3521: What ABB Is Seeing Across Global Industrial Energy Systems

[00:00:03] How do you keep an entire industrial operation running cleaner, smarter and steadier, all while energy prices keep climbing and outages seem to hit the headlines every other week? Well, it's a question many leaders are wrestling with around the world.

[00:00:21] And as we head into another year of targets getting closer and expectations rising, today I'm joined by someone who spends his days helping some of the largest organisations on the planet figure out how we're going to get there. His name's Stuart Thompson and he leads ABB's electrification service division from Sydney, Australia. And today he's going to bring a global view of what real progress looks like.

[00:00:48] And our conversation will range from the practical reality of asset modernisation to the battery storage models that can turn energy volatility into an opportunity. But he will also open the door on the role of AI, remote support through augmented reality and how predictive maintenance is shifting from a nice idea to an operational must have.

[00:01:12] But I think one of the things I enjoyed most from my guest today is his sense of grounded optimism in his thinking. Stuart spends his time inside steel plants, semiconductor fabs and energy intensive industries. Yet his message is surprisingly energising. You'll hear how companies are learning to cut carbon without ripping out entire systems,

[00:01:36] how they are gaining control of their energy security and how new service models are changing that balance sheet pressure that used to slow everything down. So settle in for a conversation that looks ahead to 2026 with clarity, curiosity and maybe even a few surprises along the way. Here at the Tech Talks Network, we now have nine podcasts and approaching 4000 interviews.

[00:02:02] And that is only possible with some of the great friendships that I've developed over 10 years of podcasting. And a company I'm proud to call friends of the show is Denodo, because not only have they been on this podcast multiple times, they also help make sense of the AI data chaos that we're seeing now, because the data world is louder than ever. AI hype, lake house complexity and pressure to deliver more with less. These are things that I talk about every day on this show.

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[00:02:54] So if you're ready to unlock real outcomes, simply visit denodo.com today. But enough from me. Let's get Stuart onto the podcast now. So a massive warm welcome to the show, Stuart. Can you tell everyone listening a little about who you are and what you do? Yeah, thanks, Neil. Look, my name is Stuart Thompson. I'm the president of ABB's electrification service division, and I'm lucky enough to be based out of Sydney in Australia.

[00:03:24] We run an industry that runs 24 seven to help businesses get leaner and cleaner. And ABB has been doing electrical services for over 140 years on a global basis. The business we run is about a $1.4 billion business.

[00:03:45] We have about 5,000 field engineers around the world in 50 countries and looking after about 18 million electrical installations around the world in some of the most remote places that you can imagine. Well, thank you so much for sitting down with me today.

[00:04:05] We do record this episode at the end of 2025, which means 2026 will take us another step closer to 2030 and all those big targets we've been hearing about for years now. But suddenly they're getting quite close. So how is the industrial sector rethinking what it means to make tangible progress in achieving some of these climate targets in the pursuit of a global energy transition?

[00:04:32] It feels like we've been talking about it for so long, but things are getting real now, right? Yeah, I think, Neil, that if we look at some of the figures, the IEA estimates that nearly a quarter of global energy-related carbon emissions are coming from construction, large manufacturing, and just production of goods and services.

[00:04:55] So it's a contributor, a significant contributor to these challenges that everybody's facing and these 2030 targets. You know, today, it looks like, according to PwC, that only 46% of companies are on track to meet their scope one targets, which is really their produced emissions.

[00:05:17] And 54% will achieve their scope three, which is where they're relying on other parties, their sourcing partners and customers that they work with, suppliers that they work with, achieving their targets. So there's still a bit of a way to go, and there's still a huge opportunity for this to happen.

[00:05:41] And then we look at, you know, in the industrial sectors, things like reliability and consistency of energy supply. And I think that if we look at statistics today, two-thirds of industrial businesses experience unplanned outages, even in 2025. And those unplanned outages are happening at least once a month.

[00:06:08] And then when you look at the average industry losing $125,000 an hour, this is significant. And also, as we look at, you know, these ESG targets and with the change of politics and change of government and position, companies are not only looking at it from their shareholders' perspective, but they're looking at it from an ESG target.

[00:06:36] But they're also looking at it from a financial and energy efficiency strategy for the business. And quite often, the sustainability target didn't necessarily match a financial target. And I would say today, in 2025, what's accelerating the efforts, particularly in this area around electrical sustainability,

[00:07:00] is more around reducing costs, energy usage costs and lifecycle costs, as well as future-proofing people's operations going forward. And at the same time, ticking environmental boxes. And for many people listening, when they think of asset modernization, I think it's often seen as the key to balancing carbon reduction and cost savings.

