This report describes the 2018 update of the most significant cost components listed in Chapter 4 (“The National Electricity Bill and Its Main Components”) of the RSEview monograph titled “Electricity, Anatomy of Costs”, published at the beginning of 2014.

The structure of the national electricity bill is illustrated through its main components that contribute to the price of consumed kWh: the cost of energy procurement in wholesale markets, the cost of dispatching services, the cost of transmission/distribution/metering services, general system charges, and taxes. The first item relates to the cost of procuring the ‘electricity’ product and includes, besides the commodity cost, the commercialization and sales costs borne by the energy supplier. The dispatching service cost covers the resources acquired by the network operator to ensure the safe management of the power system. The third item includes the costs associated with infrastructure (transmission, distribution, and metering networks) necessary to deliver electricity from production plants to consumers and measure the quantities supplied. The fourth item includes charges of general interest for the country’s system, introduced by legal regulations, such as incentives granted to support the development of renewable energy sources. Finally, the tax component relates to VAT and excise rates.

In 2018, the total expenditure incurred by the Italian system (entire society) for electricity consumption was estimated at around 53.5 billion euros, divided into sales services (44%), general charges (25%), taxes (18%), and network services (13%). The total expenditure increased by almost 1% in the past year, remaining roughly in line with the estimated spending volume of the last four years and significantly lower than the 2012 estimate (-4.6%). This corresponds to an estimated unit cost of 17.62 euro cents per kWh consumed (equivalent to 16.11 euro cents per kWh in constant 2010 currency).