In the first half of 2026, an Italian household paid an average of 0.314 euros for every kilowatt-hour (kWh, the unit used to measure electricity), taxes included, for consumption between 2,500 and 4,999 kWh a year. That is 11% more than the European Union average, 0.283, according to Eurostat, the statistical office of the Union.
Only Ireland, Germany, Belgium and Austria paid more. Compared with France (0.249 euros per kWh) and Spain (0.251), we pay about a quarter more; compared with Germany, which pays 0.362, we do not. Where does the difference come from?

For businesses the distance is greater: 0.225 euros per kWh without VAT, 25% above the European average. Only Ireland and Cyprus do worse than we do, according to Eurostat.
To answer, I looked at three things: taxes, the wholesale price, and what changes in the countries that pay less.
Taxes Do Not Explain the Gap
The first explanation that comes to mind is taxation. The data say it is not enough: in Italy, taxes and levies make up 25% of the electricity price for households, less than the European average (28.4%).
Even without taxes we remain among the most expensive: seventh out of 39 countries, with 0.236 euros per kWh against about 0.203 for the European average. Part of the bill, however, is not a tax in the strict sense: it is the system charges (oneri di sistema), the items that pay, among other things, for renewable incentives and the social bonus. How Eurostat classifies them, as taxes or not, I have not verified: the number I used is the price with all taxes minus the price without taxes.
ARERA, the Italian energy authority, reaches the same conclusion on the comparison with the euro area: the gap comes almost entirely from the “energy” item, that is, from the price of electricity itself, before grid costs, charges and taxes. On the evolution in 2025 it adds something else: the final price for households fell by 1.6%, but charges and the tax component “neutralize” the possible savings.
An example of how a bill is divided. For a vulnerable customer on the regulated “maggior tutela” service, the service with prices set by ARERA, every 100 euros of the bill are divided like this from October 2026:
- Energy: 63.7 euros
- Grid: 14.2 euros
- System charges: 7.6 euros
- Retail (sales costs): 4.9 euros
- Taxes: 9.6 euros
This is the breakdown after the quarter’s increase, and it is not everyone’s bill: it applies to vulnerable customers on the regulated service, about 3 million, and the open market (mercato libero) has different prices.

Gas and the Wholesale Price
What remains is the price of electricity before it reaches the bill: the wholesale price, the one at which suppliers buy it. The reference price is formed every day in the Day-Ahead Market, where electricity for the 24 hours of the next day is bought and sold hour by hour or, since October 2025, at fifteen-minute intervals.
Not all electricity goes through here: part is bought with forward contracts. The Ministry of the Environment and Energy Security (MASE) writes, in the National Integrated Energy and Climate Plan (PNIEC) of June 2024, that accepted offers are paid at the “system marginal price” (in Italian, “prezzo marginale di equilibrio”).
In plain words it works like this: power plants offer their energy, from the lowest offer to the highest, until the demand of that hour is covered. The last accepted offer, the highest of those that are needed, sets the price, and all accepted offers receive that price. An invented example, just to understand: if three plants are needed that offer at 30, 60 and 100 euros per megawatt-hour, all three are paid 100.
The mechanism is the same in much of Europe: what changes is which plant is the last one needed.
Why gas in particular? The three plants in the example could be solar, hydro or gas, in any order. The 2024 Plan states that combined-cycle gas plants have higher costs to run than, for example, the nuclear plants in other European countries. With higher costs, their offers are, in general, among the highest: for this reason, when they are needed, they are often the last offer.
The market is divided into zones, portions of the grid with limited exchange capacity, and each zone can have its own price. Until 2024, consumption was billed at the PUN (the national single price, prezzo unico nazionale), an average of the zonal prices. From January 1, 2025, the Italian energy markets operator (Gestore dei mercati energetici, GME) writes, purchases are paid at zonal prices, with a compensating component that realigns the cost with the PUN Index GME: what reaches consumers is, in effect, still the PUN Index. For simplicity I call it the PUN.
In the first half of 2026 the PUN averaged 127.2 euros per MWh (megawatt-hour, a thousand kWh): the highest among the 14 European market zones for which I have open-license data.
To compare it with the bill: 127.2 euros per MWh is about 12.7 euro cents per kWh, that is 0.127 euros per kWh. It is the price at which suppliers buy electricity, a part of the 31.4 euro cents of the bill: the rest includes other energy costs, grid costs, charges, taxes and sales. It is not the breakdown in the ARERA example above, which concerns vulnerable customers after the October increase: other customers and another period.
In Germany it was 98.7, in France 61.8. The gap with the European average is largely here. The figure is a simple average of the hours, from GME and Energy-Charts data.

