Can we triple the annual rate of energy efficiency improvements by 2030?

By Tarak Mehta , president, Motion business area, ABB

During COP28, 130 countries signed a pledge to double the annual rate of energy efficiency improvements between now and 2030. For many this already sounds like a tall order. Then you may wonder why am I asking if we can triple it by 2030?

On May 21, 2024 the Financial Times published the following Op-Ed: Energy efficiency is the fastest, cheapest way to achieve net zero. The Energy Efficiency Movement (EEM) demonstrated that if four of the ten measures outlined in "The Case for Industrial Energy Efficiency" would be fully implemented it is possible to triple the progress in this timeline, and with a net financial gain. The EEM proposes four actions specific to industry:

1. Bringing connectivity to physical assets or integrating industrial assets into an Internet of Things network. This helps them run more efficiently, reduces electricity and gas consumption and maintenance costs and downtime.
2. Using high-efficiency motors: There are 300 million-plus industrial electric motor-driven systems operating today. If they were replaced with optimised, high-efficiency versions, worldwide electricity consumption could be cut by up to 10%.
3. Increase the adoption of variable speed drives: These adjust the power consumption and emissions to the load required.
4. Properly maintaining heat exchangers: Poor maintenance of industrial heat exchangers, which are used in building heating and air conditioning, refrigeration, data center cooling, could account for up to 2.5% of global carbon emissions, roughly the equivalent of the entire airline industry. These four actions alone could avoid 2.53 gigatons of CO2e emissions annually by 2030. Taken together, their effects would triple the annual rate of industrial energy efficiency improvements seen in recent years.

The EEM analysis indicates that the gross financial benefit of applying the four actions could amount to a total $4.1 trillion between now and 2030, at 2023 prices. Applying an industry-standard discount rate of 6%, this still equates to $1.23 trillion in present value. This could be achieved with an investment equal to just 1.6% of overall global gross fixed capital formation, or producers' investments, over the period.

Importantly, the EEM analysis only considers the benefits to industry up to the year 2030, whereas in practice many of the actions involved would continue to yield operational efficiencies for 20 years or more. And of course, if industry adopts further actions, then the benefits will be even greater. 

This is a game-changer. The path for industry to deliver on the agreed goal, and surpassing it, has never been so clear.  Furthermore, the return on investment is there for those who seize the opportunity. It’s a win-win for all but the time to act is now.

Finally, I was happy to see that their opinion was also supported by:

• Alliance for an Energy Efficient Economy (AEEE) (India) - Satish Kumar , President and Executive Director
• Association of Energy Engineers (US / Global) – Bill Kent, C.E.M. , Executive Director
• Alliance to Save Energy (US)  – Paula Glover , President
• Electrical Energy Conservation Professional Committee of China Electrotechnical Society (China) – Zhankui Wang, Honorary Chairman
• Mission Efficiency (Global) – Brian Dean , Head of Energy Efficiency SEforALL