The Fiscal Background – Energy Prices in Europe
The prices of gas and electicity in the principal European nations are shown in the graphs published by BEIS below.
UK industrial consumers suffer the largest electricity prices in Europe – apart from those in Italy.
UK industrial consumers enjoy the lowest gas prices in Europe – apart from those in Belgium.
The lighter portion at the right of the prices shown above gives the element of taxes and environmental levies included in the prices in each country. The electricity price in the UK is greatly increased by a high proportion of taxes and levies. In contrast, the UK taxes and levies on gas are amongst the lowest.
The Fiscal Background in the UK hinders decarbonisation of heating
If the Government is serious about reducing carbon emissions from heating in the UK it is clear that the fiscal background in the UK must change: burning of gas for heating releases carbon emissions (and also releases NO2 emissions which contribute to health hazards from respiratory diseases). The heat transferred into buildings by heat pumps release no on-site CO2 (and zero on-site NO2).
Sweden is encouraging the decarbonisation of heating
Sweden adopts the opposite approach to the UK with almost no taxes on electricity and substantial taxes on burning gas. For this reason nearly all new heating installations in Sweden rely on heat pumps. Nearly all new and replacement heating installations in the UK are based on burning gas.
The price of electricity in the UK is over 12 pence a kWh. The price of gas is less than 3 pence a kWh.
The price of electricity in the Sweden is under 6 pence a kWh. The price of gas is 3.5 pence a kWh.
The sales of heat pumps in Sweden are 35 times higher than in the UK per head of population.