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IE regs drive EU motors market towards $6bn

30 January, 2014

Sales of electric motors in Western Europe were worth $5.16bn in 2013 and will reach $5.94bn in 2017, according to a new report from Frost & Sullivan. It says that sales are being driven by users replacing old motors by newer, more efficient machines with lower operating costs, and by the impeding enforcement of the second phase of the EU’s motor energy efficiency regulations (640/2009/EC).

The first phase of the energy-efficiency directive was implemented in 2011. The second phase, which requires induction motors with output powers from 7.5–375kW to meet the IE3 standard – or to meet the IE2 standard and be used with a variable frequency drive – is due to take effect in 2015.

“This means that end-users, who need to replace their old and obsolete motors, will be forced to purchase IE2 or IE3 energy-efficient motors that cost 25–37% more than IE1 or less energy-efficient motors,” says F&S industrial automation and process control research analyst, Abhinav Nagial. “While the sales of higher-priced IE3–class induction motors are expected to boost revenues, the economic scenario might dampen market potential.”

The recent economic downturn and the ongoing debt crisis in Europe have slowed down industrial activity, F&S adds. Stagnation in mining, construction, shipbuilding, chemical and petrochemicals projects has hit the demand for large medium-voltage motors, in particular. Although the steps taken to tackle the debt crisis are encouraging recovery, it is unequal across the different countries in Western Europe.

Another challenge for the region’s motors market is the lack of funding from private and public institutions, because key end-user segments – including chemical, petrochemical, oil and gas and process industries – depend on the availability of credit for implementing new projects. End-users in Italy and Spain are particularly reluctant to invest because they face high unemployment rates and political uncertainty.

“Given these challenges, manufacturers of electric motors should charge competitive prices and offer value-added services to differentiate themselves from the competition,” Nagial suggests. “Strategic pricing of higher-efficiency motors will be especially important to succeed in the Western European marketplace.”

Industrial electric motors consume about 70% of the energy produced in Europe. And the power consumed by a motor over its life accounts for about 85% of its lifetime costs.

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