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Europe’s latest heatwave dialled up daily power demand by up to 14 per cent, as Europeans turned up their air conditioning to stay cool.

But the sunshine also increased the availability of solar energy, the same analysis from energy think tank Ember shows, helping Europe’s power grids pass “the stress test” of extreme heat. 

Between 28 June and 2 July, peak daily temperatures averaged out at 35°C in Germany and Spain – where some local temperatures crossed 40°C – and 34°C in France. 

As a result of soaring air con use, daily power demand soared by up to 14 per cent in Spain, 9 per cent in France, and 6 per cent in Germany, compared to the previous week.

“Despite the huge pressure, European grids passed the stress test, and solar electricity played a major role in keeping them running,” says Pawel Czyzak, Europe Programme Director at Ember.

How did solar energy help get Europe through the heatwave?

June 2025 saw the highest EU solar generation on record at 45 terrawatt hours (TWh), a 22 per cent increase from the year before. This flooded grids with cheap, clean electricity during daytime hours.

In the peak days of the heatwave, solar delivered up to 50 gigawatts (GW) of power in Germany, generating 33-39 per cent of the country’s electricity.

By contrast, thermal power plants struggled in the heat. In France, 17 out of 18 nuclear power plants faced capacity reductions during the heatwave, with some shut down completely due to high river temperatures which meant their waters couldn’t be used as usual to cool the reactors. 

The Beznau nuclear power plant in Switzerland also had its capacity halved as the River Aare crept up to 25°C – a decision taken to protect the ecosystem. 

In Poland – where there are long-running concerns about the cooling of coal power plants – the government and grid operator PSE proposed an ‘anti-blackout package’ at the peak of the heatwave on 2 July.

Other parts of power systems also struggle during the heatwaves. The overheating of cables is the likely cause of power outages in Italy on 1 July, Ember notes.

The heatwave triggered a spike in electricity prices

“The surplus of solar energy during the day helped prevent blackouts,” says Czyzak. “However, the use of energy storage is still insufficient, leading to reduced energy supply after sunset. This translated into a sharp increase in electricity prices.”

According to Ember’s analysis, this supply-demand imbalance caused average daily power prices to double or even triple in some countries. 

Between 24 June 24 and 1 July, average daily electricity prices rocketed by 175 per cent in Germany, 108 per cent in France, 106 per cent in Poland, and 15 per cent in Spain. During the evening peak on 1 July, prices spiked above €470/MWh in Poland and €400/MWh in Germany. 

Interconnectors – cables used to connect the electricity systems of neighbouring countries – ensured these price spikes dissipated quickly, Ember explains. 

As the heatwave swept across Europe, peaking in Madrid on Sunday 29 June, Paris on Tuesday 1 July, and Berlin and Warsaw on Wednesday 3 July, interconnectors helped deliver electricity to where it was needed most.

Solar electricity storage and renewable ‘energy islands’

But the continent’s power infrastructure still needs a serious upgrade to cope with increasingly severe heatwaves due to climate change. 

Greater battery storage is needed to spread out the variable energy that solar and wind produce, Ember says. And better demand flexibility – i.e. shifting non-critical demand to periods of abundant supply – will help ease peak stress on the grid.

“Perhaps the biggest opportunity is to store solar electricity, to help power air conditioning well into the evening,” says Czyzak.

The experts are also calling for more investment in distributed energy sources capable of starting the network on their own, such as solar farms with grid-forming inverters. Unlike traditional grid-following inverters that only sync with the existing grid, these inverters can start without an external voltage supply. 

A recent project by the UK National Energy System Operator (NESO) showed the potential of this solution, exploring how wind and solar could be used to restart the grid after a blackout. It recommended building renewables-powered energy islands that are later joined to the whole grid. 

Belgium’s transmission system operator is testing grid-forming assets too. It’s all part of the global goal to triple renewable energy capacity by 2030, a measure to mitigate the climate crisis – and the increasing heatwaves it is bringing.

Published on
07/07/2025 – 16:20 GMT+2

As European governments rush to invest in artificial intelligence (AI), hoping to support European champions like Mistral, a new report warns they may be playing into the hands of Big Tech. 

