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Energy efficiency

Energy-saving technologies in production processes

NLMK Group is committed to making products of the required quality as cost-effectively as possible. To achieve this, the Company is running operational efficiency programmes, which include the introduction of energy-saving technologies in its production processes. One of the Company’s priorities in its commitment to decrease energy expenses within the product cash cost and reduce its climate footprint is improving the energy efficiency of production during the Strategic Development Cycle.

Results

Key events in 2020:

In 2015, NLMK Group implemented a number of projects to enhance energy efficiency. The projects delivered the following gains:

Stoilensky Mining and Beneficiation Plant completed the construction of Main Step-down Substation No. 15 (MSDS-15) at its open-pit mine. The substation generates electricity to power mining machinery, traction units, and drain well equipment.
In 2020 the NLMK Lipetsk CGP completed an investment project to replace the regenerative air heater (RRAH) at Boiler No. 12. Annual gains from increasing the efficiency of Boiler No. 12 by replacing the RRAH are estimated at RUB 54 million, which is 1.8 times more than the planned gains.
Construction of Basic Oxygen Furnace No. 3 was completed at BOF Shop No. 2 at the Lipetsk site. The technical solutions used in the equipment of BOF No. 3 will enable the collection and recycling of BOF gas at the RCGP No. 2, which is currently under construction.
The fourth recovery CGP power unit was launched, with a steam turbocharger for the air blast supply at BF-7.
A 220 kV substation was commissioned at the Revda plant (NLMK Ural).
Optimizing energy resource supply schemes enabled NLMK Lipetsk to halve its purchases of thermal energy in hot water, while the use of co-generation plants at NLMK Ural decreased thermal energy purchases by more than 15 times.
In 2020, 85 energy efficiency projects were implemented at NLMK Lipetsk as part of the energy efficiency improvement part of the Optimization Programme. The Company is currently monitoring the efficiency and overseeing the implementation of over 280 energy-efficient optimization projects.
Supplies of medical oxygen from NLMK Lipetsk to clinics and hospitals in nearby regions reached record highs amid the COVID-19 pandemic.
In 2020 total gains from implementing the energy efficiency improvement part of the NLMK Group Optimization Programme amounted to approximately RUB 670 million.

Energy performance of the main production site in Lipetsk:

5.546 Gcal/t — purchased energy consumed to produce 1 tonne of steel in 2020.
63.7 % — self-sufficiency in electric energy.
506.6 MW — daily-average record in energy generation at captive facilities.

NLMK Group completed dozens of large-scale capex project to boost energy efficiency. Since 2008, NLMK Lipetsk’s actual specific energy intensity decreased by more than 16%. Further development of its energy facilities will enable the Company to come very close to the industry level of best available technologies, considering the climate zone where it is located.
At NLMK Lipetsk, captive generation using secondary gases reached approximately 80%. Altai-Koks generates 100% of its energy using secondary gases from coke and chemical operations. In addition to reduced energy and production costs, such initiatives help the Company to minimize its environmental footprint.
NLMK Group continues to implement projects to integrate green energy facilities at the Lipetsk site, such as the construction of a power plant for secondary fuel gas recovery with a system of BOF gas collection and storage. Once the plant with installed capacity of 300 MW is commissioned, the site’s electric energy self-sufficiency will increase to 94%. Previously, NLMK Lipetsk commissioned a new recovery cogeneration plant with installed capacity of 150 MW and two top-pressure recovery turbine plants, which utilize excess pressure of blast furnace gas for energy generation.