[00:07:27] And I'm curious, from what you're seeing, what do these shifts look like in practice right now? What are you seeing? Yeah, so look, when we talk about asset modernization, there's sort of two aspects here to the energy crisis that we're facing in not having enough power and enough energy. There's two aspects that you can follow.

[00:07:51] One, you can drive efficiency out of existing assets that you already have to try and reduce the amount of power or get more out of the assets that you have and or add additional capacity in energy.

[00:08:07] And even off the current projections of demand of power, just by adding energy doesn't fulfill the needs of the industry or of the planet or people around electrical systems. So we have to take the existing assets that we've got and make the most of them. And one of the ways of doing that is modernizing whilst using most of the asset that is already there.

[00:08:36] And what I mean by that is a lot of the electrical equipment are just standard infrastructure like sheet metal, bus bars and electrical conducting equipment.

[00:08:49] And most of that can just remain in place while you take the switchgear subcomponents, the intelligent components that can operate faster, make real-time decisions, implement digital strategy or even AI into its algorithms to make things run better and run smarter.

[00:09:11] So by just taking 50% of the asset, enhancing the intelligence within the asset, but maintaining the infrastructure 50% without having to design or develop or change that out, you're actually net reducing carbon footprint.

[00:09:31] But you're also giving a huge opportunity for more efficiency, more productivity out of the asset and thus more electrical power out of the same infrastructure that you already have. So there's examples, there's many examples of companies doing that. For example, there's been a big push in semiconductors around the world.

[00:09:55] And I know Intel's been working extremely hard at increasing their capacities and through existing footprint, they're able to do that. If we look at even something like a steel plant, Jedal Steel in Oman, they were able to reduce waste. They were able to meet their vision to 2040 by doing targeted modernization of their electrical asset that feeds their steel plant.

[00:10:23] So we do this every day. We have about nearly 6,000 solutions available, both in medium and low voltage. And we become the advisor to the customer. We walk their site. We give them consultancy advice on how to upgrade their systems, drive that efficiency, and therefore also improve their carbon footprint at their facility.

[00:10:49] So it's something that we do as standard today and probably represents about 30% of the business that we offer. And rising costs combined with an uncertain macroeconomic environment can also pose big concerns when it comes to energy security and availability. But we are recording this at that magical time of year when people are starting to think, what can they do differently? How can they make a difference in 2026 and beyond?

[00:11:16] So for people listening, how should organizations and business leaders be approaching risk mitigation in their energy strategies? Any food for thought or words of inspiration here? Yeah, look, I think, Neil, some of the big things are, firstly, it doesn't matter how big your business is, but you can all have an impact. A lot of us are looking at the cost of capital these days.

[00:11:43] And instead of just doing large capital expenditures, which puts a lot of cash pressure on companies and require large amounts of effort, financial structures, et cetera, to make big changes.

[00:12:00] A lot of companies are taking action now and moving forward into 2026, looking to drive operational expenditure models to extract the maximum value out of their infrastructure that they have in their organization today. So this really lends to what we're talking about with modernization to help them keep those assets running longer.

[00:12:28] And, you know, looking ahead of the curve around things like predictive maintenance instead of doing, you know, an annual shutdown. How do we keep our assets running based on the conditions that they're running under and run them for many years longer without doing any shutdowns and having bigger interventions on their site and driving cost into production?

[00:12:57] So there's different approaches. Instead of just having an annual shutdown, we can run the assets longer or predict when they're going to fail instead of looking to a complete shutdown and a firefighting for a breakdown on a customer's site. So I think that's sort of one approach.

[00:13:17] Predictive maintenance and proactive asset management are available to customers to look at in their infrastructure so that we maximize the lifespan. We cut operational costs and we continue to drive efficiency in operational expenditures going forward. So, look, there's plenty of options for customers here to operationally enhance what they've got rather than going for those big capital expenditures.

[00:13:48] And as this is a tech podcast, obviously we're seeing a lot around innovations such as augmented reality, IoT, yes, artificial intelligence and machine learning, or how all these things are converging and maybe even helping transform energy management. And I'm curious, how are you at ABB? How are you leveraging some of these technologies to deliver the latest cutting edge solutions for your customers that they're increasingly expecting?

