Heat and drought in Italy are turning up the volume on power prices. The country’s wholesale price for electricity rose to €208 per megawatt-hour for delivery on Wednesday, the highest since December 2022, as air conditioners ran and hydro reservoirs dwindled.
Italian Power Exchange data shows the price climb followed a surge in demand, which hit 47.6 gigawatts around 5 p.m. local time. That spike came at a time when Europe still has lingering energy tightness from the war in the Middle East, and when liquefied natural gas flows are uneven.
Italy already uses more gas for power than most major European nations. In July, gas provided 38% of the country’s electricity, according to ENTSO-E, just slightly below the peak it hit during the Russian-Ukrainian crisis.
Hydropower is struggling. Northern Italian river basins and lakes are under water stress from dry weather and high heat. That’s forcing Italy to run thermal plants more often—plants that run on natural gas and add to the cost of power.
France, a major electricity exporter, is also feeling the heat. High temperatures there have cut the availability of nuclear reactors, making it harder for Italy to get extra power from its neighbor.
Europe’s power prices have dropped since the worst of the energy crisis but have risen again this summer. Italy’s July electricity demand was the highest for that month since 2019, showing just how much heat can tighten energy markets.