Italy's power prices are expected to remain high due to limitations in the grid.

The Italian electricity market is characterized by limited cross-border transmission capacity, slow growth in renewable energy generation, and a higher reliance on gas compared to other countries. This has led to Italian day-ahead power prices averaging EUR 105.13/MWh this year, significantly higher than those in France (EUR 53.07/MWh), Germany (EUR 74.93/MWh), and Spain (EUR 57.26/MWh). Recently, the price difference increased, with Italian prices during periods of high renewable generation reaching up to 10 times those in France. For example, on October 19/20, while many European markets experienced negative prices, Italy’s prices remained above EUR 127/MWh. Analysts attribute these higher prices to Italy's supply issues, emphasizing the need for enhanced connections with Austria and France to facilitate imports. Michele Governatori from the think tank Ecco stated that prices should reflect the availability of electricity, and better interconnections would improve overall energy efficiency by fostering competition among resources. Plans to reintroduce nuclear energy in Italy won't provide relief until the mid-2030s, so there is a pressing need to enhance grid capacity to remove isolation of the Italian market, according to energy consultant Sergio Giraldo. He also highlighted the importance of increasing electrification to reduce gas reliance. Kristian Ruby from Eurelectric emphasized the importance of rapidly expanding renewable energy, strengthening the grid to support these sources, and speeding up the adoption of non-fossil flexibility options. Francesco Sassi from RIE mentioned that there is no single solution for improving Italy's price competitiveness; a well-rounded energy mix is vital but requires time and consistent policies. Starting January 2025, Italy will transition from a national single spot price to zonal pricing to meet EU regulations and plans to participate in the European energy balancing project Mari at an unspecified future date, as well as rejoin the balancing algorithm Picasso, which it had exited earlier this year.