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Maguire: Low snow cover in Europe leads to higher gas consumption.

The European appetite for natural gas could grow more than expected in this year, after a lack of snow cover across mountainous regions reduced the potential for hydropower production.

The amount of snow in Italy and Austria has been well below average so far in 2026. This has led to a sharp drop in the fuel source for hydropower plants.

Local utilities use natural gas plants to compensate for the decline in power generated by hydro dams. Hydro dams are the main source of power in Austria, and the second most important form of dispatchable energy in Italy.

According to LSEG, the gas-fired electricity output in Italy is up 24% and in Austria by 17% compared to where it was at this time in 2025.

Power firms are likely to maintain the current level of gas production if snow accumulation continues below historical averages. This will further reduce regional gas stocks, which have already reached multi-year lows.

The prospect of increased gas demand in Europe is a boon for major LNG exporters such as the U.S. The upbeat outlook for gas could be shattered if regional snows or?rains are expected to fall in the next few weeks.

East-West DIVIDE

Recent maps of Europe's snow cover - or the lack thereof – highlight the severity of the shortage in certain areas.

Most of Western and Southern Europe, including the areas hosting the Winter Olympics, does not have enough snow.

Ski resorts are able to create artificial snow for the Olympics.

However, if utilities are looking to manage power flow, they can only rely on real snow to act as a storage reservoir for future hydropower generation during the winter. Then the runoff from the melting snow will be channeled into rivers and dams in order to generate electricity.

LSEG data show that Italy's hydro power production from run-of river dams is down 22% compared to a year ago and the lowest year-to date since at least 2023.

LSEG also has a sluggish forecast for the future of hydro production. The estimated output is projected to be 13% lower than its long-term average through April.

Austria's projected shortfall will be even greater, with production expected to fall by around 40% compared to the long-term norm.

The forecasts for the larger Danube Catchment Area - which spans southern Germany, Hungary and Romania – are in line with long-term averages despite the subpar readings this year.

GAS CRUTCH

Austrian and Italian utilities are used to patchy hydro-generation and have relied heavily on gas plants to fill in any gaps.

Utility companies in Turkey follow similar trends for power generation, with periods when gas-fired electricity is produced coinciding to those of low-hydro production.

As regional gas inventories are already at a multi-year low, power companies across Europe could start to see a trend in the price of replacement 'gas supplies as storage farms, utility networks, and gas exporters control system throughput.

Prices for regional benchmark natural gas are now well above what they were in 2025. The average price per megawatt-hour (MWh) has been around 34 euros so far this year, compared to around 27 euros/MWh?in December of last year.

Price increases could also be expected if the U.S. or any other supplier disrupts the LNG export flow from the U.S.

Gas inflation can cause utilities to lose money and increase energy bills.

If snowfall is scarce in key hydro markets then power firms may be forced to pay for gas to keep the lights on during winter and spring.

These are the opinions of the columnist, an author for.

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(source: Reuters)