In the 2000s, Italy liberalized its electricity and natural gas markets, and in 2016, it separated retail activities from other activities within these markets. Such differentiation is unique within Europe. Italy is an ideal case for investigating which operational factors may increase profit margins among electricity and gas retailers. The present analysis analyzes 120 retail operators in the Italian electricity and gas markets in 2020, using two models to assess their cost and commercial efficiencies in achieving high direct margin (defined as the difference between revenues and raw materials cost). The findings show a positive effect of size on efficiency.
A robust benchmarking of direct margin in Italy's energy retail markets
Guerrini, Andrea;
2024-01-01
Abstract
In the 2000s, Italy liberalized its electricity and natural gas markets, and in 2016, it separated retail activities from other activities within these markets. Such differentiation is unique within Europe. Italy is an ideal case for investigating which operational factors may increase profit margins among electricity and gas retailers. The present analysis analyzes 120 retail operators in the Italian electricity and gas markets in 2020, using two models to assess their cost and commercial efficiencies in achieving high direct margin (defined as the difference between revenues and raw materials cost). The findings show a positive effect of size on efficiency.
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