Italy has reached a deal with the European Commission that allows it to lower electricity prices and slash household energy bills in a political win for Prime Minister Giorgia Meloni ahead of elections next year. The agreement will help tackle high energy bills in Italy, which has been hit by the surge in fossil fuel prices stemming from the conflict in the Middle East and is heavily reliant on gas-fired electricity.
Speaking in Brussels on Friday night, Meloni said she was “very happy with these results” and called the outcome “highly significant”. The deal “allows us to intervene in how electricity prices are determined, addressing the impact that the cost of gas has on those prices”, she said. It “enables us to take action to lower utility bills”, she added.
Under the agreement, Italy will be allowed to lower wholesale electricity prices through a mechanism that kicks in once the gas price rises above €59 per megawatt hour. The wholesale gas price is currently about €90/MWh. The Italian government would then compensate gas-fired generators for the difference between market prices and the €59/MWh reference cost. This would be paid for through additional levies on consumers’ bills.
“High energy costs remain the main vulnerability of the Italian economy,” Confindustria said in a report this week, warning that the nation’s economy — forecast to grow 0.6 per cent in 2027 — might not grow at all if the energy scenario deteriorates further.
Source: Financial Times Companies · Summarized by HeadlinesBriefing