Energy Efficiency: The First Fuel of the Energy Transition

This article was written by Erich Labuda, Division President, ABB Motion Services

Across Europe, we face a monumental challenge — cutting carbon emissions to preserve our planet’s natural resources and ensure long-term energy security for citizens and industries. This task is made even more urgent by both segments showing growing demand, while the clock is ticking for all of us to limit global temperature rises to 1.5°C above pre-industrial levels. But a successful energy transition isn’t just about electrifying and making the switch or increasing output. 

Energy efficiency — using energy smartly to achieve the same results — is a critical but often overlooked piece of this puzzle. While optimizing the energy mix and expanding renewable supply is essential, every kilowatt-hour saved is one that doesn’t need to be generated. So, analyzing energy consumption, seizing potential and investing in efficiency improvements offer a faster, less expensive path forward than building large-scale energy infrastructure.

At ABB, we firmly believe that the energy transition needs to reduce demand as well as meet it. By optimizing how energy is used — particularly in electric motors, which account for over 45% of global electricity consumption — we can reduce costs, improve energy security, and boost competitiveness. If we were to adopt today’s most energy-efficient motor systems at scale, we could reduce global electricity consumption by up to 10%, equivalent to the amount of electricity used by 300 million households.^[1]

Now More Than Ever

Europe is highly dependent on energy imports. Around 60% of its energy still comes from external sources, which exposes it to global energy market volatility. Electrification could reduce import dependency to just 13% by 2050, but it’s not enough on its own.

The transition is slowed down by infrastructure bottlenecks like permitting delays, grid limitations, and intermittent generation availability. We cannot only expand supply; we need to make better use of the energy we already have. Reducing demand by upgrading to more efficient solutions can significantly reduce the strain on our power infrastructure.

Affordability and Competitiveness

A sharp spike in European energy prices to record levels at the end of 2022 is yet to ease. Regional players now face increased pressure to lower operational costs while maintaining productivity in order to compete on the global stage. In Europe, regulatory demands are ramping up — more so than in many other regions. For example, the EU’s Ecodesign for Sustainable Products Regulation (ESPR) now sets stricter energy performance standards for industrial motors and drives, reinforcing the need to improve efficiency.

For some in the industry, the energy transition may still feel like an unwarranted upfront cost without an immediate payoff. But by cutting electricity consumption, minimizing waste, and extending equipment lifespan, companies can lower operational costs. And with payback periods as short as seven months in some applications, businesses don’t have to wait to benefit from cost reductions and lasting financial gains.

Easy Upgrades

The International Energy Agency (IEA) has named energy efficiency the ‘First Fuel’ — it is the easiest and most obvious first step towards the energy transition. According to IEA, doubling the rate of energy efficiency improvements this decade is critical to keeping global warming within the 1.5°C target, and this must come hand in hand with renewable energy expansion.

One of the biggest myths surrounding decarbonization is that we still need to wait on new technological breakthroughs to achieve net zero. The reality is that energy-efficient solutions already exist but remain vastly underutilized. For example, of the 300 million plus industrial electric motors in operation, fewer than one in four are equipped with a variable speed drive (VSD). A VSD adjusts a motor’s speed to match actual demand — much like gently pressing the accelerator in a car — improving energy efficiency by approximately 50% as the motor doesn’t run more than it needs to. If just a fraction of the world’s motors were upgraded to more efficient models and paired with VSDs, Europe could unlock massive energy savings — without generating a single extra megawatt.

What’s Stopping Us?

The primary barrier for industry is knowing where to start. Research from ABB reveals that although 97% of industry leaders are eager to invest in energy efficiency, only four in ten understand how to do it effectively. Common challenges include upfront costs, a lack of skilled workers for managing energy-efficient solutions, and regulatory complexity.

No single company, government, or industry can achieve the energy transition alone. That’s why initiatives like the Energy Efficiency Movement, which ABB co-founded, are so important. In this context, the partnership between the Energy Efficiency Movement and the Association of Energy Engineers (AEE), established last year, aims to accelerate the adoption of energy efficiency practices by fostering knowledge-sharing and upskilling the workforce. At the same time, they allow regulators to be equipped with industry insights to shape policies that accelerate the adoption of energy-efficient technologies.

ABB is also working closely with customers to identify and implement measures through tailored energy efficiency appraisals. These assessments help businesses pinpoint opportunities for optimization, quantify potential savings, and take action with minimal disruption to operations.

One success story comes from Aurubis, Europe’s largest copper producer. By replacing over 450 motors at the end of their life-cycle with high-efficiency IE4 and IE5 motors, many paired with ABB drives, the company is set to cut energy consumption by 28% (compared to the plant’s legacy motors), saving 25 GWh annually — enough to power 6,250 European homes. The upgrade will also reduce carbon emissions by 12,000 tons per year — the equivalent of taking approximately 2,600 passenger cars off the road for that time — while increasing process flexibility and performance. However, what’s really impressive is that the project’s energy savings ensure a 3.5-year payback period, making it both a sustainable and financially smart investment. 

The Road Ahead

Policymakers, industry leaders, and businesses must work together to accelerate the adoption of energy-efficient technologies. At ABB, we are committed to driving this shift and creating a leaner, cleaner future — not only across our operations but by helping our customers engineer their manufacturing to outrun inefficiency and waste. 

In a world where industrial demand for electricity is set to double by 2040, improving energy efficiency is vital. The technologies exist, the benefits are clear, and the time to act is now.

The next step? Understand your savings potential and make energy efficiency your first fuel.

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[1] According to the International Energy Agency, 2011: https://www.iea.org/reports/energy-efficiency-policy-opportunities-for-electric-motor-driven-systems