By 2050, global energy usage is projected to increase by almost 50% compared to 2020. This includes an increase in energy consumption in the industrial sector.¹ At the time of writing, in the final quarter of 2022, the cost of energy – oil, gas and electricity – is particularly high, which has led to significant extra energy costs for companies, and prices are expected to increase.
Global players, including businesses and governments, are looking for ways to achieve and enable sustainable growth. Among the key findings of an Energy Efficiency survey commissioned by ABB in 2022 was that 54 percent of the companies were already investing in energy efficiency measures, and 40 percent planned to make energy efficiency improvements that year.
Although energy demand is predicted to grow, new energy efficiency standards and regulations are having a positive effect on global energy consumption. For example, in an IEA analysis of nine large countries and regions, including China, the European Union and the United States, it was found that efficiency standards had successfully helped to save about 1,500 TWh of electricity in 2018.² This was equivalent to the total electricity generated in 2018 in those countries by wind and solar facilities.
The aforementioned rising energy prices were one of the main drivers for this focus on energy efficiency. With an average of 23 percent of annual operating costs attributable to energy usage, ninety percent of respondents indicated that higher energy costs are a threat to profitability. In addition to the cost element, new regulations mandate improved energy efficiency and a reduction in emissions. In industries and regions which have a large and aging installed base there are clearly good opportunities to improve energy efficiency by modernizing the existing electric motor systems. This is the case in the US, for example, where over 60% of industrial motors are over 10 years old.³ Reducing energy consumption benefits companies in terms of both profitability and sustainability.
At the moment, about 70 percent of the electricity consumed by industry is used by electrical motors and there are over 300 million industrial motor-driven systems in operation.⁴ Therefore, improving the efficiency of electrical motor systems can play a significant role in helping the world reduce CO2 emissions towards “net-zero” and reduce waste. The measures needed to do this are practical, realistic and effective, and they can reduce energy costs for industry, too. In fact, it’s estimated that if all 300 million motor systems were replaced with higher efficiency equipment, we could reduce global electricity consumption by up to 10%.⁵
Thanks to the Internet of Things and digitalization, new types of digital services now offer even more opportunities to reduce energy consumption. With remote connections and services, the status of equipment and even whole processes can be checked at any time, from anywhere, enabling better decisions about energy efficiency. 51 percent of survey respondents are planning to use energy efficiency appraisals to improve their operations.
In addition, new flexible business models are emerging that offer the potential for continuous energy optimization services. For example, a trusted partner, like ABB, can share the responsibility for gradually improving the energy efficiency of electrical motor driven equipment over time, while maximizing the value customers get from their assets.