In 2025 as well, ARERA writes, the PUN was the highest among the main European exchanges: it indicates as the cause the strong dependence on gas-fired generation, the first factor in the wholesale price, and writes that prices remain “closely tied” to gas.
Gas really does play a big role: in 2025 Italy produced 47.4% of its electricity with gas. Among the 30 European countries Ember tracks, only Malta (83.1%) and Ireland (48.4%) did more, according to Ember, an energy research center.
The 2024 Plan also speaks of gas as “the main and marginal source for Italy”: marginal here means the plant at the margin, the one that sets the price, not a minor source.
One distinction is needed: one thing is how much electricity comes from gas, another is how often gas sets the price. The price is decided by the last offer that is needed, not by the most widespread technology.
To know how often gas sets the price, there is no single number. GME has an indicator of its own: for combined-cycle gas plants (plants that use the heat of combustion twice) it gives 61.4% in 2024 and 52.5% in 2025, that is, around half or a little more. The details of the method are in the note below.
The European Environment Agency (EEA) uses another method, and for the first 16 weeks of 2026 it gives 66% of the hours in Italy and 9% in Spain. The EEA writes that in those hours gas set the price, but its measure is a comparison: it counts the hours in which the day-ahead price is at least equal to the cost of producing with a gas plant.
The measures are different, over different periods.
Only the EEA’s allows the comparison with Spain, because it has the same method and the same period: in Italy the price reached the cost of gas in about two hours out of three, in Spain in 9% of the hours.
The two measures give a little more than half (GME, 2025) and two thirds (EEA, first 16 weeks of 2026): they are not the same number and should not be added together. Gas is not the only explanation I found in the official documents: ARERA examined another one, which I cover in a later article.
France, Spain, Germany
France produced 68.8% of its electricity with nuclear power in 2025, according to Ember, and paid on average about half the Italian price on the wholesale market.
Spain used gas for 22% of its electricity, against 47% for Italy.
Its 2025 wholesale price was about 67 euros per MWh, against 122 for Italy in the same Ember series.
These are comparisons, not proof: among these countries climate, hydropower, grid costs and regulated rates also differ, and I have not measured them.
Germany has a wholesale price lower than ours, 98.7 euros per MWh against 127.2, but higher bills: 0.362 euros per kWh. This means that other items weigh on the German bill: which ones, I have not broken down.
On February 17, 2026, the German federal government described several measures as relief from energy prices, two of them on parts of the bill other than energy. Transmission grid fees are the part that pays for the power lines: in 2026 the government subsidizes them with 6.5 billion euros. The renewables levy is the item that finances the incentives: the state has already taken it on, 17 billion euros. These are two items that weigh on the German bill, alongside energy, and that the state says it pays in part. Whether and how much they have lightened the bill I have not verified.
The Title Only Partly Holds Up
The title of this article only partly holds up: we rank fifth, not first, for households, and Germany pays more.
It holds for electricity, not for all energy: for household gas, again according to Eurostat, we rank tenth, close to the European average (0.114 euros per kWh against 0.110), although in the second half of 2025 we were third.
And even for electricity the gap with the European average changes from one half-year to the next: it was 2% in the second half of 2025 and about 31% in the second half of 2022.
From August, Prices Rise Everywhere
For Italy, the Council of Ministers postponed on October 28 its examination of a decree-law on the cost of electricity and gas, which I cover here: the Council of Ministers press release no. 195 and the MASE’s 14 billion.
As for the February energy bills decree (Decree-Law 21/2026, converted into Law 49/2026), I have not read its text.
These comparisons have a date. Since August 2026 the wholesale price has risen in all 16 European countries Ember tracks, by a median of 54% between July and October.
In Italy it went from 157 euros per MWh in July to 228 in October, up to the 29th: 45% more, one of the smallest increases in percentage terms. But the October price is the third highest of the 16, after Hungary and Bulgaria.
France, Spain and Germany, which in July were between 97 and 107 euros, rose more and reached around 160. In France the rise was 66%: the French price, which in 2025 and in the first half of 2026 was about half ours, has been 70% of ours since August.
In euros the gap with France remains: 62 per MWh on average from August to October, against 58.5 in 2025. In percentage terms, therefore, the distance has narrowed; in euros it has not.
The cause of the rise is not in the data I have: countries with gas, nuclear and hydro rise together. The MASE writes on October 16 that the aim of its new decree is to limit the effects of the rise in the price of gas on the cost of electricity. To verify that it is gas, I would need the series for gas and CO2, which I do not have.

What Electricity Is Made From
Among the 27 countries of the Union, the wholesale price tends to be higher where more fossil fuels (gas, coal, oil) are used, but the household bill is not necessarily higher: no clear link emerges. The energy sources weigh on the wholesale price; the bill also depends on other things, such as taxes, grid costs and regulated rates.

