A successful energy transition requires CO2-oriented energy price reform – KfW

Germany’s energy transition and integration of renewable power sources into the heating and transport sectors is held back by the current system of taxes and surcharges, Holger Höfling and Jasmin Milke write in a research paper of Germany’s development bank KfW. There are big discrepancies between household power prices (very high) and power costs for industrial users (relatively low in a European comparison) as well as between taxes on electricity (over 23 ct/kWh) and light heating oil (1.6 ct/kWh), the paper highlights. This system has a “steering function that contradicts reaching the climate targets” and prevents necessary change, for ex…