Research published this Monday by the Dutch non-profit SOMO shows that the world’s leading AI start-ups, including OpenAI, Anthropic and Mistral, are deeply dependent on a small group of powerful US tech companies for the hardware, infrastructure and platforms they need to operate. 

“On the surface, these start-ups look like fresh challengers,” said Margarida Silva, author of the report. “But scratch a little deeper and you’ll see they’re built on foundations laid by Nvidia, Amazon, Google and Microsoft.” 

Start-ups dependency of Big Tech

Training advanced AI models requires huge computing power, most of which runs on Nvidia’s specialised chips. According to the report, 11 out of the 12 top generative AI start-ups rely on Nvidia’s hardware to build and run their systems. 

The chipmaker now dominates the global market, not just because of its hardware but also due to its proprietary software, which makes it difficult for competitors to catch up. 

Start-ups don’t just need chips, they need access to massive cloud infrastructure to train and deploy their models. SOMO found that 10 of the 12 firms in its study rely on cloud services provided by Microsoft, Amazon or Google. 

In return for access to this computing power, Big Tech companies often strike deals with start-ups that give them exclusive rights to distribute their AI models. Microsoft, for instance, invested heavily in French start-up Mistral and now has first access to its models through the Azure cloud.  

This move raised strong critics in the European Parliament as the EU Act just adopted sought to buffer European players from dependency on Big Tech. 

Gatekeepers to the market

Even when it comes to selling AI products, SOMO said that Big Tech companies are in control. Nine of the 12 start-ups analysed host their models on platforms run by Amazon, Microsoft or Google, making them the main gateways to businesses and public bodies that want to use AI. 

An example is the European Parliament, which chose the Claude model developed by Anthropic to manage its digital archives. The choice was limited to models available through Amazon Web Services, which holds an EU contract. 

AI sovereignty in question

The report raises serious questions about Europe’s strategy to compete in the so-called “AI race”. While the EU and several member states are investing billions to develop local AI capabilities, much of that support could end up reinforcing US dominance. 

“Europe wants to build its own AI capacity, but the foundations are still controlled by a handful of American companies,” Silva said. 

SOMO is urging EU and national competition authorities to act quickly by investigating cloud contracts, limiting market concentration, and ensuring that switching providers is possible. Without intervention, the report warns, the AI industry could follow the same path as previous tech shifts, where a few companies became gatekeepers for entire markets. 

The $2.7 billion acquisition of Neiman Marcus by Saks Fifth Avenue’s owner last year was supposed to create a luxury powerhouse. Instead, both department stores are losing customers and sales to competitors including Bloomingdale’s and Nordstrom.

Sales at Saks Fifth Avenue fell 16 percent during the quarter that ended in June from a year earlier, according to Bloomberg Second Measure, which tracks debit and credit purchases. During the same period, combined sales at Neiman Marcus and Bergdorf Goodman sank 10 percent. The slowdown accelerated over the three months, with June showing the biggest drop at the three retailers.

Meanwhile, sales at Bloomingdale’s, owned by Macy’s Inc., and Nordstrom Inc. both rose more than 10 percent during the same quarter, according to Second Measure.

The declining revenue figures show the magnitude of the challenges facing Saks Global, as the combination of the department store chains is called. The closely held company is trying to reverse the sales decline and just took on more debt in part to pay vendors $275 million in overdue bills.

Bloomberg Second Measure data collects more debit than credit card purchases. Because Neiman Marcus, Bergdorf Goodman and Saks typically sell more expensive luxury goods than Bloomingdale’s and Nordstrom, the data might not capture all the spending of the chains’ affluent shoppers, who tend to use credit cards more frequently than middle-income shoppers. That means the sales slowdown could appear sharper than it really is at Saks and Neiman Marcus.

But the Bloomberg Second Measure data is still helpful to show the trajectory of revenue trends. In June, sales fell 28 percent at Saks and 26 percent at Neiman Marcus and Bergdorf Goodman. At Bloomingdale’s, sales rose 13 percent.

After Saks borrowed $2.2 billion in December to finance its acquisition of longtime rival Neiman Marcus, executives had planned to spend this year working to combine the two iconic chains, cutting costs and streamlining technology and supply-chain operations to position the new juggernaut to take an even greater share of luxury spending in the US.

