Efficiency:

Lets start off with some facts:

* You need 42% more flow derived from the difference in AFR at Lambda=1.

* A car straight converted to E85 without any other modifications will use 30 to a little over 35% more fuel. Since 42% bigger injectors are actually needed, but the fuel consumption is not 42% higher, you can see that the efficiency goes up.

* If a car tuned for gasoline use and high power is converted straight to E85, it will use more E85 at part throttle and less E85 at WOT than a car tuned for running only on E85.

* A car tuned only for E85 use and high power will use less E85 at part throttle and more E85 at WOT than the car that was initially tuned for gas and then converted to E85.

* An efficient engine can take advantage of a good tune and only use ~20-25% more fuel when running on E85 than on gasoline. That doesn't just have to do with energy content, but also the other properties of E85, like burn rate (which can use a more efficient ignition setting), octane number (can also use a more efficient ignition setting), and cooling properties (ultimately leads to a cooler combustion chamber and the possibility of a more efficient ignition setting).

Then you ask why?

Let's start with this...

Energy content by weight:
Gasoline: 46.4 MJ/Kg
E85: 33.1 MJ/Kg

Weight per volume:
Gasoline: 0.7329 Kg/L
E85: 0.7806 Kg/L

Energy content by volume:
Gasoline: 34 MJ/L
E85: 25.84 MJ/L

Some of the numbers here will be recognised from the previous statement:

You need 42% more volume of E85 to reach Lambda=1.

At Lambda=1 on E85, the energy content is 7.92% higher than on gasoline.

That is why a car that is converted straight to E85 doesn't consume 42% more fuel. You get more energy from E85 at the same Lambda. The cooling properties and slightly different burn rate also adds a positive effect on the fuel consumption here.

If you then tune the car to use all the properties of E85, it will be a lot more efficient and use even less fuel that a car converted straight to E85 (aka: a car tuned for gasoline, but equipped with bigger injectors to run E85).

When it comes to power:

This is basically just repeating what I said previously in the same post, but to clarify I will say it again.

On E85 you can use much richer mixtures when aiming for very high power. One of the advantages of E85 is the cooling properties since a lot more is injected. Because of that, you can run a much more advanced ignition setting.

Since the octane number is higher, you can also run a much more advanced ignition setting.

And the car will also develop more power because E85 will contain more energy at the same Lambda.