Energy efficiency in Britain: creating profitable alternatives

Recent actions by the Office of Electricity Regulation (OFFER) indicate that it is beginning to see energy efficiency as a valuable resource option, and is examining the best ways to allow for energy efficiency while maintaining corporate profitability. This paper analyses the complex economic issues surrounding the involvement of the electricity industry in energy efficiency programmes, and proposes policy options that will jointly benefit the industry, its customers and society. The authors conclude that OFFER can play an instrumental role by removing market barriers to energy efficiency through the institution of changes to the pricing formula and by providing regulatory guidance to the PESs.