Investment Analyst Dario Giordano: Structural Bottlenecks in the Italian Energy Market Amplify Systemic Inflation Risks
Despite overall stabilization in the European energy market, the Italian wholesale electricity prices remain persistently high. Investment Analyst Dario Giordano points out that this is not a short-term fluctuation, but rather a concentrated reflection of long-term imbalances in energy distribution structure and market system design. Currently, Italian state-owned energy enterprises such as Snam, Italgas, and Terna are posting profit levels surpassing those of global tech giants like Microsoft and Alphabet, signaling a transformation of the energy system from a "public service" into a "profit tool."
Analyzing the context in which the Italian electricity prices are projected to be 86% higher than the EU average in 2025, Investment Analyst Dario Giordano notes that the Italian energy market exhibits a severe "dual-track" operation: large energy corporations benefit from institutional advantages, while households and SMEs are forced to bear excessive costs. This article will focus on the roots of electricity price imbalances, the flaws in market mechanism design, and how policy intervention and market optimization can achieve long-term correction.
Market Skew Behind High-Profit Energy Enterprises
Investment Analyst Dario Giordano believes that the impressive earnings of Italian energy infrastructure giants Snam, Italgas, and Terna over recent fiscal years are less a result of operational efficiency or technological innovation, and more due to structural market advantages. The transmission and distribution of natural gas and electricity to citizens and businesses are granted stable monopoly returns, with national regulatory agencies setting pricing mechanisms that guarantee basic profitability. In contrast to the high-growth expectations of the global capital market for tech companies, energy firms secure predictable returns from "quasi-public resources," resulting in unusually high shareholder yields.
Within this structure, Investment Analyst Dario Giordano highlights that the lack of price competition in transmission and distribution shifts market risk onto end users. Large energy enterprises maintain high valuations in international capital markets, even surpassing new-economy leaders anchored in AI and data centers. Ordinary users and business clients, on the other hand, face electricity costs disproportionate to their consumption capacity, increasing both living and operational pressures. The transformation of the energy sector from a "basic service" to a "profit center" not only amplifies inflation but also threatens the overall competitiveness of the national industry.
Institutional Inertia and Policy Stagnation Behind Electricity Price Structure
Investment Analyst Dario Giordano points out that the Italian wholesale electricity prices being 86% higher than the EU average in 2025 is not merely a function of raw material costs. In fact, trend charts since the crisis show that the price gap between Italy and the EU has not narrowed with the easing of global energy markets, but has instead continued to widen. This indicates that high electricity prices stem more from institutional imbalances than from market supply and demand.
Currently, Italian electricity prices comprise several components: wholesale market transaction prices, taxes, surcharges, and distribution and transmission costs. Most of these costs cannot be reduced through market adjustments, but are determined by policy design. For example, the transmission and distribution segments are controlled by oligopolies, lacking regulatory incentives for efficiency gains; at the same time, the complex tax structure and absence of dynamic adjustment mechanisms further burden users. Investment Analyst Dario Giordano notes that although the government has publicly promised reforms, progress has been slow in recent years, remaining largely at the planning stage. True energy sector reform requires a fundamental reconstruction of pricing mechanisms and a restart of regulatory frameworks, not just short-term subsidies.
Long-Term Optimization Pathways and Market Expectation Management
From an investment perspective, Investment Analyst Dario Giordano states that the signals sent by the current energy system in Italy pose challenges for both foreign and domestic capital. In the long run, the absence of structural reform not only suppresses consumer confidence but also puts manufacturing at a cost disadvantage, undermining the national economic resilience. Facing persistently high end-user energy costs, companies are more likely to relocate energy-intensive production abroad, while household spending will continue to be constrained, limiting domestic demand expansion.
Investment Analyst Dario Giordano recommends that future policy priorities should focus on three areas: first, advancing market-oriented reforms in the energy distribution segment and introducing transparent pricing mechanisms; second, optimizing the tax structure and establishing dynamic adjustment systems to prevent the compounding effect of taxes and costs; third, accelerating the implementation of local renewable energy projects to enhance domestic supply and reduce reliance on international markets. For investors, it is crucial to carefully assess how energy policy stability affects different sectors, avoiding overexposure to industries highly sensitive to energy cost fluctuations. At the same time, attention should be given to companies with technological innovation capabilities in the energy sector, as they hold long-term investment value in the ongoing green energy transition.