Sustainability and carbon neutrality goals affect the market for low-voltage (LV) motors and drives and influence manufacturers' decisions to drive the growth of higher-efficiency motors (IE3) and drives.
Summary
Sustainability and carbon neutrality goals affect the market for low-voltage (LV) motors and drives and influence manufacturers’ decisions to drive the growth of higher-efficiency motors (IE3) and drives.
The industrial motor is the workhorse of the manufacturing sector
The industrial motor is the workhorse of the manufacturing sector and, thus, the primary consumer of energy for manufacturers. Efforts have been made over the last 20 years to support the transition from low-efficiency motors (e.g., IE1 [standard efficiency) motors] to higher-efficiency alternatives; however, the only effective method to increase adoption has been through legislation.
Because it is currently legislation (and not consumer behavior) that drives energy efficiency adoption, the market will not shift until we implement minimum efficiency standards. The most recent example of this is in both the EU and China. In July 2021, the EU Members of the European Parliament (MEPs) and the Chinese government required all low-voltage motors with a rated output of 0.75–1,000kW with two, four, six, or eight poles (excluding explosion-proof and other special purpose motors) sold within the EU to meet an IE3 minimum standard efficiency level. They will no longer allow exceptions on sales of IE2 motors paired with a variable-frequency drive (VFD). This caused a major shift in both markets, drastically reducing the amount of IE2 motors sold in favor of IE3 motors.
Figure 1: Regional unit shipments of IE2 motors, 2019–26
Source: Omdia
Figure 2: Regional unit shipments of IE3 motors 2019–26
Source: Omdia
Beginning July 2023, all motors sold in the EU and China with an output of 75–200kW will need to meet an IE4 minimum efficiency. The only exceptions to this include 8P, brake, or explosion-protected motors. In addition, all single-phase motors with an output of 0.12–1,000kW will have to meet an IE2 minimum efficiency. Furthermore, China has announced plans to implement an IE5 minimum efficiency legislation as well. With regulation being the main driver of the adoption of higher-efficiency technologies, these legislative changes are expected to drastically shift the market.
Currently, there are over 820 million motors installed worldwide, consuming approximately 8.6 trillion kWh of electricity globally per annum, which is equivalent to the combined annual power consumption of both China and India. Currently, under 15% of motors are of an efficiency rating of IP3 (premium efficiency) and above. The installed base of low-efficiency motors, however, is massive. Recent legislations are estimated to have increased the installed base of IE3 and IE4 motors to a unit compound annual growth rate (CAGR) of 22% from 2020 to 2025.
Figure 3: Global LV motor shipments by efficiency level
Source: Omdia
More premium AC drives needed to operate higher efficiency motors
With higher efficiency motors, more premium AC drives are likely needed to operate it. Omdia expects the CAGR in revenue between 2021 and 2026 for premium AC drives to be 5.5%, which is higher than that of compact and standard AC drives. The rebound in the energy sector and upcoming investments in the infrastructure sector will promote the growth of premium AC drives. Sustainability and decarbonization initiatives around the globe will lead investments in renewable energy sectors and increase the focus on energy-efficient systems in heavy industries.
Approximately 23% of motors also operate without frequency inverters, which are electronic devices that can adjust the speed at which a motor operates (and therefore the amount of energy it uses). By 2026, the attachment rate of drives will reach 28%. Adopting motors with premium efficiency (IE3) would reduce global energy consumption by 10%; this percentage will increase to more than 30% if the motors are paired with VFDs. If drives are deployed with high-efficiency or premium-efficiency motors in all industrial systems with a 100% attachment rate, greenhouse gas (GHG) emissions should drop by 40% by 2040.
Fans and pumping applications (such as ventilation and air-conditioning systems, combustion air for boiler systems, chillers, and water-pumping systems) have one of the bigger markets for motors with drive attachments with an attachment rate of approximately 40%.
Table 1: Commission Regulation (EU) 2021/341 as of February 23, 2021, amending Regulations (EU) 2019/1781 to set eco-design requirements for motors and drives
| Effective July 1, 2021 | Effective July 1, 2023 |
Motors | IE2 efficiency mandatory: – Three-phase motors with rated output from 0.12kW and below 0.75kW | IE2 efficiency level mandatory: – Explosion protected; Flameproof ‘d’ with level of protection of ‘b’ – [Ex eb] increased safety motors from 0.12kW to 1,000kW – Single-phase motors from 0.12kW to 1,000kW |
IE3 efficiency mandatory: – Rated output of 0.75–1,000kW – Motors with protection types Ex ec, Ex d, Ex de, Ex t – Motors with IC418 cooling | IE4 efficiency level mandatory: – Three-phase motors with power ratings of 75–200kW, with two, four, or six poles | |
Drives | IE2 efficiency mandatory (AC drives): – Three-phase standard drives (diode rectifier), 0.12kW≤Pn≤1,000kW | No changes |
Source: Omdia
Omdia projects the CAGR of LV AC drives to be 5.3% in unit shipments, with trends of sustainability and decarbonization being one of the driving factors of this growth. IE3 and IE4 legislations in the EU and China will promote the growth of premium AC drives, which will be the fastest-growing AC drive among compact and standard AC drives with a CAGR of 5.8% in unit shipments.
Figure 4: Regional unit shipments of LV drives, 2019–26
Source: Omdia
Figure 5: Global unit shipments of LV AC motors and drives, 2019–26
Source: Omdia
Sustainability and carbon neutrality goals drive the growth of higher-efficiency motors and drives
Sustainability and carbon neutrality goals will influence manufacturers’ decisions and drive the growth of higher-efficiency motors (IE3) and drives. Some aspects of consideration are as follows:
Power generation
Sustainability and carbon neutrality goals will shift investment from the coal energy sector to the renewable energy sector, thus the demand for premium motors and drives from the renewable energy sector will grow in the forecast years. Additionally, in other industrial sectors, the demand for energy-efficient motors and drives will continue to grow as the demand for energy-saving upgrades to existing units increases.
Higher efficiency standards and policies
Both discrete and process sectors, which are high in energy consumption, will minimize their carbon footprint during the production process to achieve carbon neutrality goals. Improving the energy efficiency standards of motors and drives will be an important means to reduce carbon footprint during production effectively. Suppliers at the forefront of technology that continue to innovate and offer products with higher energy savings will gain a competitive advantage.
Digital transformation in manufacturing facilities
The sustainability trend will allow manufacturers to shift their focus to digital transformation in their production process in order to meet the goal of optimizing production and improving energy efficiency. This increasing demand of digitalization will provide opportunities for related motor and drive products, such as industrial networking infrastructure devices, connectivity, and sensors, among others.
Appendix
Further reading
Low Voltage Drives Report – 2022 Analysis (September 2022)
Low Voltage Motors Report – 2022 Analysis (October 2022)
Author
Ivan Campos, Research Analyst, Electric Motor Systems
Rachel See, Research Analyst, Electric Motor Systems
