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Tax on tax applies in Ireland in relation to Alcohol.  A duty is charged on alcoholic drinks and then VAT is applied on the total. It seems unfair that smaller electricity consumers should be effectively subsidizing larger consumers but that is probably a function of political negotiating power. Are all the exemptions larger consumers receive reflected in the average electricity prices shown in the graphs, or are those the average prices paid by consumers who don't get the exemptions, and thus is some of the price increase shown a function of the huge increase in the number of exempted consumers?

The bigger issue here is perhaps the question of why electricity is taxed so highly in Europe in the first place. Higher electricity prices mean that electricity's total share of the energy consumption mix is depressed when surely we want to encourage increased electricity consumption (as % of total energy consumption) as the renewable proportion of electricity production rises.

I'm thinking particularly of consumption related to home/office/production building heating which is prohibitively expensive using electricity (in Ireland) and which thus forces oil/gas/coal/turf based home heating systems often using inefficient open fire combustion.

Policymakers should be focusing not just on incentivising an increase in the renewable proportion of electricity production, but in incentivising the consumption of electricity relative to domestic oil, coal, and gas consumption and thus increasing the proportion of renewables in the overall energy consumption mix still further.

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by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Jul 4th, 2013 at 06:47:52 AM EST

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