The government passes a decree to help families cope with rising energy bills. But decoupling electricity and gas prices is nowhere to be found.
For some months now, Italian households' energy bills have shot through the roof again, particularly gas bills, much as happened in the early days of the Russian invasion of Ukraine, when the first sanctions imposed by the European Union had effectively turned off the taps on Russian gas. So last week the Council of Ministers approved a decree-law with urgent measures to support families and businesses in the face of energy costs: a measure that provides for an allocation of around 3 billion euros. But it does not include a measure that is, on paper, very straightforward to implement and extremely effective, and one that has already been adopted by other European countries: the decoupling of electricity and gas prices.
Among the main measures introduced is an energy bonus for families, an extraordinary contribution of 200 euros in the second quarter of 2025 for those with an ISEE of up to 25,000 euros. For businesses, there are 600 million euros for the Fund for the Energy Transition in the Industrial Sector and a further 600 million euros for the elimination of certain system charges for small and medium-sized enterprises. In addition, a mechanism to monitor price increases is being introduced, to reinvest any additional VAT revenue (which rose from 4.76 per cent to 18.03 per cent between 2023 and 2024) in support for vulnerable families and micro-enterprises. Finally, protections for the most vulnerable customers are being extended, with the continuation of guaranteed supply for those who have not chosen a supplier on the free market. These measures have been deemed insufficient by the opposition in Parliament, not least because they are limited to a period of just three months. And also because no new windfall taxes on energy companies' extra profits have been introduced — that surplus of wealth generated by the disproportionate rise in prices. Not to mention that the decree is also being funded through cuts to research and other social bonuses.
Let us return to the topic of "decoupling". In Italy — as in many other European countries — the wholesale price of electricity has long been determined by the cost of natural gas. This is because many power plants use gas to generate energy and, under the marginal pricing system, the final price of electricity is set by the most expensive source needed to meet demand. More often than not, that source is gas.
Over the past year, the average wholesale price of electricity in Italy — the Prezzo unico nazionale (Pun), calculated on the Mercato del giorno prima (Mgp) of the electricity exchange — has reached 108.52 euros per MWh and continues to climb. Driving the increase is, once again, the cost of gas. None of this is unexpected: Mario Draghi, former Italian Prime Minister, already noted in his European competitiveness report that "in 2022, at the height of the energy crisis, natural gas determined the price of electricity 63 per cent of the time, even though it covered only 20 per cent of the EU's electricity mix". In Italy, the link is even tighter: gas accounts for roughly 90 per cent of price formation, despite representing only 40 per cent of the national energy mix.
With the growing installation of renewable energy sources, talk of "decoupling" electricity prices from gas prices has begun to gain traction. The data speak for themselves: even into 2025, the cost of energy from renewable sources will continue to fall. And yet Italian energy bills keep rising: a paradox. The energy transition would be more cost-effective for consumers, but bills remain tied to the price of fossil fuels, which are becoming ever more expensive.
Italy, in particular, has the highest electricity bills in Europe: January closed with an average wholesale electricity price in Italy of 143 euros per MWh, up on the average of previous months. A year ago, in January 2024, the monthly average was 99 euros per MWh: the increase since then stands at 44 per cent. Comparing January 2025 averages, Italy's wholesale prices are 25 per cent higher than Germany's, 40 per cent higher than France's, 48 per cent higher than Spain's, and a staggering 226 per cent higher than those of the Scandinavian countries. A differential that has been a constant over the past 20 years.
At this point, one naturally wonders: is it possible to make energy bills cheaper? If so, how? As noted, first and foremost the government would need to untie the cost of energy from the price of gas (decoupling). And then, as both Arera (the Regulatory Authority for Energy, Networks and Environment) and the International Energy Agency (IEA) have already pointed out, the most effective strategy for reducing bills lies in encouraging the installation of renewable energy plants.
Italy could, in fact, aim for 100 per cent renewable energy by 2050 and pay just 52 euros per MWh — if it so chose. This is the finding of new research published on ScienceDirect by Italian researchers Lorenzo Mario Pastore and Livio de Santoli. The study 100% renewable energy Italy: A vision to achieve full energy system decarbonisation by 2050 demonstrates the technical and economic feasibility of a zero-CO2-emissions energy system in Italy, while acknowledging the challenges of full decarbonisation but above all underscoring the importance of integrated energy planning.
Which is precisely what Italy is lacking. The fundamental problem, in fact, is that authorised plants are in short supply. In 2024, Italy managed only +7.48 GW, against the roughly +12 GW per year needed to meet the 2030 targets. For this reason, on 12 February the European Commission launched a new step in infringement proceedings against our country for failure to comply with the RED III directive on accelerating authorisation procedures for renewable energy projects. Italy now has two months to respond and adopt the necessary measures, after which the Commission may decide to refer the cases to the Court of Justice.