[00:14:13] Yeah, look, Neil, I think one of the biggest challenges for customers is to make informed decisions and for us to act with speed and act in collaboration with them.

[00:14:25] So, if I pick an area like remote assistance servicing and leveraging things like augmented reality, we can have the customer and the industrial site leader doing their first level of analysis of their asset at their site. So, we're giving them the tools. We're giving them the software and the systems to analyze what they have.

[00:14:53] They can also then link with us through augmented reality, and we can provide them remote assistance at the site. So, instead of waiting for an engineer to show up at site in a day or two, they can, through the click of a button, be getting support. The ABB engineer can get visibility to what is on the site.

[00:15:16] We can start pulling up records and information quickly, and we can start, A, helping the customer through themselves get services underway. And B, we can be more prepared so that by the time we get to the site with the engineers, they've got a good understanding of what's at the site. They know which equipment's needed, and there's not a lot of back and forth before any kind of intervention or action can happen at the site.

[00:15:46] So, I think that's sort of one area of technology. I'd say in the area of artificial intelligence, there's a lot more that can make the industrial customer much more intelligent in what they have on their site and understand what's going on.

[00:16:06] We can have algorithms that start doing what I'd call the predictive side of it to analyze data and information and help them drive the intervention and also help ABB fault find and diagnose the situation that may be occurring at the site.

[00:16:27] Artificial intelligence also allows us to look at large amounts of external factors that can affect a person's site from energy providers, weather conditions, potential storms, risks of power outage, and help make decisions quicker in their energy management and also help flag for us where the customer may need help.

[00:16:54] And then finally, I think algorithms and artificial intelligence also help us provide a higher quality of service. So, the large language models can also take video information. It can help support the field engineer. It can provide information in the services report back to the customer, and it can generate reports automatically based on video feed of what a field engineer does.

[00:17:24] It can provide information in the services report back to the customer.

[00:17:54] It can provide speed. It reduces carbon emissions. It drives efficiency in the maintenance and the operations of the site, and it just brings a whole lot more information and intelligence around what's going on. And with the volatility in the world we're seeing at the moment, the reliability of energy has never been more critical. I think we've all seen examples of that.

[00:18:19] And how can industrial solutions not only meet but exceed some of the reliability standards to build trust with customers? Because we've seen a lot of big outages recently. And so, I'm wondering how you better build trust with customers, particularly in supporting the adoption of renewable energy as an alternative too. Yeah, no, you're right. We've seen some massive outages.

[00:18:41] I mean, if we look at the grid situation earlier this year in Spain and the outages into southern Europe, we can look at the transformer fire at Heathrow and just the huge impacts that these events have. And grid outages aren't just in Europe.

[00:19:02] Earlier in the year, at the start of the year, we saw massive outages in Chile, which impacted mining infrastructure as well as commercial air travel in the country as well. So, these outages and keeping the lights and the power on are becoming more prevalent and are having significant impact, not just on industry but as society as a whole.

[00:19:31] The number one thing for most countries now and most customers is that energy security. So, there's this energy trilemma that most people are faced with. One is around the ability of power and the security of that power. The second one is around the cost of the power. And the third one is around the sustainability of the power.

[00:19:55] So, we see this push and drive for more energy straining grids and new energy sources continue to put pressure on grids. And as that happens, we're also seeing other industries drawing more from grids.

[00:20:14] And we've seen the implementation of AI and AI data centers where a standard server rack is going up from a factor of 20 to 30 times what it is today to where it's going to be by 2030. So, we see huge pressure on the sustainability and the maintenance of grid operation and security going forward.

[00:20:44] So, I don't think there's any doubt about that. What we're seeing now is that customers, both at the utility level but even behind the meter at their industrial sites, are taking action to ensure their energy security.

[00:21:00] And one thing that we've done in ABB is offer new as-a-service models and particularly around energy storage so that customers can have a buffer between what goes on in the grid and their supply and takes control of that with energy storage on their site.

[00:21:22] And provide stabilisation through an outage or able to take use of that energy storage and trade power and drive a little bit of profitability and funding back to the business when energy prices are high and they have excess storage and capacity on their site. So, this year we launched battery energy storage.

[00:21:45] It enabled industrial sites to put up to storage that can go up to eight hours of storage on a site. It could be financed for a customer. It could be self-fulfilling as far as energy security but also from a profitability standpoint. And it can help them slash energy costs in storing when energy costs are cheap and then discharging when energy costs are high.

