Germany’s groundbreaking “Energiewende,” or energy transition, sets out aggressive climate targets, including a 40 percent reduction in greenhouse gas emissions by 2020 and a phase-out of nuclear power by 2022. Meeting these goals will require skillful orchestration of laws, regulations, programs, market mechanisms, and financial incentives. In a presentation before the German Institute for Economic Research (Deutsches Institut für Wirtschaftsforschung–DIW), Andreas Jahn explores the principle of “Efficiency First,” an approach that leverages energy efficiency as a powerful tool to help coordinate the changes required for Germany’s shift to a sustainable power sector. International experience shows that energy efficiency delivers multiple benefits to the energy system, consumers, and the economy—often at lower cost than supply-side resources. Yet even with Germany’s National Action Plan on Energy Efficiency (NAPE), progress is slow, and efficiency is still not viewed as a valuable system resource. Achieving the full potential of efficiency will require a high-level commitment to systematically identifying the multiple decision points where efficiency is overlooked or undervalued, and putting in place concrete policies and measures to ensure that investments happen wherever efficiency is more cost-effective or valuable than equivalent supply-side resources—in other words, “Efficiency First.” With thoughtful implementation, efficiency increases energy supply security, reduces harmful greenhouse gas emissions, and even creates sustainable jobs and growth.