Boosting energy efficiency

To mitigate its impact on accelerating climate change, EVRAZ pursues various energy efficiency measures, which reduce the amount of greenhouse gases from operations, as well as energy and process fuel costs.

Management approach

GRI 103–2

Energy intensity forms an essential part of energy efficiency programmes at EVRAZ. In order to enhance energy efficiency and to lower energy intensity, the Group is working to enhance energy management at its assets and to engage all employees in energy efficiency issues. In 2019 EVRAZ senior management decided to create a separate function to bolster the energy management system at its production divisions in Russia. These efforts focused partially on production processes and the transportation of energy resources to power plants at facilities. They also sought to broaden the scale of the energy efficiency management approach, to include energy consumption processes at steel production workshops.

In 2020 a number of changes were made to the energy efficiency management function. Teams of energy management system experts were created at the two most energy intensive facilities, EVRAZ ZSMK and EVRAZ NTMK (which account for over 85% of the Group’s energy consumption). These teams were tasked with monitoring energy consumption, minimising energy intensity, and lowering energy costs.

EVRAZ has employed various methods for generating and proposing ideas to improve fuel and energy efficiency and to reduce energy costs. As part of the Idea Factory programme, special boxes are installed at each shop in an enterprise to collect suggestions, the best of which are then tested and implemented. Another method is problem-solving stands, which allow comments and questions from staff to be promptly collected. These tools are key in implementing a comprehensive and integrated approach to the Group’s operations, the so-called EVRAZ Business System.

In 2020 energy efficiency projects were also initiated as part of regular programmes such as the New EVRAZ Leaders (70 employees participated) and the Project Management School. All these measures are aimed at developing and unlocking the potential of the Group’s employees.

2020 results

In 2020, EVRAZ developed a comprehensive programme for building a system of full-fledged interdepartmental and unit-by-unit metering of energy resources with an assessment of the possibility of the operational impact of production personnel on fuel and energy costs in the technological process. The first stage of the programme implementation will allow to reduce by 30% unaccounted interdepartmental energy flows already in 2021.

The Group’s energy efficiency programmes are helping to achieve the goal of lowering the energy intensity of production processes. The programmes contain initiatives covering a five-year period.

The main aspects of energy efficiency programmes are:

  • optimising and minimising energy consumption and losses at production sites, including electricity, thermal energy, fuel, natural gas, and the off gases from furnaces.
  • using secondary and renewable energy sources.
  • optimising the blend of furnace charge, coking coal, and process fuel.
  • automating energy-intensive equipment.
  • implementing digital transformations of energy supply systems.

The Group also conducted an ambitious target-setting cycle, which covers energy efficiency. This relied on industry benchmarking and a review of best production practices in each technological segment to evaluate the potential for reducing energy intensity. As a result, short- and long-term targets were established and further ways to lower energy consumption were identified.

As part of its energy efficiency efforts, the Group has begun to track energy intensity metrics at all its production facilities. EVRAZ is using this new KPI to improve employee engagement and motivation. Success in the area of boosting energy efficiency also requires daily efforts to enhance the operational efficiency of equipment.

GRI 302–1

In 2020 the Group’s total energy consumption fell by 5.7% year-on-year, with energy consumption of steelmaking facilities The steelmaking facilities are represented by EVRAZ NTMK, EVRAZ ZSMK, EVRAZ Nikom, EVRAZ Caspian Steel, EVRAZ Inc. NA, EVRAZ Inc. NA Canada, EVRAZ Vanady Tula. falling by 6.0% (to 319.9 million GJ) and mining and coal assets The mining and coal assets are represented by EVRAZ Kachkanarsky Mining-and-Processing Integrated Works (EVRAZ KGOK), Raspadskaya Coal Company, Evrazruda. by 2.5% (to 31.9 million GJ).

In 2020 the key driver in the reduction of energy consumption was the implementation of a range of energy-saving measures, including the reconstruction of CHPP boilers’ gas-carrying ducts, cutting coke consumption in blast furnace operations and optimization of natural gas consumption in rolling shops due to equipment upgrades and production automation. In addition, during the reporting period, work on technological process optimization and reducing equipment downtime was carried out at the Group’s enterprises, which also had a beneficial effect on reducing energy intensity indicators.

