Saving billions of dong by reducing energy costs

Archived article. Job titles, figures and savings describe the cases at the original publication date and are not performance guarantees for other facilities.

The first steps at Thien Tri Paper

The first reported result at Thien Tri Paper Production and Trading Co., Ltd. in Hoc Mon was a 15% reduction in electricity at the start-up stage of its hydraulic waste-paper pulper. The company had agreed to buy Power Boss equipment using funds advanced through a project run by the Ho Chi Minh City Energy Conservation Center. Director Nguyen Van Thu said energy represented about 16% of product costs; the company had wanted to reduce that share but had not known where to begin.

Reported reductions of 15-20%

Nguyen Van Thu described the effect as immediate when comparing the pulping-stage readings before and after the Power Boss installation.

Following that result, Thien Tri's management commissioned an energy audit covering its offices and production processes. Straightforward actions were taken first, such as improving openings for daylight and replacing fluorescent lamps with compact lamps. Higher-investment measures were introduced gradually, including energy-saving equipment for winding machines, pumps and paper machines. The article reported electricity-cost reductions of 5-15% at individual stages.

Thu explained that the company had previously made losses or broken even, but that lower electricity costs had helped it begin to make a profit.

Heat recovery investment and reported cost results

The boiler-related measure required a larger investment: VND 300 million for a heat-exchange tower addressing heat and flue-gas dust. The article reported monthly production of 1,000 tonnes of paper and energy expenditure of VND 700 million, equivalent to VND 700,000 per tonne. It stated that the tower reduced the monthly bill by 5%, or VND 35 million, and that the investment was recovered in less than a year. These are the historical figures reported for that installation.

The article put Thien Tri's energy-cost share at 16% before the improvements and 14% afterwards. It reported that the two-percentage-point reduction corresponded to VND 140 million a month, or more than VND 1 billion a year. These reported figures refer to the original company's accounting context and should not be treated as a savings forecast for another facility.

The Hoang Huynh Brewery case

At Hoang Huynh Brewery in Binh Tan District, an energy review identified refrigeration and steam boilers as major users. Consultants recommended moving from manual to automatic operation. The company installed variable-speed drives in refrigeration and insulated boiler-system valves and joints. Deputy Production Director Nghiem Xuan Tung reported immediate savings of up to 20% in the two areas discussed.

Finding waste through energy audits

To achieve practical savings, businesses such as Thien Tri and Hoang Huynh first identified weaknesses in their energy use through an energy audit.

The Ho Chi Minh City Energy Conservation Center had audited 600 businesses over the five years covered by the report. Nguyen Thi Ngoc Tho, then head of its technical-consulting department, said only three of those companies, or 0.5%, had highly efficient systems, and all three were foreign-owned. The report described waste in the remaining 99.5%, often at several production stages. She emphasised that turning audit findings into efficient operation depended on people as well as energy-saving equipment.

People and energy policy

Nguyen Van Thu said the company explained three benefits of energy saving to all employees: stronger competitiveness, more stable company income and better employee livelihoods. Over the three years described, Thien Tri had allocated 60% of the savings from lower electricity costs to pay increases and bonuses. From May 2010, management also introduced electricity-consumption benchmarks, rewards for savings and penalties for waste. Employees attended energy-management courses and shared what they learned with colleagues.

Energy management at the Continental Hotel

The Continental Hotel established an energy-management committee of 14 people, including senior managers and department heads or deputies, and adopted an energy policy. It set consumption benchmarks for each department and monitored and evaluated results using energy-management software. Performance was then considered in annual recognition and reward decisions.

Deputy Director Dao Hoang Lien compared the hotel's energy costs over two years. After the policy was introduced, the following year's costs were more than 19% lower, improving the hotel's financial results. Her conclusion was that reducing energy costs, including electricity costs, required commitment and action from leadership to succeed throughout the organisation.