Fossil fuels and poor interconnectivity: Italy had the most expensive electricity among EU countries in 2025

Brussels – Dependence on Russian gas below 3 per cent, savings in consumption, improvements in renewables, but fossil fuels still dominate the country’s energy mix and, above all, electricity prices are the highest among the 27 Member States of the European Union. This snapshot is provided by the European Commission in its report “REPowerEU Four Years on: Italy”, which takes stock of the four years since the launch of REPowerEU—the strategic plan for independence from Russian fossil fuels launched in May 2022, immediately following the invasion of Ukraine. 

Overall, the EU has reduced the share of Russian gas imports from 45 per cent in 2022 to 12 per cent in 2025. Through sanctions, Russian coal has been phased out of the European energy mix, and oil imports have fallen from 27 per cent at the start of 2022 to 2 per cent, with only two EU countries, Hungary and Slovakia, importing Russian oil. 

In Italy, dependence on Russian gas has fallen significantly compared to 2021. In 2025, only minimal volumes were imported, accounting for less than 3 per cent of demand, equivalent to 1.5 billion cubic metres of Russian liquefied natural gas (LNG). The Peninsula, explains the Commission, has increased gas imports from other countries, mainly Algeria and Azerbaijan, and LNG imports from Qatar and the United States, while domestic gas production has remained at around 3–4 billion cubic metres per year, accounting for a minimal share of total supply. Meanwhile, the country has also reduced its gas demand by 20 per cent between August 2022 and November 2025, thanks to efficiency measures, milder weather, industry cuts, and growth in renewables. 

Clean energy has played a key role in the country’s electricity generation: in 2025, it accounted for 47.7 per cent of production, above the EU average of 47 per cent. Solar energy ranked first, at 16.6 per cent, followed by hydroelectric power (15.8 per cent). Despite this, fossil fuels continue to account for 52.3 per cent of electricity production in Italy, the fifth-highest share among member states. Due to dependence on natural gas, limited non-fossil flexibility, and poor interconnection capacity—explains the Commission—the average wholesale price of electricity was €116/MWh in 2025, the highest in the EU, where the average stands at €85/MWh. In particular, average electricity prices on the day-ahead market in Italy rose by 12 per cent in 2025, due to higher natural gas supply costs and limited renewable production. Despite the recent fall in daytime prices due to increased uptake of solar energy, the Commission’s analysis shows that Italy remains vulnerable to sharp price spikes during periods of high demand. This is because the drop in solar generation in the evening and early morning hours, combined with limited flexibility from non-fossil sources, often means that thermal power stations must significantly increase output to bridge the supply-demand gap. 

Still on the subject of prices, in the first half of 2025, electricity was more expensive for households in Italy than in the previous year, reaching €0.329/kWh (the fourth highest figure in the EU). Household gas prices also rose to €0.124/kWh, above the EU average. Retail electricity prices for industrial consumers (€203/MWh) also rose, remaining above the EU average (€164/MWh) and ranking third-highest in the Union, whilst industrial gas prices rose but remained in line with the EU average. 

In this scenario, therefore, the Commission states that progress in the solar energy sector must be accelerated: the European target of 700 GW of installed capacity by 2030 requires a faster rate of growth than at present. 

When it comes to infrastructure, Italy still has significant room for improvement. The level of electricity interconnection with other countries stands at 5.13 per cent, one of the lowest figures in the EU and far from the 15 per cent target set for 2030. Despite the 30 existing cross-border power lines, Italy remains a net importer of electricity: around 18 per cent of national consumption is covered by energy purchased abroad, mainly from Switzerland and France, and, according to the European Commission, to reach the technical target of 70 per cent cross-border capacity, it will be necessary to make grid management more transparent and remove the constraints that currently limit flows. This is no small matter when one considers that while wholesale costs account for 61 per cent of the price of industrial electricity, network charges, carbon costs, and taxes account for 10 per cent, 11 per cent, and 18 per cent, respectively, of electricity bills. 

Finally, the Commission issued a clear reminder to Rome to submit its national building renovation plan, which is still missing. This is considered urgent, given that the building sector accounts for 37 per cent of the country’s energy consumption. Furthermore, the Social Climate Plan is also missing; Italy has not yet formally submitted it to Brussels, and it would help to protect the most vulnerable households during the transition.