[00:22:15] But most importantly, providing energy costs are high and then discharging when energy costs are high and low-end-free. So, it's been one area that we've seen a lot of uptake from customers this year.

[00:22:29] And one area in particular where we drive things like artificial intelligence to maintain the asset, optimise the maintenance on those kind of assets and also trade power back to the grid at the optimum time to drive cost efficiency and return on investment as customers take control of their energy and their energy security.

[00:22:56] And earlier this year, ABB also launched BESS as a service. So, what role do you see that playing in shaping how industries transition to more sustainable operations, let's say? Because it's been a big year for you guys, hasn't it? Yeah, Neil, I mean, you know, electrical power is growing nine times faster than any other energy source in the market.

[00:23:22] And so, when your core business is electrification, we have to build offerings and build solutions and capabilities that can move with that demand that industry has.

[00:23:38] And we mentioned battery energy storage as a service, not just from an energy security standpoint, but also for a stabilisation and opportunity for managing costs and managing profitability in trading of power back between the industrial user and the grid.

[00:24:03] And whilst battery energy storage at a grid scale level is continuing to roll out, the grid connection points are slow and in some cases can take years for connections to be put in place. The solution that we have around battery energy storage as a service provides the customers three main things.

[00:24:28] One, they can take action themselves and put energy storage on their industrial site behind the meter. They don't need a grid connection point to do that. It's up to them and their decision process and when to put that in. Two, we can provide capital finance to support the investment over a 10 to 20 year period so that the customer doesn't have an upfront capital cost.

[00:24:56] And three, we can offer security in both areas of insurance performance to ensure not only the way the best works and supports the operation, but in the unlikely event that anything happened to the energy storage unit and it didn't work, then the customer is financially covered for any energy losses that did occur.

[00:25:21] And secondly, on that front, we can also offer energy trading and support back to the market so the customer can take advantage of market volatility and make profit from their energy storage and provide investment opportunity recovery through their battery energy storage as a service with the outside grid as well as their own consumption.

[00:25:48] And now we are at the end of 2025. As a wrap up, as we look back throughout the year, are there any industry trends that you've seen emerging this year that maybe are here to stay next year in 2026? And any topics or areas that you see gaining traction? I'm sure you're monitoring all this very closely, but anything caught your eye? Yeah, look, I think there's a few things that are really happening in the market now.

[00:26:16] I think that the first thing is that we're continuing to see the rise in cost of power. Data centers are continuing to drive demand and demand is driving energy costs up.

[00:26:35] The increase that customers are looking for in services to partner with them to help them assess their electrical assets and provide them advisory services is something that we see more and more and being asked for support for customers and industrial customers more to assess their electrical infrastructure.

[00:27:01] And looking for opportunities to drive more energy efficiency, more output and more security. And we've spoken earlier in the podcast about how they can achieve that. So I'd say that's the first thing. The second thing that we see is many large customers are also looking for electrical safety.

[00:27:28] They want to know and they want to make sure that their facilities are safe and sustainable, not just from their equipment standpoint, but also from their people.

[00:27:41] And we're getting more and more requests around new standards around electrical safety, people understanding what upgrades they could make to make their sites more reliable and safer for their operations and for their people.

[00:28:01] And we do offer those services and we are spending more money, not just on what services we provide, but tools and services that we can pass on to our industrial customer base to make their businesses run a lot stronger from a safety standpoint as well.

[00:28:23] I think the blackouts like that you mentioned, some of the outages that we've seen and resilience of power continue to be on people's minds. And so not only from those audits, they're looking at modernization of their fleet, trying to maximize what they've got and try to minimize that carbon footprint at the same time.

[00:28:47] So modernization is definitely a growth space for us and keeping existing infrastructure running longer and performing better. And we see modernization solutions in strong demand in Asia, in Europe and in the Americas today.

[00:29:07] And so I would say that more and more modernization with onboard intelligence is helping customers make real decisions in real time and helps customers make smarter decisions and better use of their power and energy management going forward.

[00:29:27] So modernizing from basic electromechanical devices to intelligent self-diagnosing and predictive switching devices is definitely the trend going into 2026. Love that. And as many people listening will be preparing their New Year's resolutions or just planning their goals for the following year and the things that they're going to be doing different,

[00:29:52] I think one of the big pressures we're all facing right now is being in a state of constant, continuous learning. So I've got to ask, as someone that's helping lead the way here, where or how do you self-educate and keep up to speed with everything? Yeah, look, Niels, even being one of the major leaders in this space, we can't keep up with everything that's out there.

