“Most expensive electricity in Europe”: what is behind the boom in bills in Italy

Today in Italy, as reported by SkyTG 24, the price of wholesale electricity is 474 euros per megawatt hour (MWh), in 2019 it was 49.5 euros, thus recording an increase of 957%.

A situation that finds an explanation in Italy’s strong dependence on gas. 46% of the electricity we use is produced with natural gas, typically from methane power plants. Methane, the price of which is close to 200 euros per megawatt hour, greatly affects the price of the bills we receive from electricity suppliers.

First in Europe

Italy is at the top of the electricity price ranking. There is a chasm between 474 euros per local MWh and those of Greece which is second with a price of 368 euros per MWh. In France the cost is 348 euros, in Germany 345 and in Spain 144 euros per MWh.

We speak of a trend that is now structural by definition, that is, a mechanism that is becoming a peculiar foundation. The price of electricity in Italy is rising faster than elsewhere and the price brackets compared to other European countries are getting wider and wider.

We are in the situation of the dog biting its tail: the more gas is used to generate electricity, the more the price of the latter will tend to rise.

The consequences

The price of electricity also affects companies, starting with those in the food supply chain, which are also grappling with the uncertainties arising from the nearby Russian-Ukrainian front and which impose doubts regarding the raw materials markets, on all those of vegetable nature.

Paradoxically, in order to have a clearer and therefore more measurable idea, it is necessary to wait for the next few months, already knowing that, as we approach the cold months, the demand for energy will increase. All this will also have repercussions on inflation, because the prices of the products we buy will tend to rise, which in turn will affect general costs, including energy.

If then those measures already foreseen were to be implemented energy rationing (“Electric lockdown”) we could move quickly towards a further tightening of the Italian economic situation.

The solutions

The greater use of renewable energies it would be a panacea. But it is a transition that is not made overnight, it must be planned over time. Italy is doing it, as shown by the many bonuses recognized to those who aim at the energy efficiency of their home (there is not only the Superbonus 110%).

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About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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