Originally Posted by Stu @ M Developments

Lambda 1 has nothing to do with fuel economy, lambda 1 is the chemically correct fuel ratio for the most complete burn with least emissions and byproducts produced.

This chemically correct ratio is 14.7:1 AFR and is termed as lambda 1.0 Its certainly good for economy, but 15.2 is better, as we get leaner then this most engines will start to missfire and dump precious energy out of the engine on the exhaust stroke, wasting fuel anyway. The higher the compression the leaner you can burn

Most power is produced via energy release from the fuel at around 12.6 but this burn is hot so we generally run richer for safety although it DOES cost power to richen from this area.

Hope This helps.