But the company has also been contending with some vendors who are slowing or holding back their shipments, worried about not getting paid. Investors, concerned about Saks’ ability to pay its bills, have sent the price of its bonds plummeting in recent months.

The challenges aren’t all homegrown. The broader luxury sector is undergoing a slowdown, too. That’s hit sales at LVMH Moët Hennessy Louis Vuitton SE and Gucci owner Kering SA — brands that sell large quantities of products at Saks Global.

Saks Global has seen green shoots recently, including an uptick in vendor shipments after the company secured new financing. It expects “this trend to continue as we execute on our plan to begin paying outstanding balances in July,” a Saks Global spokesperson said in a statement. “As inventory flow approaches normalized levels, we are confident that we can deliver for our customers.”

Also, Saks’ recently launched storefront on Amazon.com is starting to show a positive response, the spokesperson said.

Client Complaints

Even if Saks repays overdue bills and persuades enough vendors to restart or increase their shipments of merchandise, the company still has another uphill battle: win back clients who have shifted their shopping to rivals in recent months or pulled back on spending altogether because of economic jitters.

Complaints about receiving orders in damaged boxes, charging for returns and rejected or delayed refunds from Saks and Neiman Marcus have increased since the beginning of the year, said Bloomberg Intelligence analyst Mary Ross Gilbert, who has looked through online reviews. That points to how Saks’ efforts to conserve cash and cut costs are starting to undermine what’s supposed to be a high-end shopping experience, she said.

“Bankruptcy risk remains given what appears to be a multitude of execution problems impacting customer experience,” Ross Gilbert said. “It’s just so much easier to shop elsewhere.”

Although online reviews about retailers in general skew negative, those raised about Bloomingdale’s tend to focus on late package deliveries and are more benign than customers’ frustration with Saks Global, Ross Gilbert said.

The Saks spokesperson said the company’s fulfilment centres have implemented new processes that “reduce the time for processing returns within 7 to 10 days, while ensuring customers receive high-quality merchandise in future orders.”

Saks Fifth Avenue has had steep revenue declines since early 2023, with sales falling an average of nearly 21 percent each quarter versus a year earlier, according to Bloomberg Second Measure.

At Neiman Marcus and Bergdorf Goodman, revenue trends have been choppier. Sales were up in the final quarter of 2024 and again in the first quarter of 2025 versus a year earlier, but then turned negative in the most recent one. Meanwhile, Bloomingdale’s and Nordstrom have increased year-on-year sales every quarter during the last year.

Holiday Season

The pressure on Saks is particularly acute now because it’s filling its warehouses and stores with products to sell during the crucial holiday season from November through January.

If vendors hold back on shipments to Saks now — because they don’t want to risk not being paid or being paid late — that would leave the department stores without enough luxury goods on shelves during the holiday shopping season, which would likely accelerate shoppers’ shift to Bloomingdale’s and Nordstrom.

Saks is using $600 million in fresh financing to start to make $275 million in overdue payments to brands this month and, separately, is starting to pay them for new products they’ve shipped since the beginning of the year.

“We’re in the window where, I think, investors and brands are looking to see how the proposed game plan is actually going to play out in real life,” said Jeff Abrams, founder and chief executive officer of Los Angeles apparel company Rails, which sells its products at Saks. “This next month or two will be very telling.”

Rails has continued to ship merchandise to Saks despite being owed a couple million dollars because Abrams sees an opportunity to expand the availability of Rails products at the department store as other brands scale back, wary of not getting paid. But Abrams is also continuing to open up more Rails stores across the US in part to be less reliant on selling its products at third-party retailers.

Rails has started to receive some recent payments from Saks, via its financial intermediary, called a factor, which guarantees orders from retailers.

Vendors, particularly smaller ones that have less financial room to manoeuvre, are between a rock and a hard place with Saks. To ship or not to ship, that’s the question they’re asking themselves. They don’t want to risk more unpaid bills but, at the same time, Rails and others want Saks — which needs more inventory — to succeed.

“If Saks can stabilise and thrive,” Abrams said, “that benefits us and many other vendors as well.”

By Jeannette Neumann