Energy efficiency reduces the amount of energy that must be purchased or produced to meet customer’s needs. As most markets for energy products are characterized by an increasing supply curve, energy prices should decline, if demand for energy falls. For example, savings in electricity can reduce electricity prices, as fuel consumption for electricity generation, investment costs for power plants and power grid as well as greenhouse gas emissions decrease. There is widespread evidence both from empirical data and from modelling studies for a direct relationship between demand and price.

However, besides the reduction of overall energy demand, energy prices are determined by several factors such as energy mix, quantities of domestic energy supply, substitutability and trading conditions. Energy efficiency measures impact the consumption of energy in one fuel more than others, depending on the sector affected or on price differences across fuels. With regard to import dependency of most European countries, energy savings are likely to induce downward pressure on prices of fossil energy fuels. Nevertheless, as energy fuels are globally traded commodities, it is unlikely that global energy prices will change significantly.

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