In a report on the development of heat pumps published on Wednesday 17 December, the think tank Ember argues that, to exploit this heating system’s full potential, electricity pricing needs a strategic rethink in all Member States.
The competitiveness of heat pumps is being undermined by high energy prices relative to gas bills in most EU countries. Ember points out that “non-energy” costs can account for up to three quarters of the consumer price of electricity.
Within the EU, the ratio between the price of electricity and that of gas/coal varies from one Member State to another, ranging from 1.4 to 4.6. The Netherlands, where the ratio is lowest (1.4), has become one of Europe’s leading markets for heat pumps, with 15 heat pumps sold per 1,000 homes in 2024.
“Removing outdated policy costs and ensuring that electricity prices are competitive with gas can help transform consumer choices, accelerate the shift away from costly fuel imports and invigorate Europe’s domestic heat pump industry”, sums up the report’s author, Tom Harrison, electricity transition analyst at Ember.
According to the think tank, the European Commission’s upcoming Electrification Action Plan offers Member States an opportunity to explore possibilities for reducing electricity levies. It also calls for completing the Energy Taxation Directive revision.
To see the report: https://aeur.eu/f/k4h (Original version in French by Pauline Denys)