EVRAZ total energy consumption and production output, 2018–2020 To calculate the Group’s total energy consumption, this Report takes into account all energy used at EVRAZ facilities, including for the production of coke, coke products, energy, and heat. The graphic shows data for steelmaking facilities and mining and coal assets. To compute total energy consumption within the Group, the formula given in GRI 302–1 is used (the sum of fuel consumed [non-renewable and renewable] and electricity, heating, cooling, steam [purchased for consumption and self-generated which are not consumed] minus the volumes of electricity, heating, cooling, and steam sold).
Total energy consumption of EVRAZ’ steelmaking operations and its production The steelmaking facilities are represented by EVRAZ NTMK, EVRAZ ZSMK, EVRAZ Nikom, EVRAZ Caspian Steel, EVRAZ Inc. NA, EVRAZ Inc. NA Canada, EVRAZ Vanady Tula.
Total energy consumption of EVRAZ’ mining operations (coal and iron ore) and its production The mining and coal assets are represented by EVRAZ Kachkanarsky Mining-and-Processing Integrated Works (EVRAZ KGOK), Raspadskaya Coal Company, Evrazruda.
GRI 302–3

In 2020 EVRAZ sought to reduce downtime at its production shops, which helped decrease energy intensity by almost 4.7% year-on-year. The energy intensity of EVRAZ NTMK and EVRAZ ZSMK also decreased by 10.1% versus the base year of 2018, partially due to the development of the energy management system.

Energy intensity, 2018–2020 The figure includes data on the Steel segment (EVRAZ ZSMK, EVRAZ NTMK) and the Steel North America segment (EVRAZ Portland, EVRAZ Pueblo, EVRAZ Regina, EVRAZ Camrose, EVRAZ Calgary, and EVRAZ Red Deer). To calculate the energy intensity ratio for the Group, the formula given in GRI 302–3 is used (volumes of energy consumed per unit produced). , GJ/tonne of crude steel
Note: Data on EVRAZ offices, including those in Russia and UK, are not included in the graphs, since the volume of power they use is insignificant in terms of overall energy consumption within the Group.

Steel segment

The Group is working diligently to develop and enhance its energy management system. In January 2021 EVRAZ NTMK recertified its energy management system with the updated ISO 50001:2018 standard. Going forward, EVRAZ ZSMK and EVRAZ KGOK also plan to receive ISO 50001 certification.

Based on positive lessons learned at EVRAZ ZSMK in September 2019, the event “Growth Points. Energy Efficiency” was held at EVRAZ NTMK centre of art and culture in 2020. The ideas generated during this event were aimed to improve the energy efficiency both at EVRAZ NTMK and EVRAZ KGOK.

Around 100 specialists took part in this event, including representatives from each production shop and an invited expert from East Metals AG. At the session, participants discussed the importance of energy efficiency measures in the face of rising energy costs and the worsening problem of climate change. The brainstorming session produced more than 100 ideas. Employees put forward new initiatives and adduced previous ones, for example, related to upgrading the rolling stand engine control system and implementing expert systems. A list was drawn up of all the ideas voiced, and by the middle of 2020 a number of related initiatives had already been implemented. Six pumps in the H-beams rolling shop were replaced, resulting in energy consumption being almost halved. These energy sessions are expected to be held on a regular basis, once every two or three years.

In 2020 EVRAZ NTMK completed the renovation of blast furnace No. 6 using the latest technologies, thereby making EVRAZ NTMK’s blast furnace shop the most efficient and environmentally friendly in Russia. To analyse and adjust production processes in the furnace, an expert system was implemented that, based on over 12,000 parameters, can select optimal conditions and control the melting process in automatic mode. This will contribute to operational efficiencies, including energy efficiency enhancements. The consumption of coking coal is also projected to decline.

In 2020 EVRAZ NTMK continued to install a gas top pressure recovery turbine at blast furnace No. 7. This project forms part of an initiative to reduce electricity purchases by generating energy in-house.

