The manufacturing industry in India is indicating a noticeable shift in the mindset towards cost-saving and energy efficiency measures, with a large number of companies planning to achieve net-zero emissions within 5 years, revealed the latest survey on The Energy Efficiency Investment by ABB Ltd.
Indian companies are found to be far ahead of the companies in developed markets such as Germany, Spain, UK, and US. The shift in mindset comes in the backdrop of Prime Minister Narendra Modi’s pledge to make India carbon-neutral by 2070.
“Now with energy prices rising, there is an even greater need for businesses to control and reduce their energy consumption and costs,” said Sanjeev Arora, President, Motion Business Area, ABB India Ltd., told Businessline.
ABB had recently conducted ‘The Energy Efficiency Investment Survey 2022’, which included 13 countries, with India ranked third after China and Mexico, with 63% of the respondents planning to acheive Net Zero within 5 years.
“In terms of timeline, one-third of the respondents plan to make energy efficiency improvements this year, with a further 61 per cent planning to make them within the next 2 to 3 years,” said Arora, underlining the pace at which the transformation towards energy efficiency is taking place in India.
One of the findings of the survey suggested 70 per cent of the respondents in India were investing in and upgrading their equipment to best-in-class energy efficiency ratings, and almost 60 per cent were carrying out audits to identify key areas for improvement.
Why is Energy Efficiency so important?
Most of the industrial installations were found to have low-efficiency motors with a lifespan of 10–15 years, making them energy guzzlers. Motor-driven systems account for nearly 70 per cent of the electricity consumed. . The survey revealed that 51% of the companies believed rising energy costs to be a moderate or major threat to their profitability, “highlighting the growing need for energy efficiency,” said Arora.
However, the cost of installations for energy efficiency remains a major barrier. As per the ABB survey, 42 per cent found the initial cost of investment as a major barrier to improving their energy efficiency. However, they felt it was important for long-term cost savings.
But according to Arora, “the quantum of return on investment on the cost of adoption of energy-saving measures shows rapid pay-back!” He cites an example of ABB’s technology deployment in a high-cost cement industry, saving over 1.8 gigawatt-hour (GWh) of energy annually.
Half of the companies investing or planning for investments in energy efficiency have cited production as their high-priority area for investment, followed by facilities, including building management, HVAC, and lighting.
“While there is a reason for optimism, the transition to a more sustainable future will require a concerted effort from the industry to accelerate the adoption of the high-efficiency technology that exists today,” said Arora, adding that ABB’s technology deployment has helped companies in sectors such as metals and mining, pharma, F&B, cement, and utilities acheive significant energy savings.
The survey was conducted among 2,294 companies world-wide with 254 respondents from India, having an annual turnover of over $100 million and/or over 500 employees.