Almost all electricity in the UK is generated by rotating electrical generators, and approximately half of it is used to drive electrical motors. This means that efficiency improvements to electrical machines can have a very large impact on energy consumption. The key challenges to increased efficiency in systems driven by electrical machines lie in three areas: to extend the application of variable-speed electric drives into new areas through reduction of power electronic and control costs; to integrate the drive and the driven load to maximise system efficiency; and to increase the efficiency of the electrical drive itself. In the short to medium term, efficiency gains within electrical machines will result from the development of new materials and construction techniques. Approximately a quarter of new electrical machines are driven by variable-speed drives. These are a less mature product than electrical machines and should see larger efficiency gains over the next 50 years. Advances will occur, with new types of power electronic devices that reduce switching and conduction loss. With variable-speed drives, there is complete freedom to vary the speed of the driven load. Replacing fixed-speed machines with variable-speed drives for a high proportion of industrial loads could mean a 15-30% energy saving. This could save the UK 15 billion kWh of electricity per year which, when combined with motor and drive efficiency gains, would amount to a total annual saving of 24 billion kWh. (C) 2008 Queen's Printer and Controller of HMSO. Published by Elsevier Ltd. All rights reserved.