Case study Installation of gas top pressure recovery turbine at EVRAZ NTMK

EVRAZ NTMK is installing a gas top pressure recovery turbine, which is part of a special set of equipment, to generate energy from secondary sources. This technology makes it possible to convert blast furnace gas pressure energy into electric power without the combustion of additional fuel. The facility is being installed next to blast furnace no. 7 at EVRAZ NTMK, and itis expected to be more advanced and powerful than its counterparts, of which there are only five in Russia. The Group has spent US$18 million on this investment project, which is part of a large programme to provide EVRAZ NTMK with its own electricity. Since blast furnace gas has high energy output, the facility’s launch will boost self-sufficiency in electricity at EVRAZ NTMK (currently 75% of needs are met by own energy). In 2020 the construction of the facility’s building, electrical installation works, as well as the mounting and launch of the equipment were performed. The new turbine is scheduled to be launched in the first quarter of 2021 and it will enable EVRAZ NTMK to increase resource and energy efficiency and electricity self-sufficiency, and lower the cost of the final product. As the technology does not require the burning of additional fuel, it will contribute to an overall reduction in CO2 and other emissions, in proportion to the volume of electricity generated.

Stakeholders: EVRAZ, clients, local communities.

Value for stakeholders: resource and energy efficiency, cost of products, clean environment.

Value for EVRAZ: operational cost decrease, attractiveness for clients, sound relationship with local citizens.

Installation of gas top

Also, in 2020 the consumption of secondary energy resources was boosted following measures to overhaul power boilers No. 1, 2, 3 and 4 at EVRAZ ZSMK’s CHPP, which allowed the consumption of blast furnace and coke gases to be increased and natural gas use to be reduced, thereby achieving an economic effect of almost US$347 thousand.

Furthermore, in 2020 work on the new electrical substation’s construction continued at EVRAZ ZSMK.

Case study Completion of renovation of electrical substation no. 1.

This advanced unit is twice as powerful as the previous one installed at EVRAZ ZSMK 50 years ago. The new substation is automated and allows equipment and the network status to be remotely controlled and monitored. It is one of the largest power grid facilities at EVRAZ ZSMK, with around US$10.5 million spent on the construction project, and it supplies electricity to some shops of the enterprise (for example, the rolling, blast furnace, and oxygen shops; the new Air Liquide oxygen plant). The modern electrical substation will also increase the reliability of the power supply, cover EVRAZ ZSMK’s electricity needs for large production development projects, and also prevent downtime.

Electrical substation

In 2020, in cooperation with Air Liquide, EVRAZ ZSMK continued with the renovation of oxygen production, namely a project to build air separation units with a capacity of 90 thousand m3 / hour to ensure the manufacture of construction and railway products. The advanced equipment will be 30% more energy efficient than the previous one and will eliminate the need for expensive repairs. The total cost of the project is around US$150 million. The units are scheduled to launch in 2021.

In 2020 EVRAZ KGOK’s two rail depots underwent a comprehensive upgrade to their lighting systems, which not only improved coverage, but also reduced energy consumption by 40%.

In 2020 a modern modular compressor station was put into operation at EVRAZ Vanadium Tula. The proposal to replace the old compressor station with a new one came from the Ideas Factory initiative. The new station consumes less electricity and is cheaper to run, which makes it possible to reduce the cost of final production. The projected economic effect from introducing this station will be more than about US$14 thousand per year.

Coal segment

In 2020 a key event in the field of energy efficiency was the implementation of an energy management system at Raspadskaya Coal Company. With the help of measures in the area of production process optimisation, equipment replacement, maintaining temperature systems, as well as organisational initiatives, the enterprise increased the volume of energy consumption reduction almost seven times in 2020 compared to 2019.

Steel, North America segment

To supply electricity to the EVRAZ Rocky Mountain Steel mill, in September 2019 Xcel Energy, EVRAZ North America, and Lightsouce BP announced a long-term partnership to develop a new 240-MW solar plant in Pueblo, Colorado. In 2020 fundraising for the project was completed and construction activities began. Work on this project is being performed online until the end of building process in 2021.