ABB: How Can Energy Firms Usher in the 'Age of Electricity'?

For much of the past decade, discussions around the energy transition have focused primarily on one issue: where electricity comes from. 

Policymakers, businesses and investors concentrated on expanding renewable generation, scaling clean technologies and reducing the carbon intensity of supply.

That focus was necessary and has driven meaningful progress. But the International Energy Agency (IEA)’s Global Energy Review 2026 reframes the debate.

The world has now entered the “Age of Electricity”. Electricity demand is growing more than twice as fast as overall energy demand, driven by structural changes across the global economy. 

Industrial electrification is accelerating and data centres and digital infrastructure are expanding rapidly, while electric mobility continues to grow and electrified heating is becoming more widespread.

Crucially, the IEA emphasises that this is not cyclical. It reflects a structural transformation in how economies function.

At the same time, electrification is advancing faster than grid infrastructure can comfortably expand. 

Across many regions, energy systems with ageing assets are already under pressure to meet rising demand while also needing to address affordability and reliability needs.

This shifts the central question. In the Age of Electricity, the focus is increasingly on how electricity is transformed into productive, reliable value across the economy, rather than simply how it is produced.

Efficiency at the centre of the system

This is where energy efficiency moves from being a supporting theme to a central economic lever.

One of the most important findings in the IEA’s report is that improvements in how energy is used helped limit overall energy demand growth to around 1.3% in 2025, despite strong economic expansion and rapid growth in electricity demand. 

That is a clear signal that system performance already plays a decisive role at economy level.

Electricity does not generate economic output in isolation. 

Growth is created inside industrial and infrastructure systems: factories, process plants, logistics networks, commercial buildings, and digital facilities. 

These are the environments where electricity becomes motion, cooling, heat, throughput and productivity.

As the demand for electricity increases, the efficiency of these systems becomes more and more important.

The transformation of industrial power systems

Industrial electric motion systems sit at the centre of this transformation. 

Motors, variable speed drives and digitally enabled control systems determine how effectively electricity is translated into useful work. 

They power pumps, compressors, conveyors, fans and a wide range of industrial processes. Moreover, they directly influence energy consumption, uptime and operational performance. 

This matters because industrial motors already account for a significant share of global electricity use – around 60% of industrial electricity demand.

They also represent around 25% of global electricity demand altogether.

Yet many systems in operation today still run below optimal efficiency, particularly, but not only, in older industrial installations and infrastructure networks.

The opportunity is therefore substantial and practical, rather than theoretical.

Upgrading to high-efficiency motors and drives can reduce energy consumption while improving process stability and reducing maintenance requirements. 

Variable speed drives allow equipment to adjust dynamically to real demand rather than operating at constant output. 

Digital monitoring and control systems can identify inefficiencies early, enabling operators to optimise performance continuously rather than reactively.

These improvements may be incremental at the individual asset level, but become material when scaled across industrial systems.

Why supply expansion alone is not enough

The IEA’s findings reinforce a broader structural reality: expanding electricity supply alone will not be sufficient to support the Age of Electricity.

Even as renewable capacity continues to grow rapidly, economies must also modernise the systems that convert electricity into useful work. 

Without this, rising demand risks placing increasing strain on grids, industrial operations and infrastructure resilience.

This is particularly relevant for energy-intensive sectors such as manufacturing, water management, transport and increasingly data centre infrastructure. 

These sectors are under growing pressure to decarbonise while also improving productivity and maintaining reliability in a more electrified system.

There is also a practical time dimension. Building new generation and grid infrastructure takes years of planning, permitting and capital deployment. 

By contrast, improving the efficiency of existing industrial systems can often deliver faster gains, with immediate impacts on energy consumption and operating costs.

In many cases, the most effective way to support electrification is not only to generate more electricity, but to use existing electricity more strategically.

The Age of Electricity is also the ‘Age of Optimisation’

This is why the Age of Electricity should also be understood as an age of system optimisation.

The next phase of the energy transition will not be defined solely by how quickly the world expands clean power generation but also by how effectively economies integrate, manage and utilise electricity across large-scale systems.

The IEA’s Global Energy Review 2026 makes clear that electrification and efficiency mutually reinforce one another.

Electrification enables decarbonisation and economic modernisation, while efficiency ensures that this transition can scale sustainably, reliably and affordably.

As governments and industries continue to accelerate investment in electrification, equal attention must now be given to the systems where electricity is ultimately consumed and transformed into value.