Energy savings can be considered as "an energy source in its own right" in line with the European Commission (EC) strategy for a resilient energy union, the report states.
In 2015, the EU took a new approach to energy policy with the creation of the 'Energy Union'. The union was a roadmap established by the EC that aims to make Europe's energy system affordable whilst meeting the requirements for a climate policy focused around reducing greenhouse gas emissions.
A target agreed in Paris in December by over 190 nations of keeping global temperature rises to 2 degrees Celsius from pre-industrial levels with efforts to keep this to 1.5 has further increased the need to maximise energy efficiency.
With Europe likely to miss an intermediary target of 20 per cent energy savings by 2020, the report recommends scaling up private investments and introducing a guarantee fund to remove the perceived risk by investors.
If Europe manages to increase its energy efficiency by 40 per cent by 2030, the sum of energy savings and renewables would overtake the sum of energy from imported fossil fuels altogether, the report states. This would also allow member states not to increase their dependency on fossil fuel imports, thus benefiting their energy security.
Lord Stern of Brentford, who has long campaigned over climate issues, said the report represented "the growth story of the future".
"While we have increased our level of ambition, we can do much more," he said.
"The technologies and techniques exist, but the political will, commitment and ability to act is sometimes weak. Strong examples and clear demonstrations of ways forward can galvanise action.
"The report showcases the benefits of a more ambitious energy saving target for 2030. Energy efficiency is not only a cost-effective means to mitigate climate change, but improved energy efficiency combined with stringent renewable energy targets reduces Europe's energy dependency."
While the UK government has received criticism for cutting renewable energy policies that will make it difficult to meet climate change targets, the Solar Trade Association (STA) recently announced that the country now has more than a million 'solar homes' that get electricity or hot water from the sun.
Almost 800,000 domestic solar power schemes registered under the 'feed in tariff' subsidy scheme by January, figures from the Department of Energy and Climate Change show.
The STA estimates there are now 775,000 square metres of solar thermal hot water panels in operation in the UK, equating to around 258,000 homes.
New government figures have also shown that the amount of solar power overall in the UK has risen 66 per cent in a year to more than nine gigawatts of capacity across more than 860,000 installations by January of this year.
Around half (51 per cent) of the capacity is in large-scale solar farms, while just over a quarter (26 per cent) is on homes, the data shows.
