New ABB Report Reveals 63% of Malaysian Industries Invest in Energy Efficiency, but Execution Gaps Hinder Progress
KUALA LUMPUR, MALAYSIA – A recent report indicates that 63% of industrial leaders in Malaysia have made investments in energy efficiency, with an additional 33% planning to do so within the next year. Despite this commitment, the outcomes remain inconsistent and fragmented, highlighting significant execution gaps.
Energy Costs and Profitability Threats
Energy represents a substantial 25% of operating costs for Malaysian industries. Alarmingly, 61% of companies report that rising energy prices pose a threat to their profitability. The focus for executives has shifted from merely reacting to price spikes to managing ongoing price volatility and structural exposure.
In comparison to global averages, Malaysia’s energy cost burden is on par, yet the perception of profitability threats is higher at 61%, compared to 59% globally. Notably, Malaysia boasts the highest level of digital readiness globally at 84%, significantly surpassing the global average of 67%.
S Kanavati, Vice President of Motion Services at ABB Malaysia Sdn Bhd, emphasized the importance of energy efficiency for business continuity and long-term value creation. He stated that leaders are increasingly focused on optimizing energy use, but face challenges in scaling and sustaining these initiatives.
The Importance of Execution
The report highlights that while digital readiness in Malaysia stands at 84%, with many organizations prepared to deploy digital energy management tools, this readiness does not guarantee effective outcomes. Only 42% of Malaysian companies consistently apply the total cost of ownership (TCO) principle when making investment decisions, despite 85% agreeing that it should guide their purchasing strategies.
Responsibility for energy efficiency initiatives remains fragmented across various functions, including executive management, operations, sustainability, maintenance, and finance. This lack of clear accountability complicates the execution of energy efficiency strategies.
Pearl Ong, Regional Service Manager for Asia at ABB Malaysia Sdn Bhd, noted that the barriers to energy efficiency have evolved. The primary obstacle has shifted from cost, which has decreased from 50% to 43% since 2022, to issues such as organizational silos, skills shortages, and insufficient data. This shift indicates a critical inflection point where businesses must convert intent into actionable execution.
Barriers to Energy Efficiency
In Malaysia, the most significant barriers to achieving energy efficiency include costs (54%), potential downtime and disruption (44%), and a lack of specialized resources (36%). These challenges hinder the effective implementation of energy-saving measures.
Risks of Complacency with Renewables
The research also highlights a concerning trend of ‘post-renewables complacency.’ Among the organizations in Malaysia that have transitioned to renewable energy sources—43% of respondents—37% report a diminished focus on energy efficiency. While renewable energy reduces the carbon intensity of energy consumption, it does not necessarily decrease the overall volume consumed. This oversight leaves substantial efficiency gains untapped, even for companies that have adopted green power.
Respondents identified their primary motivations for investing in energy efficiency as reducing energy costs (63%), ensuring regulatory compliance (53%), and enhancing resilience and competitiveness (49%).
The Future of Energy Transition
The next phase of the industrial energy transition will be characterized by delivery capability. Although activity levels are high across Malaysian businesses, efforts remain superficial, lacking the necessary coordination and long-term structure.
To bridge the execution gap, ABB combines diagnostics with targeted modernization of motor-driven systems, software-based optimization tools, outcome-based financing, and lifecycle services. Pearl Ong stated that end-to-end energy intelligence is a key strategy for helping industries achieve sustained performance gains.
For further details, visit www.zawya.com.
About ABB
ABB is a global technology leader in electrification and automation, dedicated to fostering a more sustainable and resource-efficient future. By integrating engineering and digitalization expertise, ABB enables industries to operate at high performance while enhancing efficiency and sustainability. With over 140 years of history and approximately 110,000 employees worldwide, ABB is listed on the SIX Swiss Exchange and Nasdaq Stockholm.
ABB Motion, a leader in motors and drives, focuses on accelerating a productive and sustainable future through innovative technology and solutions.
