Italy’s power prices down 8% in 2024, but taxes weigh on bills

Europe’s electricity market saw mixed trends in 2024, with prices rising in 10 countries (France +19%, Portugal +15%) and falling in 17 (Italy -8%, Luxembourg -33%), according to ARERA’s annual report to Parliament.

Italy recorded one of the sharpest drops in gross household electricity prices, down from 38.64 to 35.7 eurocents/kWh, cutting the gap with the Euro area average to 15% from 24.7% in 2023. However, higher network charges, taxes and levies (+28%) offset savings from lower energy and grid costs. Taxes and levies rose to 9.8 eurocents/kWh, the highest among major EU peers (+134% vs. France, +65% vs. Euro area average).

National electricity demand grew by 2.3%, driven by all sectors except industry (-0.5%). Domestic production covered 83.7% of total needs (net of pumped storage) with the rest imported. Gross domestic generation rose by 3.2% to 273.3 TWh, thanks to a 14.9% jump in renewables — mostly hydropower (+30.2%), which reached 52.8 TWh, near its ten-year highs — offsetting a 6% drop in thermoelectric output.

Enel remained Italy’s largest producer with a 13.4% share (down from 16.9% in 2023), followed by ENI (9.1%, stable) and Edison (8.9% in thermal generation).

From July 1, 2024, Italy launched the new “Gradual Protection Service” for non-vulnerable households, completing the phase-out of the regulated market. Out of 30.5 million domestic supply points, 5.6 million remained under the old regime, 1.7 million joined the new transitional service, and 23.2 million switched to the free market (up from 21.4 million in 2023).

Household switching increased again: 23.8% changed supplier at least once in 2024 (18.9% in 2023). Enel stayed the top seller with a 24.8% market share (down 6% year-on-year), ahead of A2A (8.3%) and Edison (6.3%). Market concentration in the free market eased slightly: the top three players held 39.3% (44.1% in 2023).