The Italian government has approved a decree-law aimed at mitigating the impact of rising gas prices on electricity bills for households and businesses (Italian government press release, 09/11/2026). Under the new mechanism, the government will compensate gas-fired power plants for the difference between the gas price on the TTF market and a ceiling of EUR58.9/MWh, provided the market price exceeds this threshold. Italy is highly dependent on natural gas, which accounts for almost half of its electricity generation (48% in 2025, according to our data), the highest share among energy sources.
"Starting in January, the measures of the decree will allow an average reduction of about EUR15/MWh," said the Minister for Energy Security, according to the Italian news agency ANSA. Italian Energy Minister indicated that the measures would lower electricity prices by an average of approximately EUR15/MWh, although he did not provide further details.
The Italian Prime Minister explained that the decree-law targets the "mechanism that raises the price of electricity due to the cost of gas", through "three precise choices": introducing "a cap on gas used to produce electricity" set at EUR58.9/MWh; ensuring that "bring the benefits of energy produced at lower costs to bills", by preventing producers from withholding generation capacity to push prices higher; and "protect savings for consumers", by stopping electricity suppliers from passing increased costs on to customers through their bills.
The EUR58.9/MWh price cap on gas used for electricity generation will apply for a maximum period of 18 months, starting in January 2027, before being gradually phased out.
The decree is expected to be financed primarily through higher system charges on electricity bills paid by certain categories of households and businesses. The Prime Minister also announced that ARERA, Italy's energy regulator, would introduce tougher rules to penalise operators deliberately withholding generation capacity in an attempt to drive up electricity prices.
Interested in Global Energy Research?
Enerdata's premium online information service provides up-to-date market reports on 110+ countries. The reports include valuable market data and analysis as well as a daily newsfeed, curated by our energy analysts, on the oil, gas, coal and power markets.
This user-friendly tool gives you the essentials about the domestic markets of your concern, including market structure, organisation, actors, projects and business perspectives.