From Intent to Impact: Why Execution Defines the Next Phase of Industrial Energy Efficiency

Energy efficiency has become a foundation for business continuity, compliance, and long-term value creation, but many industrial organisations in Australia are struggling to turn intent into sustained results, according to a new report from ABB. In partnership with Sapio Research, ABB recently surveyed 2,700 senior decision‑makers across 15 countries and 15 industries, including 200 from Australia. The study found that 65% of respondents in Australia have already invested in energy efficiency and a further 30% plan to within the next 12 months. Yet, progress is increasingly constrained by execution gaps.

On average, energy makes up 26% of operating costs in Australia, and 59% of companies say rising energy costs continue to threaten profitability, despite calmer wholesale markets. The issue is not lack of ambition or funding. For executives, the challenge has shifted from reacting to price spikes to managing persistent price volatility and structural exposure.

Compared to the global average, Australia reports a similar energy cost burden (26 vs 25% globally), but slightly higher levels of digital readiness (70 vs 67% globally). At this level, respondents are already using or ready to deploy digital energy management tools. However, readiness alone does not guarantee results.

Despite falling from 50% in 2022, cost (43%) is still the most significant barrier to energy efficiency, followed by the potential for downtime and disruption (33%), and a lack of specialist resource (32%). Cost remains a top concern as the upfront price of purchasing or upgrading to more efficient machines can sometimes seem high; however, more organisations are starting to recognise the importance of using Total Cost of Ownership (TCO) to assess investment decisions. 82% agree that TCO should be used to guide investment decisions; however, capital budget constraints lead to just 38% of Australian companies consistently applying TCO in the procurement process.

Lack of specialist resource as a barrier is consistent with the fragmentation of responsibility for energy efficiency across executive management, operations, sustainability, maintenance and finance, with no single function clearly accountable. Companies are now being held back by organisational silos, skills gaps, and lack of usable data, and businesses are now facing the challenge of turning intent into repeatable execution. Leaders care about optimising energy use, and the struggle is now deployment, at scale, on a continuous basis.

Renewables alone are not enough

The research also points to a growing risk of ‘post‑renewables complacency’. Among organisations in Australia that have switched to renewable energy sources (37% of respondents), 32% report a reduced focus on energy efficiency. While renewables lower the carbon intensity of energy, they do not reduce the volume consumed. For companies that have already secured green power, or even self-sustaining sites that are off-grid, significant efficiency gains remain untapped. Energy efficiency offers more than just a reduction in carbon emissions, it provides opportunities to strengthen resilience, control long‑term costs and reduce exposure to volatility.

When asked about their primary reasons for investing in energy efficiency, respondents said reducing energy costs (47%), reducing their carbon footprint (47%), and enhancing their corporate reputation (37%). This reflects the importance of energy efficiency in improving bottom-line, as well as the impact of recent mandatory sustainability reporting legislation coming into effect. As more businesses start having to report on their Scope 1, 2 and eventually, Scope 3 emissions, carbon footprint reduction will continue to be a driver for investment in energy efficiency.

The next phase of the industrial energy transition will be defined by delivery capability. While activity levels are high across businesses in Australia and globally, efforts remain shallow, lacking coordination and long‑term structure. To close the execution gap, ABB combines diagnostics with targeted modernisation of motor‑driven systems, software‑based optimisation tools, outcome‑based financing and lifecycle services. These are the ways we help industries outrun, leaner and cleaner — turning isolated initiatives into sustained performance gains.

For more information and to read the full report visit the ABB website.

Aran Silverio, Energy Efficiency Product Manager, ABB Australia, Sapio Research