In Italy electricity is paid for at the price of gas even when gas has nothing to do with it
24 September 2026, 22:14
Confcommercio, note of 19 September: in Italy wholesale electricity costs €69.4 per megawatt-hour more than in France. In plain terms: seven cents more for every kilowatt-hour of energy.
Confcommercio puts the difference down to gas. In 2025 gas generated 43.7 per cent of Italy's electricity, against France's 3.2. True, but it is only half the story.
The other half lies in where and how the price is set. The place is the power exchange, run by GME, a state-owned company: every day producers state the price at which they will sell the next day's power, one quarter of an hour at a time. Power is bought first from whoever asks least — those with solar panels, dams and wind turbines, who spend next to nothing to produce — and the buying moves up the list until there is enough. When there isn't, it is the turn of those with gas-fired plants, who ask more because they have to buy their fuel.
And here is the point: the price of the gas-fired plant becomes everyone's price. Even those who asked for little are paid as much as the gas-fired plant.
It is like a dinner at a restaurant where the pasta runs out and the last guest to arrive gets the lobster: at that point the owner bills every dish at the price of the lobster. The table pays for ten lobsters, one arrives, and the owner calls it the free market.
In Italy almost half of all electricity comes from natural gas plants, so it is often these that set the price. And so whoever owns a hydroelectric plant built sixty years ago collects, for its power, the same price as those who buy their fuel every day. But nothing is burnt in there: that part of the price is pure profit.
The State knows this, because in 2022 it put it in writing. Article 15-bis of Decree-Law 4 of 2022 introduced a 'two-way compensation mechanism'. For solar, hydroelectric, wind and geothermal plants that came into operation before 2010, whenever the price exceeded a value set by law, the excess had to be paid back to GSE, the state-owned company that manages energy incentives.
It remained in force from 1 February 2022 to 30 June 2023.
In September the wholesale price was 73.3 per cent above the 2025 average. So the question, for whoever wrote that mechanism: if in 2022 the excess had to be paid back, why not in 2026?
The law gives the date it ended. Not the reason why.
Meanwhile, according to Confcommercio, shops, restaurants, hotels and bars will pay over a billion more on their bills in the second half of 2026.
For anyone running a business the consequence is this: what they pay for energy follows the exchange price, and the exchange price is often set by the gas-fired plant. What counts is the cost of the most expensive plant, not the average cost of producing electricity. Those who produce their own, with panels on the roof, stop paying the gas price for that share.
The sun doesn't send a bill. Those who sell the sun's energy do, and at the price of gas.
This article was prompted by Confcommercio's note of 19 September 2026 on soaring energy costs, as reported by LaPresse.