ENERGY EXPANSION AND TRANSFORMATION
Meeting demand while advancing decarbonization efforts
Feature article
1970-01-01
Delivering secure and affordable power while maintaining output and reducing emissions is becoming more complex.
As demand continues to grow, the challenge is not choosing between expansion and decarbonization but delivering both by improving how industrial energy systems and existing assets perform and integrating new energy sources reliably.
ABB’s Energy Industries division engaged insights consultancy Verdantix to provide industrial organizations with a clear, evidence-based framework to advance capacity growth and emissions reduction in parallel by focusing on industrial operational performance and energy efficiency.
The most effective industrial decarbonization strategies don’t treat decarbonization as a separate objective. By improving efficiency across existing and new systems, organizations can balance energy expansion with the need to transform and decarbonize in ways that are practical, regional and scalable.
Industrial performance and decarbonization
TWO GOALS, ONE STRATEGY
According to the International Energy Agency (IEA), global energy demand grew by 1.3 percent in 2025. Solar, accounting for 25 percent of increased demand, led growth for the first time, followed by natural gas at 17 percent. And while overall demand growth moderated, electricity demand surged by 3 percent, more than twice the rate of total energy growth.
Behind the surge: the electrification of industry and transport, population growth and the AI economy. For industrial organizations, the result is a dual challenge – increase operational productivity and energy output to secure supply and profitability, while simultaneously cutting emissions.
Operational performance and decarbonization objectives have historically been viewed as competing priorities. Emissions reduction was perceived as costly and disruptive because it involved installing additional equipment that was non-revenue generating, required high capital expenditure and often consumed additional energy to operate.
That historical view is increasingly outdated. A performance-led strategy shows that organizations can improve output, scale new capacity and reduce emissions simultaneously because the operational imperatives are deeply interconnected.
In many regions, combining low‑carbon energy sources with performance improvements across existing infrastructure is essential to scaling capacity responsibly today.
The evidence is compelling. Verdantix’s 2025 commercial and industrial energy transition survey found that 79 percent of respondents said optimization and efficient management of existing assets would have the largest impact on their operational decarbonization in the next five years.
Balancing near-term gains and long-term decarbonization ambition
Energy expansion and transformation are occurring in parallel. As a result, energy producers and industrial organizations are prioritizing operational improvements that secure reliability, increase output and expand capacity today.
Focusing on automation, electrification and digitization initiatives for immediate wins is a pragmatic approach that will continue to deliver benefits well into the future. At the same time, forward-thinking executives are already planning for more capital-intensive projects like CCS and hydrogen, integrating them into future roadmaps without delaying near-term progress.
The insight driving this shift: improving plant efficiency and modernizing assets enables decarbonization progress as an integrated outcome, further strengthening business resilience. This approach also enables organizations to increase production from existing assets while preparing for future system expansion.
Organizations that take this approach will be better positioned to meet rising demand, manage risk and deliver long-term value. In a high-demand environment, the fastest path to both energy expansion and transformation is improving how energy systems perform while designing new ones for efficiency, flexibility and integration from day one. That's because a performance-led approach links industrial energy efficiency, energy expansion and decarbonization initiatives into a single execution strategy.
The benefits extend across the entire organization. From CFOs and risk leaders to technical, production and maintenance teams, every function stands to gain from richer asset insights, smarter plants and a unified pathway toward more future-ready performance.
Your Questions Answered
By adopting a performance‑led strategy that embeds emissions reduction into everyday operational improvements. Rather than treating decarbonization as a separate, capital‑intensive initiative, leading organizations focus on optimizing and modernizing existing assets, thereby improving efficiency, reliability and utilization at the same time. Research by ABB and Verdantix shows this approach delivers decarbonization impacts in the near term, while also increasing output and resilience. By integrating efficiency gains, automation and electrification into core operations, emissions reductions become a by‑product of better performance, not a drag on profitability. This approach also creates the operational stability required to integrate low carbon energy and scale low carbon technologies as part of everyday industrial operations.
By prioritizing automation, electrification and digitalization across their energy systems. Modern control systems, smarter plants and richer asset insights allow organizations to extract more production from existing assets while reducing energy waste and unplanned downtime. This focus on operational performance directly supports reliability and productivity, enabling organizations to meet rising demand through improved industrial energy efficiency without proportionally increasing energy use or emissions because you are able to do more with less on integrated, modern systems. Industrial energy efficiency and output growth are not trade‑offs; they are deeply interconnected outcomes of better operational performance.
By prioritizing near‑term operational improvements that secure reliability and capacity today, while designing systems that are flexible and efficient for the future. Immediate gains from automation, electrification and digitalization can deliver lasting benefits, creating a strong foundation for more capital‑intensive technologies such as carbon capture or hydrogen later on. By improving how current energy systems perform and ensuring new assets are designed for integration from day one, organizations can expand capacity, manage risk and progress decarbonization in parallel, without delaying business value or long‑term ambition.