Steel & Metal

Sector Highlights

There are many different types of industries within Metal sector in Nepal that includes both ferrous and non-ferrous metal industries. However, for the present study, mainly hot re-rolling mills and partly ferrous metal, wire drawing, galvanizing industries and sheet galvanizing have been considered (as they are dominant in Nepal).

The re-rolling mills use imported continuous cast billets to manufacture various diameters and length of iron bars to be used for reinforcing concrete structure. The billet is shared, heated in furnace and rolled using rolling mills. The wire drawing plants use the wire rods to draw them into smaller diameter wires and some of them are galvanized. These wires are used to make barbed wire; wire gabions that are used extensively used for protection of river banks and slopped land from landslides. The number of manufacturing of basic Iron and steel (re-rolling mills) industries in Nepal amounts to 17 with employment of 2405 persons (CBS, 2007).


Major processes involved in production of

  1. iron bars from billet are billet shearing,
  2. billet heating,
  3. rolling,
  4. thermo-mechanical treatment,
  5. natural cooling,
  6. cutting to length.

Process flow chart of steel rolling mill

Process flow chart of galvanizing plant

Energy Use

Main sources of energy used in the Metal & Steel industries in Nepal are furnace oil, electricity, and coal. Coal is mainly used in the re-heating furnace for billet heating. Furnace oil or diesel is also used in place of coal by some industries. Electricity supplier to the industries is Nepal Electricity Authority mostly through 66/33 kV and 11 kV supply with time of day (TOD) metering system. Iron and Steel industries are installed with heavy motors and electrical energy is mainly used for the drives of rolling mill, billet sharing, pumps, compressor, blowers and wire plant motors. Thermal energy is required for heating the billets in furnace. Source of thermal energy is coal, furnace oil or diesel. Around 50 percent of the industries use furnace oil while remaining 40 percent of industries use coal as fuel for the furnace. All surveyed units have their own DG set to supplement the power supply during power failure from the central grid. The supplies from the DG set are mainly for the lighting and maintenance activities of the industries. The production of almost all the industries is stopped during the load shedding.


Figure 2: Energy use by resource in Steel & Metal industry (GIZ/NEEP, 2012)

The 21 units of Metal industries covered by the study have a total production capacity of 713,510 tons and they produced 401,378 tons of metal product (2010/11). They consumed 59.874 million units of electricity (kWh) and thermal energy equivalent to 590,317 GJ worth NPR 1,002.6 million. The average specific energy consumption (SEC) is found to be 149.17 kWh of electricity and 1,470.73 MJ of thermal energy per metric ton. CO2 generation is estimated to be 46,015 tons, which is equivalent to 114.64 kg per ton of production.

Table 1: Specific energy consumption in Steel & Metal industries (GIZ/NEEP, 2012)

Major energy consuming sections in Steel & Metal industries are listed below

Thermal equipment

  • Coal pulverizer
  • Billet Shearing
  • Re-heating furnace
  • Rolling
  • Thermo-mechanical treatment

Electrical equipment

  • Pumping systems
  • Electrical Distribution transformer & Power systems
  • Electrical drives
  • Diesel Generating Sets
  • Compressors
  • Lighting system
  • Co-generation plant
  • Material handling equipments


  • GIZ/NEEP, 2012: Baseline Study of Selected Sector Industries to assess the Potentials for more efficient use of energy.
  • Central Bureau of Statistics (CBS), 2007: Census of Manufacturing Establishments carried out in the fiscal year 2006/07.

Energy Saving potential

Steel and Metal sector is one of the most energy intensive industrial sectors in Nepal. Out of total production value 3 % is spend for energy. By going energy-efficient it is estimated that this sector could save up to 5,522 MWh of electricity and 202,695 GJ of thermal energy (see Table). Thereby, the industries could reduce energy cost by at least 28 Crore Nepalese Rupee annually (GIZ/NEEP, 2012).

Figure 1: Monetary saving potential in Nepalese Metal and Steel sector (GIZ/NEEP, 2012)

Experience from the past have identified many energy saving options for the steel & metal sector that are highly profitable with payback periods of investment of less than 2 years. The following table shows some implemented examples option in Nepalese cement factories with the respected payback.

Energy Saving Tips

In the following energy saving tip for re-rolling mills are given listed by equipment area:

Figure 2: Improvemnte of furnace efficiency


  • Ensuring proper fuel storage, handling, and preparation, for achieving good combustion conditions.
  • Operating furnace with minimum excess air for fuel economy.
  • Operating with lowest possible stack temperature for fuel economy.
  • Monitor O2/CO2/CO ratios and control excess air level.
  • Use ceramic fiber linings in the furnace.
  • Match the load to the furnace capacity.
  • Provide temperature controllers.
  • Ensure that the flame does not touch the stock.
  • Repair damaged insulation.
  • Insulate all flanges, valves, and couplings.
  • Recover maximum heat from flue gases.

Electrical System

  • Balance kilowatt loading on three phases of supply.
  • Shift loads to off-peak times where possible (load management).
  • Minimize maximum demand by controlling loads through an automatic demand controller.
  • Correct power factor to well above 0.95 by installing additional capacitors and automatic power factor controllers.
  • Ensure that all capacitors are in line and functional, by checking charging current and fuse condition.
  • Set transformer taps to optimum settings.
  • Properly size to the load for optimum efficiency. (High-efficiency motors offer 4%–5% higher efficiency than standard motors.)
  • Check for under-voltage and over-voltage conditions.
  • Balance the three-phase power supply. (An unbalanced voltage can increase motor input power by 3%–5%.)
  • Use variable-speed drives for large variable loads.

Pumps, Fans and compressed air System

  • Operate pumps near their best efficiency point.
  • Modify pumping system and minimize throttling.
  • Reduce air compressor discharge pressure to the lowest acceptable setting.
  • (Reduction of 1 kg/cm2 air pressure (8 kg/cm2 to 7 kg/cm2) would result in 9% input power savings. This will also reduce compressed air leakage rates by 10 %.)
  • Take air compressor intake air from the coolest (but not air-conditioned) location.
  • (Every 5ºC reduction in intake air temperature will result in a 1% reduction in compressor power consumption.)
  • Monitor pressure drops across suction and discharge filters, and clean or replace filters promptly upon increase in pressure drop.


  • NEEP/GIZ-Nepal, 2012: Baseline Study of Selected Sector Industries to assess the Potentials for more efficient use of energy.
  • ESPS/DANIDA, 2000-2005: Cleaner Production report of steel and metal industry
  • Confederation of Indian Industry: Investors manual for Energy Efficiency



Energy Manager Training India – Iron & Steel sector Knowledge base and platform for energy auditors in India established by Bureau of Energy Efficiency India and supported by Indo-German Energy Program (IGEN). The webpage contains a database of industrial processes and respective energy saving measures as well as a directory of energy efficiency professionals and technology suppliers from India.

Energy Efficiency Guide for Industry in Asia – Case Studies Iron & Steel Best practices fact sheets of iron and steel industries from various Asian countries that were audited and implemented energy efficiency measures during UNEP funded project on "Greenhouse Gas Emission Reduction from Industry in Asia and the Pacific" (GERIAP) until 2006.

Industrial Efficiency Technology Database – Iron and Steel  Institute for Industrial Productivity's package of databases on technology, policy, financing and supply chain initiatives that are publicly available and offered free of charge, as part of our mandate to increase industrial energy productivity in energy-intensive sectors. It aims to help decision makers identify technologies and measures that improve productivity and profits while reducing energy consumption and CO2 emissions in industry, and assist companies in assessing the cost-effectiveness of energy efficiency investment options.