies tighten, electricity prices have soared. Germany’s wholesale power prices are expected to exceed 545 euros per megawatt-hour, while prices in France have climbed above 268 euros per megawatt-hour. The United Kingdom has relied more heavily on imported electricity, occasionally paying up to 470 pounds per megawatt-hour. Meanwhile, to avoid shortages during peak hours, grid operators have even offered households financial incentives to reduce energy use. Farmers are also struggling. Prolonged heat has reduced livestock productivity and caused an estimated 205 million pounds in annual losses. In France, raw milk production has fallen by 15% to 20%, threatening supplies of cream, butter, and cheese. Drought across southern Europe is also damaging crops, especially olives. Olive oil prices have risen above $6,198 per ton, increasing costs for sauces, prepared meals, and other packaged foods. The effects extend far beyond Europe. Food companies in East Asia, including South Korea, depend on European dairy products, olive oil, and specialty cheeses for bakery goods, confectionery, and processed foods. Refrigerated storage may delay shortages, but it cannot prevent rising import costs. Should the heat crisis continue, consumers far from Europe may ultimately encounter higher expenses. The episode illustrates how climate-related disturbances in one region can swiftly affect economies and food supplies across the globe. Sean Jung R&D Division Director teen/1785115405/1613367592