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What is energy efficiency?

Improving energy efficiency means using less energy (such as electricity, heat and transport fuel) to produce the same output or service. Examples of measures to improve energy efficiency include: insulating a home so that it needs less heating to reach the same temperature; installing a motor that uses less electricity to perform the same role in a manufacturing plant; and inflating car tyres to the correct pressure to reduce drag when driving and cut fuel use.

Key points

The key points in this briefing are:

  • The Government will set out future energy efficiency policies and proposals in its Emissions Reduction Plan in early 2017.  Future energy efficiency policy choices will also arise from Brexit.

  • Energy efficiency improvements can reduce fuel poverty and greenhouse gas emissions and improve comfort, health, wellbeing, energy security and economic productivity.

  • Barriers to improvements include financial constraints, misaligned incentives, hassle, poor return on investment, lack of prominence and low confidence in results.

  • Regulatory, economic and behavioural policies could improve UK energy efficiency.

  • There is insufficient evidence to identify which types of policy are most effective.


POSTnotes are based on literature reviews and interviews with a range of stakeholders and are externally peer reviewed. POST would like to thank interviewees and peer reviewers for kindly giving up their time during the preparation of this briefing, including:

  • Christopher Botten – Better Buildings Partnership
  • Chris Vinson – British Gas
  • Patrick Brown – British Property Foundation
  • Peter Broad – Citizens Advice
  • Tim Farrell – Copenhagen Centre on Energy Efficiency
  • Department for Business, Energy and Industrial Strategy
  • Department for Communities and Local Government
  • Department for Transport
  • Ed Matthew – E3G
  • Richard Warren and Dipali Raniga – EEF
  • Jenny Holland – End Fuel Poverty Coalition
  • Steven Fawkes – Energy Pro Ltd
  • Jo Coleman – Energy Technologies Institute
  • Mike Foster – Energy Utilities Alliance
  • Jack Hunter – European Environmental Bureau
  • John Constable – Global Warming Policy Foundation
  • Brooke Flanagan – Greater London Authority
  • Jim Skea – Imperial College London
  • Michael Sozansky – Ofgem
  • Richard Howard – Policy Exchange
  • Ivo Wengraf – RAC Foundation
  • John Stewart – Residential Landlords Association
  • Denis Naberezhnykh – Transport Research Laboratory
  • Lisa Ryan – University College Dublin
  • Bob Lowe – UCL
  • Mark Gillott – University of Nottingham
  • AbuBakr Bahaj – University of Southampton
  • Jan Rosenow – University of Sussex

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