EU and Italy Near Deal to Block Gas-Cost Pass-Through in Electricity Prices
Brussels and Rome are finalising an agreement under Italy's Decreto Bollette that would neutralise the automatic pass-through of higher natural gas costs onto final electricity prices in the Italian market.
- 01The European Commission and the Italian government are close to an agreement in Brussels on the Decreto Bollette, Italy's decree intervening in the electricity market.
- 02The deal would neutralise the mechanism by which higher gas costs are automatically passed through to final electricity prices under the EU's System Marginal Price model.
- 03Italy's Decreto Bollette breaks a taboo: it is the first time a large EU country has attempted to sever the automatic link between CO₂-embedded gas generation costs and the wholesale electricity
- 04Under the decree, thermoelectric producers would be reimbursed a portion of CO₂ costs so those costs are not fully incorporated into market offers, with government estimates pointing to a reduction
Sources:en.ilsole24ore.com
UCapital Asset Management LLP or group companies may have commercial relationships with the companies mentioned. This content is not financial advice.
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