Industrial pump inefficiencies: the hidden cause of cash and ESG leaks

Optimising energy efficiency through retrofits is far less intrusive and typically boosts reliability.

Although wholesale electricity prices declined in many countries in 2024, prices remain significantly above pre-COVID levels in most regions except the US. 

In Southeast Asia, electricity tariffs have been elevated since 2023. Across Singapore and the Philippines, industrial/commercial tariffs rose by approximately 5% to 7%, whilst Malaysia is planning a 14.2% electricity rate hike in mid-2025 to support grid infrastructure. In Indonesia, despite historical industrial subsidies, the removal of household discounts and subsidy reforms are expected to raise energy prices. 

With the energy crisis continuing to squeeze the margins of many operators, there is a refreshed interest in investigating areas for efficiency savings. A new World Bank report states energy efficiency investments could save a typical middle-income country up to $11.6b by 2050, with returns of $3 to $5 per dollar invested, whilst ensuring reliable energy, economic growth, and job creation.

Meanwhile, ESG (environmental, social, governance) pressures and rising carbon taxes are further prompting the urgent need for energy efficiency, influenced by factors such as policy changes, economic activity, and the energy transition. Improving efficiency measures could not only immediately lower costs but also protect against future energy price spikes and higher carbon taxes.

Carbon, electricity costs, and ESG pressures, are rising
Carbon pricing and sustainability regulations in Asia Pacific are significantly influencing long-term operating costs. Singapore’s carbon tax rose fivefold from $3.90 (S$5)/tonne in 2019 to $19.49 (S$25) in 2024 and will reach $38.98 to $62.38 (S$50 to 80) by 2030. 

Indonesia introduced a coal power carbon tax in 2022, whilst Malaysia and the Philippines are scaling up efforts, with Malaysia operating a voluntary market through Bursa Carbon Exchange and the Philippines launching its carbon registry and market in 2025.

Beyond emissions costs, regulatory obligations are driving demand for improved energy data and transparency. Singapore's SGX mandates climate-related reporting from 2025, whilst Malaysia, Indonesia, and the Philippines now require publicly listed companies to disclose sustainability performance aligned with global standards.

As carbon and electricity costs rise, industrial operators face increasing pressure to reduce carbon intensity annually. Integrating renewables, implementing carbon capture, or investing in innovation must be balanced with profitability and societal expectations.
Such investments are most effective when plants operate efficiently from the outset. Yet, whilst many operators are pursuing innovative efficiency projects, pumps are often overlooked, representing millions of dollars in missed efficiency savings each year.

Common misconceptions surrounding pump operation and efficiency
Operators often first review large equipment like boilers, compressors, and turbines for efficiency savings. However, smaller equipment such as pumps can also yield significant savings, especially when considered holistically across a plant or pipeline. Pump inefficiency additionally impacts ancillary equipment like valves and piping.

Operators aware of inefficient pumps often assume replacement is the only solution, dismissing improvements due to high capital costs - which include all the new pipework and infrastructure required. This makes the long payback period seem unattractive. 

However, retrofits can now offer substantial performance, cost, and carbon savings with improved reliability at a fraction of the expected costs. With rising industrial energy costs, the economics have also shifted. Many improvements now deliver stronger returns, with payback periods in some cases under two years. 

Longer payback periods are also becoming more viable, especially in countries with rising carbon tax regimes. In Singapore, an inefficient 500Kw BB4 pump running for 7,000 hours will consume around 3,150 MWh of electricity whilst producing roughly 1,480 tonnes of carbon emissions. 

At current rates, this pump would incur around $42,980 (S$55,125) per year in carbon tax - a cost that could nearly triple to over $120,346 (S$154,350) by 2030. When combined with electricity costs (currently at $0.226 [S$0.3065/kWh] in Singapore) the total annual operational expense for an inefficient pump becomes significantly higher. 

In this environment, combined with energy savings, retrofits that once failed internal thresholds may now be more commercially attractive. 

Many operators are also unaware of pumps operating in limited or constrained modes, particularly when they lack access to advanced analytics tools for real-time monitoring against original design. 

Pumps run reliably and efficiently when within their Preferred Operating Region (POR) and maintained routinely, but operation outside POR reduces reliability and energy efficiency, similar to running a car engine constantly at high RPM, causing excess wear and poor fuel economy.

The multi-million-dollar ESG & pump efficiency opportunity 
A global study found that 10% of industrial pumps could each save over $100,000 annually if operated efficiently, with another 25% averaging $50,000 savings per year.

The study found that average savings per pump was $28,000 annually, but larger pumps could save up to $500,000 each. 

Opportunities were greatest in sectors facing frequent fluid handling changes whilst relying on utilising existing equipment to keep capital costs down, which lead to inefficiencies. Here, retrofitting pumps through hydraulic re-rates instead of full replacement would be comparatively more effective.

Similarly, operators in power generation, water/wastewater, and other industries could realise aggregated annual savings of hundreds of thousands to millions of dollars. For example, an audit of a Pakistani pipeline operator’s BB3 multistage pumps revealed a potential saving of up $500,000 a year from just four pumps.

Fast wins: where to start today with pump efficiency
Whilst full-scale energy efficiency upgrades at plant level can take months or even years to complete, small interventions like optimising pump performance can offer much quicker returns. With volatile electricity costs, rising carbon prices, and ESG pressures, it’s a prime time to take action.

Many operators are already digitalising, adding sensors to critical equipment. Where pump data exists, assessing all pumps holistically or applying the 80-20 rule - focusing on the 20% of pumps consuming 80% of power - is optimal.

For pumps without instrumentation due to cost or complexity, signs that a pump might be operating outside its preferred operating region might include: the consumption of 10% to 15% more power than designed, non-corrosive API pumps failing within two to three years, or pumps experiencing frequent seal failures or leaks.

From data to action: building a holistic ESG-friendly pump strategy
For operators that do not have resources to spare, partnering with a knowledgeable third party to perform measurement and analysis is a helpful first step. 

Historical data can help establish baselines and pinpoint efficiency improvements, whilst retrofit solutions could include mechanical upgrades to cut losses, surface treatments of the pumps’ volutes or impellers to reduce friction, or pump hydraulic rerating to match current processes.

Apart from being more cost effective, optimising energy efficiency through retrofits is far less intrusive, and typically boosts reliability. Once installed, the solution should be monitored to ensure it continues to deliver efficiency gains.

For example, in a Southeast Asian case, the modernisation of two inefficient boiler feed pumps through redesigned hydraulics and upgraded coatings improved pump efficiency by 5%, saving $559,340 annually in energy costs and reducing carbon emissions by about 172 tonnes per year - all with no downtime due to the modular retrofit approach.

Performance with purpose: where profitability meets ESG
Pumps present a significant energy efficiency opportunity, potentially saving operators hundreds of thousands or millions of dollars annually. Whilst sensor data best identifies inefficiencies, physical indicators like leaks, failures, and high energy consumption also reveal issues. 

Instead of equipment replacement, cost-effective retrofits deliver substantial performance gains, boosting profitability, supporting ESG goals, and futureproofing operations.