The challenges of climate change and energy security, along with problems of fuel poverty and energy justice bring imperatives to create transitions in energy demand. Academic research and theory have begun to highlight the ways that government policies, strategies, and processes across wide-ranging areas of policy, from health to work and the economy, shape everyday practices with significant implications for energy demand. This brings focus on the role of governance in shaping energy demand far beyond what might traditionally be characterised as ‘energy’ policy.

Policy and decision makers, economists and engineers often have to choose between new-energy-generation installations for producing additional energy or reducing the energy consumption through energy efficiency measures. To enhance the decision-making process of the concerned parties with evidence-based comprehensive tools, we perform a literature review on the costs and benefits associated with energy efficiency and evaluate these costs and benefits against a new proposed framework.