Aligning energy taxes and levies as prerequisite for energy system integration

A level playing field between different energy carriers and sectors is key to energy system integration. It is a prerequisite that energy can flow through the ‘whole system’ (power-gas-heat-transport-etc.) in an efficient way; i.e. based on market signals and without undue barriers or disturbance.

This is the noble objective. The ‘reality check’ of energy taxes and levies applied in Austria to different energy carriers shows a pretty different picture (see figure) and makes clear that there is quite some way to go.

What is needed in my view?
– Step 1: aligning the level of levies and taxes applied to different energy carriers
– Step 2: putting a price tag on carbon that reflects the actual environmental costs of the different energy carriers in their prices