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Among the major European economies, Italian enterprises pay the highest average energy price. An Italian corporation pays €0.2778 per kilowatt-hour, which is 28.9% higher than the European Union average, 15% more than Germany, 52% more than France, and 62.8% more than Spain. A variety of variables contribute to this difference. Italy generates 40-50% of its electricity by burning gas. The nation is incredibly susceptible to fluctuations in international markets due to the fact that the wholesale market (PUN) price of electricity is frequently determined by the most expensive source necessary to satisfy demand, which is frequently gas. Furthermore, unlike France (which relies on low-cost nuclear power) and Spain (which invested extensively and early in renewables and benefits from a "Iberian exception" framework for gas price limitations), Italy's energy mix is less diverse. Finally, there are the so-called system costs, that increase the Italian electricity bill with "extra items". Italians pay for incentives for outmoded renewables, the dismantling of old nuclear power facilities, and sector-specific subsidies. Finally, there is limited interconnection capacity with the rest of Europe, as well as bottlenecks in the national transmission grid, making it difficult to import cheaper energy when needed. How can we overcome this? Reduce system costs, accelerate renewables, develop storage systems and smart grids, create long-term contracts, decouple electricity and gas pricing, invest in next-generation nuclear power, and strengthen European interconnections.
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