Italy approves a €58.9/MWh cap on gas for power plants, valid for up to 18 months

The Italian government on Monday evening, 9 November, approved a new decree-law titled “Urgent provisions to reduce the cost of electricity and gas”, which amends the bills decree of 20 February 2026 (no. 21). According to the Council of Ministers communiqué, the meeting ran from 18:01 to 18:43.

What was decided. The decree introduces two mechanisms for gas-fired thermal power plants. From 1 January 2027, further components of the gas transport tariff are added to the costs refunded to these plants. The second mechanism is an additional refund, set by the regulator ARERA, for no more than 18 months. According to the government's statement, the mechanism kicks in when the gas price exceeds €58.9/MWh, so that the increase is not passed in full into the electricity price, and the measure provides for a gradual exit.

Who pays. The cost is covered by charges set by ARERA and applied to balancing responsible parties in proportion to the electricity they withdraw. The government says they cannot pass these on to bills beyond what the law explicitly allows. ARERA will also adopt criteria to assess capacity withholding and abusive practices on the wholesale market, and for gas it will set the reduction of system charges in 2027; the government cites a cut of more than €850 million.

The figures. For 2027 consumption, the government estimates savings of about €280 for a small craft business using 40 MWh a year, about €210,000 for a large food company using 30,000 MWh and about €520,000 for an energy-intensive company with self-generation and 40,000 MWh. According to Rinnovabili.it, the environment and energy security ministry expects an average reduction of about €15/MWh from January.

Context. An analysis by the think tank ECCO, cited by Rinnovabili.it, shows that the wholesale electricity price doubled between February and October 2026, from about €114 to more than €230/MWh. ECCO estimates that a household consuming 2,700 kWh would save about €17 a year, because export limits reduce the cap's effect to about €10/MWh.

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