The bill, then, lies more in the energy we buy than in the taxes we pay on top of it, and gas, according to ARERA, is the first factor in the wholesale price.
But if gas matters so much, why is it precisely in the evening that Italy runs on gas?
In the Series
This is the first article in the series “But Why Do We Italians Pay So Much for Energy?” The answer to the question above is in the next article. After that: who pays for the transition, and what is still missing for wind, storage and rooftop solar.
Method Note (for Those Who Want to Check the Numbers)
Eurostat prices are national averages for standard consumption bands (households 2,500-4,999 kWh a year, businesses 500-1,999 MWh a year), not the average bill: fixed or variable contracts and bonuses are not separated. Switzerland and the United Kingdom are not included; for countries outside the euro, the exchange rate shifts prices. In the wholesale chart I left out the zones with a license that is not open. The wholesale average is simple, not weighted by volume.
GME describes its indicator of gas at the margin as similar to one built on volumes sold. I cannot say whether it measures hours or volumes, because I have not read the formula: for this reason it is not compared with the EEA’s 66%, which counts hours.
Sources
Accessed October 30, 2026. I mark the type of each source: primary (the body that produces the data), analysis (the newsroom on primary data), secondary.
- Eurostat, electricity prices for households (nrg_pc_204, band 2,500-4,999 kWh a year), first half of 2026, data updated to October 19, 2026. Primary; newsroom analysis. https://ec.europa.eu/eurostat/api/dissemination/statistics/1.0/data/nrg_pc_204
- Eurostat, electricity prices for businesses (nrg_pc_205, band 500-1,999 MWh a year), first half of 2026. Primary; newsroom analysis. https://ec.europa.eu/eurostat/api/dissemination/statistics/1.0/data/nrg_pc_205
- ARERA, press release “I numeri dei servizi pubblici” (Annual Report 2025), July 1, 2026. Primary. https://www.arera.it/fileadmin/allegati/com_stampa/26/Comunicato_stampa_ARERA__I_numeri_della_Relazione_Annuale_2025.pdf
- ARERA, Annual Report, presentation by the President, July 1, 2026. Primary. https://www.arera.it/fileadmin/allegati/relaz_ann/26/discorso_presidente_DIGITAL.pdf
- ARERA, press release “Elettricità maggior tutela +37,3% nel IV trimestre 2026 per i clienti vulnerabili” (electricity, regulated service, +37.3% in the fourth quarter of 2026 for vulnerable customers), September 29, 2026. Primary. https://www.arera.it/fileadmin/allegati/com_stampa/26/Comunicato_stampa_ARERA_aggiornamento_Maggior_Tutela_IV_TRIM_2026.pdf
- ARERA, Report 301/2026/I/EFR, August 6, 2026 (gas as the first factor in the PUN). Primary. https://www.arera.it/fileadmin/allegati/docs/26/301-2026-I-efr.pdf
- GME, MGP Results, Historical Data, “Anno 2026” file (hourly PUN Index). Primary; newsroom analysis. https://www.mercatoelettrico.org/it-it/Home/Esiti/Elettricita/MGP/Statistiche/DatiStorici
- Energy-Charts (Fraunhofer ISE), day-ahead prices by market zone, January-June 2026 and August-October 2026, CC BY 4.0 license. Primary; newsroom analysis. https://api.energy-charts.info/price
- Ember, “European wholesale electricity price data” (monthly and daily, through October 29, 2026) and annual electricity data for Europe (file of June 17, 2026), CC BY 4.0 license. Secondary (analysis by a research center on ENTSO-E data); newsroom analysis. https://ember-energy.org/data/european-wholesale-electricity-price-data/
- German federal government, “Energy price relief measures take effect,” February 17, 2026. Primary. https://www.bundesregierung.de/breg-en/news/reduction-in-energy-prices-2358994
- Ministry of the Environment and Energy Security, National Integrated Energy and Climate Plan (PNIEC, the ministry’s document), final version, June 2024 (file of July 1, 2024), par. 4.5.3 (p. 419) and p. 171. Primary. https://www.mase.gov.it/portale/documents/d/guest/pniec_2024_revfin_01072024-pdf
- GME, Annual Report 2024 (move to the PUN Index GME from January 1, 2025; ITM indicator for combined-cycle plants, 61.4%). Primary. https://www.mercatoelettrico.org/Portals/0/Documents/it-IT/Gme_RelazioneAnnualeWeb_2024.pdf
- GME, Annual Report 2025 (June 2026; ITM indicator for combined-cycle plants, 52.5% in 2025). Primary. https://www.mercatoelettrico.org/Portals/0/Documents/it-IT/Gme_RelazioneAnnualeWeb_2025.pdf
- GME, glossary (marginal offer, equilibrium price, ITM indicator). Primary, undated. https://www.mercatoelettrico.org/en-us/Home/Glossary
- European Environment Agency (EEA), Briefing 18/2026, “Renewable electricity – best buffer against gas price volatility,” July 2, 2026. Primary (European Union agency). https://www.eea.europa.eu/en/analysis/publications/renewable-electricity-buffering-gas-prices
- Ministry of the Environment and Energy Security, note on the energy bills decree, October 16, 2026. Primary. https://www.mase.gov.it/portale/-/dl-bollette-pichetto-accordo-politico-preliminare-con-l-ue-
- Eurostat, gas prices for households (nrg_pc_202), second half of 2025 and first half of 2026. Primary; newsroom analysis. https://ec.europa.eu/eurostat/api/dissemination/statistics/1.0/data/nrg_pc_202

