Implementing Energy Efficiency Measures to Save Electricity Costs

The company's factory consumes 137 gigawatts of electricity annually, costing approximately $9 million and accounting for 40% of total manufacturing costs. This significant energy expenditure posed a substantial challenge for the company, as it limited the availability of capital for production innovations. To address this challenge, the company's Deputy Manager of the Technical Division, Mr. Tran Hung Nha, sought to prepare a sound investment report to convince the company's board to invest in energy-efficient solutions. However, his team lacked the necessary knowledge and skills to calculate and present the economic benefits of energy efficiency. This limitation hindered the development of a comprehensive investment report. The introduction of V-LEEP, a program established by the Government of Vietnam to promote low-emission growth in the energy sector, marked a significant turning point for Thu Duc Steel. Through a technical cooperation agreement with Vietnam Steel Corporation, V-LEEP provided technical support to help VNSteel companies develop and implement energy efficiency measures. Thu Duc Steel was the first project under this framework to be developed, financed, and implemented with V-LEEP's technical assistance. The energy audit conducted by the V-LEEP team enabled Thu Duc Steel to gain a deeper understanding of its energy consumption and explore energy efficiency and conservation measures. The team also helped calculate the associated financing requirements, which informed the development of a detailed investment report. This report ultimately convinced the company's board to invest in energy-efficient solutions, including the purchase of four new steel rolling mills. The new rolling mills, which cost approximately $400,000, belong to the 630 kilovolt – 600 Direct Current series and replace the existing equipment. The new equipment is expected to save the company $66,000 per year, comprising $35,000 from reduced electricity costs and $31,000 from manufacturing cost savings. Additionally, the new rolling mills will help reduce 446 tons of carbon dioxide per year. The simple payback period for this investment is less than two years, making it a financially viable decision for the company.