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Rethinking European energy taxation to incentivise consumer demand response participation. / Voulis, Nina; van Etten, Max; Chappin, Emile; Warnier, Martijn; Brazier, Frances.

In: Energy Policy, Vol. 124, 01.2019, p. 156-168.

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@article{036bd27a0a8e41dfab02f6bdfd7eb5fb,
title = "Rethinking European energy taxation to incentivise consumer demand response participation",
abstract = "The European Union considers demand response to be an integral part of its future energy vision, in particular as a supporting mechanism for renewable resource integration. To achieve high demand response participation, the European Union recognises the need for adequate financial incentives for all consumers, especially for residential and service sector consumers. However, the European Energy Tax Directive, which regulates energy taxation in the European Union, is currently not in alignment with this vision, as it does not provide any financial incentives for demand response participation. This paper explores the potential of energy taxes to provide such incentives. First, through an analysis of the current energy taxation and demand response literature. Second, by quantifying the difference in financial incentives between two tax designs (per-unit and ad valorem taxes) in a simulation case study of consumers heat pumps in the Netherlands. Results show that financial incentives are 3.5 times higher for the ad valorem tax than for the per-unit tax. The paper concludes with recommendations for policy makers for the design of energy taxes that provide residential and service sector consumers with adequate financial incentives for demand response participation.",
keywords = "Demand response, EU energy policy, Energy taxes, Financial incentives, Residential, Service sector",
author = "Nina Voulis and {van Etten}, Max and Emile Chappin and Martijn Warnier and Frances Brazier",
year = "2019",
month = jan,
doi = "10.1016/j.enpol.2018.09.018",
language = "English",
volume = "124",
pages = "156--168",
journal = "Energy Policy",
issn = "0301-4215",
publisher = "Elsevier",

}

RIS

TY - JOUR

T1 - Rethinking European energy taxation to incentivise consumer demand response participation

AU - Voulis, Nina

AU - van Etten, Max

AU - Chappin, Emile

AU - Warnier, Martijn

AU - Brazier, Frances

PY - 2019/1

Y1 - 2019/1

N2 - The European Union considers demand response to be an integral part of its future energy vision, in particular as a supporting mechanism for renewable resource integration. To achieve high demand response participation, the European Union recognises the need for adequate financial incentives for all consumers, especially for residential and service sector consumers. However, the European Energy Tax Directive, which regulates energy taxation in the European Union, is currently not in alignment with this vision, as it does not provide any financial incentives for demand response participation. This paper explores the potential of energy taxes to provide such incentives. First, through an analysis of the current energy taxation and demand response literature. Second, by quantifying the difference in financial incentives between two tax designs (per-unit and ad valorem taxes) in a simulation case study of consumers heat pumps in the Netherlands. Results show that financial incentives are 3.5 times higher for the ad valorem tax than for the per-unit tax. The paper concludes with recommendations for policy makers for the design of energy taxes that provide residential and service sector consumers with adequate financial incentives for demand response participation.

AB - The European Union considers demand response to be an integral part of its future energy vision, in particular as a supporting mechanism for renewable resource integration. To achieve high demand response participation, the European Union recognises the need for adequate financial incentives for all consumers, especially for residential and service sector consumers. However, the European Energy Tax Directive, which regulates energy taxation in the European Union, is currently not in alignment with this vision, as it does not provide any financial incentives for demand response participation. This paper explores the potential of energy taxes to provide such incentives. First, through an analysis of the current energy taxation and demand response literature. Second, by quantifying the difference in financial incentives between two tax designs (per-unit and ad valorem taxes) in a simulation case study of consumers heat pumps in the Netherlands. Results show that financial incentives are 3.5 times higher for the ad valorem tax than for the per-unit tax. The paper concludes with recommendations for policy makers for the design of energy taxes that provide residential and service sector consumers with adequate financial incentives for demand response participation.

KW - Demand response

KW - EU energy policy

KW - Energy taxes

KW - Financial incentives

KW - Residential

KW - Service sector

UR - http://www.scopus.com/inward/record.url?scp=85054828305&partnerID=8YFLogxK

U2 - 10.1016/j.enpol.2018.09.018

DO - 10.1016/j.enpol.2018.09.018

M3 - Article

VL - 124

SP - 156

EP - 168

JO - Energy Policy

JF - Energy Policy

SN - 0301-4215

ER -

ID: 47063859