[00:30:19] So we do a significant amount of investment in universities and in venture companies and startup companies that are the leaders in niche and specific fields. So we have made significant investments in those partnerships in 2025.

[00:30:39] We spend a lot of time learning and understanding what these very innovative companies have done that complement or support some of the core research in the core electrification spaces that ABB do. And we try to apply that innovation in real world applications and give customers confidence as we support them through that.

[00:31:06] So we're trialing it, a lot of the equipment and the solutions we demonstrate in our own facilities first. We walk the talk, if you like. We experiment. We have digital training centers around the world. In fact, in late November, we opened up a large center in Dubai.

[00:31:29] And we also celebrated with some fabulous light work on the Burj Khalifa in Dubai when we did that. But we put out training facilities and intersection points between technology and customers at these digital training centers. We have them in Europe. As I said, we've just opened up in Dubai and in Singapore.

[00:31:54] And we trial and demonstrate technology in a safe environment. We digitally twin that before we take it to a customer's site and pilot at the site. But it's a great incubation area, a great learning space. And again, as I said, leveraging partners, technology innovators together with our own very large investment in corporate research.

[00:32:21] We do push the boundaries of technology and innovation. And I think it's something that ABB is really known for. And for me personally, I think that there is no way without technology and innovation that we can solve these energy challenges, these cost challenges, environmental challenges that we have today.

[00:32:47] And if we can drive more efficiency, we can drive more productivity and more speed, and we can use artificial intelligence in the right ways, we will overcome these challenges. And it's extremely exciting to do that. Well, thank you so much for sitting down with me today. We've covered so much in a short amount of time.

[00:33:08] And anyone listening wants to dig a little bit deeper on anything we talked about today, including best as a service, which we mentioned a few moments ago and keep up to speed with the latest announcements. Where would you like to point everyone listening? Yeah, look, I think the fastest way to get there is through our website, through abb.com or go.abb forward slash electrification. We're always publishing stuff.

[00:33:36] You can look on LinkedIn profiles for myself as well. We're always publishing stories, opportunities, you know, successes with customers on where we've achieved significant results. But we do like to share openly and transparently. And we do love feedback as well. So the more that we get from the market and from your listeners, the more we can continue to innovate and support industry.

[00:34:05] So I really appreciate the opportunity, Neil. Well, thank you so much for sitting down with me today. As I said, we covered so much there. And I will also include a link to the, I think it was a recent press release where ABB introduced this battery energy storage system as a service to simplify renewable energy adoption. So I'll include a link to that as well as the website.

[00:34:29] But I just love what you're doing here, especially with the integration of AI, digital energy reliability, the role of technology and ecosystem strategies. So everyone listening, I urge you to check that out. Get back to me. Let me know your thoughts. But more than anything, thank you for starting this conversation today, Stuart. Yeah, thank you, Neil. I hope you have a great rest of the day. So where does today's discussion leave you when you think about your own energy strategy?

[00:34:56] I think Stuart's perspective shows how much is possible when companies shift from all full replacement to maybe something more realistic to smarter modernization and tapping into predictive maintenance and taking ownership of their energy security rather than just waiting around for the grid to catch up. And the standout reminder for me is that progress does not always come from massive capital projects. Sometimes it comes from just sharpening what you already have.

[00:35:26] And as we touched on the power of technology to speed up service, reduce downtime and give leaders better insight into their operations today. I think it was also interesting that AI, remote expertise and clear data, how all of these things are converging. And when they do, that's when you start to feel the shift from reacting to anticipating. And that mindset, I hope, will shape the next few years for many industrial players.

[00:35:55] But I'd love to know more about what ideas in today's episode, what they sparked for you. Did it shift how you see energy risk or maybe highlight areas where small incremental changes could have a large impact? Please share your thoughts with me about what stood out most from Stuart's insights and where you think we should dig into next. TechTalksNetwork.com.

[00:36:19] You will find a link where you can send me an audio message and also LinkedIn X Instagram just at Neil C. Hughes. But that is it for today. It's time for me to go and find another guest for your listening pleasure tomorrow. But thank you for listening as always. And I'll speak with you all again very soon. Bye for now. Thank you.