Energy efficiency is the best way to cut costs and reduce emissions now

Tarak Mehta, President, Motion Business Area at ABB

With businesses facing unprecedented pressure from the cost of energy and the urgency of climate change, a report from the Energy Efficiency Movement shows that improving industrial energy efficiency is the most effective way for a business to cut energy costs and greenhouse gas emissions. The Energy Efficiency Movement is a global forum of around 200 firms sharing ideas, best practices and commitments to create a more energy-efficient world.

Why is energy efficiency crucial for industrialists?

The “Industrial energy efficiency playbook” includes 10 actions that a business can take to improve its energy efficiency, reduce energy costs and lower emissions. It focuses on widely available tech solutions that will deliver rapid results and ROI – and can be deployed at scale.

Industry is the world’s largest consumer of electricity, natural gas and coal, according to the IEA, accounting for 42% of total electricity demand, equal to more than 34 exajoules of energy. The iron, steel, chemical and petrochemical industries are the largest consumers of energy among the top-five energy-consuming countries – China, US, India, Russia and Japan.

This energy consumption carries high costs in the current inflationary environment. It was also responsible for nine gigatons of CO2, equal to 45% of total direct emissions from end-use sectors in 2021, according to the IEA. Firms interviewed include ABB, Alfa Laval, DHL Group, the IEA, Microsoft and ETH Zürich, the Swiss federal institute of technology.

“Energy efficiency is a win-win for companies and the climate,” said Kevin Lane, Senior Program Manager, Energy Efficiency, with the International Energy Agency (IEA).

“While industry needs to address climate change on all fronts – such as increasing use of renewable energy, investing in low-carbon processes and developing circular business models – energy efficiency stands out as the business-focused opportunity with the best near-term prospects for emission reductions. The 10 actions in this report are cost-effective resources, and can be employed at scale rapidly to help firms convert climate ambition into action.”

What were the suggestions to boost energy efficiency?

The recommendations range from carrying out energy audits to right-sizing industrial machines that are often too big for the job at hand, which wastes energy. Moving data from on-site servers and into the cloud could help save around 90% of the energy consumed by IT systems. Speeding up the transition from fossil fuels, by electrifying industrial fleets, switching gas boilers to heat pumps or using well-maintained heat exchangers also offer efficiencies.

Further actions recommended involve installing sensors and real-time digital energy monitoring to reveal the presence of so-called “ghost assets” that use power when on stand-by, unlike a digital twin that can simulate efficiency actions without interrupting production. Using smart building solutions to control power systems, lighting, blinds and heating, ventilation and air conditioning (HVAC) will also save energy in industrial facilities.

Others include installing variable speed drives which can improve the energy efficiency of a motor-driven system by up to 30%, yielding immediate cost and emissions benefits. If the more than 300 million industrial electric motor-driven systems were replaced with optimized, high-efficiency motors, global electricity consumption could be reduced by up to 10%.

“There are energy efficiency solutions available that can help industry mitigate climate change and drive down energy costs, without compromising performance and productivity. With recent technology advances in energy efficiency, the improvement potential in industry is significant and readily available,” said Tarak Mehta, President, Motion Business Area at ABB.

“So, rather than turning the lights off and halting production to save money, this report explains practical steps execs can take to reduce energy use while maintaining operations.”