Manufacturers are always under pressure to find new ways to increase profitability. This isn’t a surprise – it is a business after all.

By nature, they turn to their engineering staff for factory solutions, who have a few common figurative levers to pull. Increasing throughput, for example, often by increasing production capacity and creating lean, agile workflows.

Another level: decreasing costs. Not only materials and resources, but also in machinery operations. And this is where a recent report from ABB, the automation and electrification giant, called Industrial Efficiency Gap: How a 0.2% Decision Scales to Billions, made some surprising conclusions.

See, energy supplies have become unpredictable, and several other trends – such as grid investments and electricity competition – mean that many plants are paying much more per Watt-hour than they were last year.

Johan Karlsson, VP of strategy and business development, synchronous machines, ABBAccording to ABB, and Johan Karlsson, VP of strategy and business development, synchronous machines, too many manufacturers were not considering the long-term operating costs and when initially specifying a new electric motor, and instead prioritized acquisition cost.

Nearly every industrial machine rotates, spins or oscillates, so leaving even marginal efficiency gains on the table could represent millions of dollars in energy expenses.

Large industrial motors (above 375 kW) are responsible for an estimated 10% of global electricity consumption today. Where are these motors being used? Why are they high-volume consumers of electrical energy?

Motors rated above 375 kW are used across oil and gas, metals, chemicals, utilities and pulp and paper, among other industries, and demand for them is projected to double by 2040.

What makes them such heavy consumers is their scale and how continuously they operate. Large motors are a small fraction of the total motor population, but collectively they convert between 3,000 and 3,900 TWh of electricity every year.

The use phase of a large motor accounts for approximately 99% of its lifetime CO₂ emissions and the overwhelming majority of its total cost of ownership (TCO), with electricity by far the largest cost component. These machines drive compressors, pumps, fans and other critical equipment around the clock.

What motor efficiency rates are possible? What needs to change in specification and design to achieve them?

For large synchronous motors and generators, optimized designs typically improve efficiency from around 98.5% to 98.7–98.8%. For induction-based systems, which make up a large share of installed equipment, the achievable improvement is often higher, typically 1 to 1.5 percentage points.

The technology to close the gap already exists, uses proven designs, and typically pays for itself within three years.

The most important thing that needs to change is not the motor. It is the specification. Every large motor procurement should include a minimum efficiency requirement and invite high-efficiency alternatives alongside standard designs. When lifecycle cost analysis is applied, electricity dominates TCO for large motors and generators, and specifying a lower-efficiency unit means accepting decades of avoidable operating expense.

The upper end of what’s achievable is illustrated by a 56 MW synchronous motor delivered to a steel plant in India in 2025, which achieved a verified efficiency of 99.13%, a world record. Over its lifetime, that machine is expected to save $5.9 million in electricity costs and avoid 45,000 tonnes of CO₂, with a payback period of just over three months, even in a relatively low electricity cost environment.

The report states that billions of dollars in energy are going to waste because of purchasing decisions, not technical roadblocks. Why?

Efficiency outcomes are shaped mainly by regional energy economics and industry buying models, not by any limitation in technology.

Decisions are often anchored in current energy prices, which undervalues how costs, demand and energy security may change over a machine’s life. In industries with fragmented value chains, the people making purchasing decisions are disconnected from long-term operating costs, which reinforces a short-term focus.

Adoption of higher-efficiency designs is not constrained by technology, cost or industry requirements, but by the distance between the decision-maker and the energy bill. The companies closing the gap fastest are those where the engineer who selects the motor and the executive responsible for energy performance are aligned around a single metric: total cost of ownership.

Can you tell us about the research and data used to reach the report’s conclusions?

Between 2015 and 2025, every design of large synchronous motor and generator delivered from ABB’s Västerås facility in Sweden was efficiency-tested to International Electrotechnical Commission (IEC) and National Electrical Manufacturers Association (NEMA) standards. That dataset of more than 1,000 machines is the foundation for the report.

Based on analysis of delivered units, the average efficiency improvement of a TIE-optimized design over a standard design is estimated at 0.2%.

Scaled across the fleet, the numbers are significant. If every standard machine ABB delivered over the past decade had been specified for maximum efficiency, industry could have saved 11.1 TWh of electricity, worth nearly $1 billion at U.S. energy costs, and avoided 5.9 million tonnes of CO₂.

If a motor was oversized to hedge for potential future capacity, what does that mean for efficiency and for motor maintenance or service life?

Oversizing is one of the most common, and most inefficient, choices made when selecting a large motor. A motor running significantly below its rated load operates less efficiently.

The better approach is to size the motor correctly and then specify the highest efficiency available at that rating. Futureproofing is better achieved through smart design and, where appropriate, variable speed drives. Oversizing moves the efficiency problem rather than solving it.

Beyond the motor itself, what other energy efficiencies do engineers need to consider?

The motor is the core of the system, but it is only one element. The larger efficiency opportunity is often in electrification itself.

A single-stage gas turbine driving a compressor operates at approximately 35% fuel efficiency. Roughly 65% of the energy converted is lost to heat, mechanical friction and thermodynamic constraints before any useful work is done.

Replacing single-stage gas turbine-driven compressors and pumps with electrically driven systems can significantly reduce total fuel consumption, even where the electricity still comes from gas turbines. Large combined-cycle turbines generating power for multiple electric drive trains operate at substantially higher efficiency than individual single-stage turbines each driving a single load. The gain grows further when high-efficiency motors and generators are specified for the electric drives.

Operators should also factor in grid carbon intensity. In Australia, the operational CO₂ footprint of a 20 MW motor-drive system is 25 times that of an equivalent system in Sweden. The motors are the same; the grid amplifies the consequences of every efficiency decision made at purchase.

When should operators start thinking about sensing and data analysis to better understand motor performance and health? What does that mean for efficiency?

Once a machine is in operation, continuous monitoring of performance against design efficiency is critical. Overall system efficiency depends not only on the motor or generator, but on the entire motor-driven system, including the driven equipment, controls and operating profile. The motor or generator still defines the core energy conversion efficiency and remains a key lever for reducing energy use and emissions.

Sensing and data also show operators whether their assets are running at their designed efficiency over time, catching degradation early before it compounds into significant energy waste.

How difficult is it to retrofit a high-efficiency motor into legacy equipment or manufacturing flows?

Retrofit is possible, but it should not be the primary strategy. When a motor reaches end of life and replacement is due, that is the moment to upgrade. A high-efficiency option can be specified at any stage of the procurement process up to the point of purchase.

Engineers going into a retrofit should assess the full system, not just the motor. Replacing combustion-driven equipment with electric motors is one of the most powerful levers for decarbonization, but electrification without high efficiency leaves much of that value unrealized.

The energy transition is moving faster than buying practices are adapting. Industrial facilities being designed and built today will lock in their motor and generator specifications for the next quarter century, and the efficiency standards written into those contracts now will remain in place until 2050.