Arera Targets Market Manipulation and Zonal Prices as Italian Power Costs Outrun Europe
Italian gas plants set power prices in 89% of hours in 2026, driving a March average of €142/MWh against Spain's €59 and prompting enforcement action and structural reform.
Shell is handing a 3.5-gigawatt development pipeline of battery storage, solar and wind projects in Italy, Spain and the United Kingdom to TotalEnergies, following a deal agreed August 3 (2026-08-03), with 500 megawatts of operating capacity in Italy and the Netherlands also included, Rigzone reported September 11 (2026-09-11). Financial terms were not disclosed.7
The transfer reflects sustained investor appetite for Italian renewable capacity, arriving as the country's power market posts some of the highest prices in Europe. Gas-fired plants set Italy's wholesale clearing price in 89% of hours so far in 2026, Ember, the think-tank, calculated. In Spain, over the same period, the figure was 15%.3
The gap shows in averages. Italy's electricity price ran at €142 per megawatt-hour in March 2026 against €59 in Spain, Ember data showed. The difference traces to generation mix: Spanish solar penetration has compressed marginal costs far more than Italy's, where gas plants dominate dispatch in the vast majority of trading hours.3
Italy's energy regulator Arera moved against one expression of that problem on August 10 (2026-08-10), fining utility A2A EUR 5 million after finding the company had withheld generation capacity at its gas-fired plants for economic reasons, a practice Arera classified as wholesale market manipulation, Montel reported.6
The enforcement action sits alongside a support mechanism Arera is simultaneously developing for gas-fired generators. On May 21 (2026-05-21), Montel reported that the regulator had begun work on a compensation scheme to cover part of producers' non-energy costs, pending European Commission approval. Whether that arrangement sharpens or blunts incentives against capacity withholding is not settled — the design details were not resolved in Arera's initial announcement.1
On market structure, Arera's preferred long-term tool is zonal pricing. On Tuesday (2026-07-14) the regulator said Italy should complete the shift to zonal electricity pricing by 2030, aligning with the rest of Europe, Montel reported July 15 (2026-07-15). The plan had been adopted into law several years earlier but had moved slowly. "The time has come," Arera said.5
Zonal pricing would surface regional price differences currently absorbed into a single national reference price. Supporters argue it creates clearer locational signals for both generation investment and grid expansion. Industrial consumers in high-cost zones face higher bills if the transition is not matched by adequate transmission capacity to connect cheaper generation from other regions.5
Grid adequacy carries a wider regional dimension. EU regulator Acer has separately urged southeastern European transmission system operators to accelerate network upgrades, strengthen cross-border coordination and apply EU market rules more consistently, warning that insufficient interconnection contributed to the 2024 price spikes seen across the region, Montel reported.2
On supply, Rome has mobilised substantial state support. The European Commission in early June 2026 (2026-06-09) cleared a €23 billion state aid scheme for Italian renewable development, authorising a programme forecast to add 37.15 gigawatts of capacity — roughly 48% of Italy's current renewable base, power-technology.com reported. TotalEnergies' acquisition of Shell's Italian pipeline is one early expression of that investment mobilisation.4,7
Christoph Maurer of Consentec, quoted by the Economist in May 2026, described the broader European direction: "We are transforming the system from variable fuel costs to largely fixed costs." In Italy's case, getting there requires building and connecting 37 gigawatts of new capacity before the 2030 zonal pricing deadline — and Arera's willingness to hand out eight-figure fines signals it is not prepared to leave the interim period to the market.3