The Staggering Cost of a “Tiny” Gap

Motors rated above 375 kW currently account for an estimated 10.4% of global electricity demand—a figure projected to double by 2040. To understand the scale of the opportunity, ABB researchers analyzed a decade of data (2015–2025) covering more than 1,000 large synchronous motors and generators delivered worldwide from their Västerås manufacturing facility in Sweden.

The findings were eye-opening: a persistent efficiency gap exists between the equipment routinely specified by buyers and the maximum efficiency achievable with commercially available technology. Specifically, ABB found that a mere 0.2 percentage-point efficiency gap is costing global operators between $9.5 billion and $12 billion in unnecessary electricity costs over a standard 25-year asset life. Environmentally, this inefficiency generates between 60 million and 75 million tonnes of avoidable CO₂ emissions over the same period.

A Specification Problem, Not a Technology Problem

Crucially, the report emphasizes that closing this gap doesn’t require waiting for futuristic breakthroughs. The solution lies in ABB’s Top Industrial Efficiency (TIE) approach, which focuses on specifying the highest-efficiency motors using proven, commercially available technology.

While a standard large motor might operate at 98.5% efficiency, a TIE-optimized machine delivers 98.7% to 98.8% efficiency. Though a 0.2% gain sounds microscopic on paper, at the scale of global heavy industry, the impact is monumental. The typical payback period for these upgrades ranges from just a few months to three years.

David Bjerhag, Global Business Line Manager for High Speed Synchronous at ABB, highlighted the root cause of the issue:

“Industry has spent decades optimizing what happens inside a plant. Yet large motors and generators have rarely been part of that conversation, even though they run continuously for 25 years and sometimes even more, converting more energy to motion than almost anything else on site.”

Bjerhag added: “The gap between a standard machine and a TIE-optimized one is not technological. It is a specification gap. The companies closing it fastest are the ones where the engineer who selects the motor and the CFO or CSO responsible for energy performance are aligned around a single metric: total cost of ownership.”

Massive Energy Savings in an Era of AI and Data Centers

The timing of this report is critical. As the global energy transition accelerates, rising electricity demand from AI development and data centers is placing unprecedented pressure on power grids. Maximizing the utility of every kilowatt-hour is no longer just an environmental goal; it is a matter of energy security.

If the 0.2 percentage-point efficiency improvement were applied across the global installed base of similar industrial motors, it would save 4 to 6 TWh of electricity per year—enough to power roughly 750,000 to 1 million OECD households. Over a 25-year motor lifetime, those savings skyrocket to 100 to 150 TWh, equivalent to powering the entire United Kingdom for five months.

The Path Forward: Rethinking Procurement

To turn this potential into reality, ABB’s report calls for a fundamental shift in how heavy industry procures equipment. The traditional focus on upfront capital costs must be replaced by a lifecycle perspective.

The report urges industry leaders to:

• Move beyond upfront costs and embed energy efficiency directly into procurement decisions.
• Specify minimum performance levels and request optimized designs.
• Use Total Cost of Ownership (TCO) as the primary decision metric.
• Foster stronger collaboration between manufacturers, OEMs, and EPCs to ensure high-efficiency systems are specified early in the project lifecycle.

Looking Ahead

With the technology to save billions of dollars and millions of tons of carbon already readily available, the business case for closing the industrial efficiency gap is undeniable. As ABB’s report makes clear, the only thing standing in the way of a more sustainable and cost-effective industrial future is the specification.