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Understanding energy efficiency: how to maximise impact through knowledge

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Industrial businesses can be both profitable and sustainable – these are not mutually exclusive. But many are yet to make the first steps. Tarak Mehta, president of ABB’s Motion business, explains why now is the time for education and action around energy efficiency.

  • Many business leaders worry that high energy costs could delay meeting their sustainability and emissions reduction targets by up to five years.
  • Data shows a lack of awareness among decision-makers regarding available technologies to help them save money as well as meet their environmental targets.  
  • The Energy Efficiency Movement gives companies a chance to collaborate, share knowledge and become energy-efficient thought leaders in their respective sectors. 

The road to Net Zero and greater energy efficiency is paved with challenges. ABB’s March 2023 Energy Insights report surveyed 2,300 business leaders around the world. It found that costs are the biggest concern for organizations (33%); the fallout from the pandemic came in second (27%), followed by the energy crisis (28%).  

Energy costs are proving an obstacle to change. Nearly three in five business leaders (58%) worry that high energy costs could delay meeting their sustainability and emissions reduction targets by up to five years.   

But there is arguably a larger issue at play here: many businesses are simply unaware of what can be done right now to tackle these challenges.  

Technologies are available to help achieve net zero  

Achieving net zero will require a globally coordinated effort like nothing we’ve seen before. What’s more, all these seismic changes need to be made across industries with a fast-approaching deadline. But energy efficiency will make a major difference.  

If businesses can view investing in greater energy efficiency now as a money saver down the line, they will worry less about the costs incurred today. The more decision-makers know about the benefits – both to their bottom line and the planet – the more inclined they’ll be to make the investment now.   

Electric motors are a fantastic starting point for improving industrial energy efficiency. The reason is that industrial electric motors and the systems they drive consume over 40% of the world’s electricity. Yet many motors, while still in good working condition, are older, less efficient models. This results in unnecessarily high operating expenditure (OpEx) for businesses – this becomes increasingly important with the current high level of energy prices.   

Motor technology has developed at a considerable pace, with the current models outstripping even those manufactured just five to 10 years ago in terms of efficiency. However, many businesses are unaware of these developments and are settling for less. Yet, if every business made the switch to high-efficiency motors and drives, we could reduce global electricity consumption by 10%  

On the other hand, some companies are aware of the technology available, but worry that implementing it would result in considerable downtime. This is not true and today’s upgrade process is far more streamlined than before – modern motors are designed to simply ‘drop in’ as replacements, keeping any downtime to a minimum.   

For additional savings, variable speed drives (VSDs) can be paired with motors. They adjust the speed of the motor to the exact requirements of the process, enabling better control and efficiency. For example, motors powering pumps and fans can reduce their power consumption by up to 25% when paired with a VSD.  

Unfortunately, some decision-makers are still unaware of the difference that VSDs can make. ABB’s own estimates suggest that around 50% of the world’s industrial motors would benefit from being paired with a drive. Yet currently that figure stands at just 23%, even though the typical payback period is often measured in months rather than years. This highlights the importance of knowledge sharing so that businesses can adopt innovative technology to become more sustainable and cut costs.  

Collaboration is key  

Competing businesses are often unwilling to exchange information which might benefit one another and society as a whole. But how exactly do we share knowledge across industry? In 2021, we created the Energy Efficiency Movement to provide a forum.  

The Movement aims to provide businesses with the knowledge and case studies that will help them make the changes necessary to realize Net Zero. Since its launch two years ago, it has amassed close to 350 members, including several of the world’s most recognizable corporations such as Accenture, Danfoss, DHL (ETR:DPW), Honeywell (NASDAQ:HON), Microsoft (NASDAQ:MSFT) and Tata Steel (LSE:TTST).  

To join, a business must make a clear commitment to improving its energy efficiency and sharing information. Sometimes they will even be sharing knowledge with direct competitors, out of a common commitment to sustainability.   

Because this growing Movement incorporates businesses from various sectors, there is great scope for them to learn and then build on that knowledge to become thought leaders in their own industry. Others will then see that implementing these changes is perfectly achievable and financially viable, further building the momentum for change.  

Information, innovation, action  

If we are to achieve a net zero global economy, we need to demonstrate to decision-makers that increasing their energy efficiency is a realistic prospect and that they can make tangible and affordable steps towards it today. Profit and sustainability are not mutually exclusive; businesses can save money by going green. Put simply, we have a duty to educate as many business leaders and decision-makers as possible.  

The opinions of guest authors are their own and do not necessarily represent those of SG Voice.

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