The UK is failing to harness the huge potential for saving electricity. In this policy insight we demonstrate how negawatt measures, like those adopted in the US, can reduce the need to build new power stations and save consumers and businesses £2.4 billion by 2025. This strategy could help the UK to deal inexpensively with the coming coal phase out.

We propose two changes to the electricity market:

• A new negawatts feed-in tariff, paid to companies that provide energy saving measures, on the basis of the electricity consumption they avoid.
• Opening up the capacity market so that initiatives that reduce energy demand or shift it away from peak times can compete with electricity suppliers