Green Partners

District Energy Integration

In an integrated steel mill like China Steel Corporation (CSC), a large quantity of by-product fuel gases (COG, BFG, LDG) and high-temperature waste heat is generated. To fully utilize these fuel gases and waste heat, CSC since establishment has implemented combined heat and power (CHP) to suffice the demand of energy based on the characteristics of production processes. However, it is not possible to constitute an ideal case for efficient CHP simply inside a steel mill, as the most efficient CHP requires an integration of various industries within a specific district.

CSC’s oxygen plant, for another example, produces O2, N2, and Ar simultaneously with air separation units. The demand of the steelmaking process for O2 is significantly larger than the other two, making O2 the main product of the oxygen plant while the other by-products. In general, Ar can be effectively used in the steelmaking process, yet N2 cannot be fully utilized. To eliminate waste, it is crucial to integrate the demands of neighbouring factories in the industrial park for complementary use of resources.

On the other hand, besides natural gas and fuel oil, CSC also recovers steam condensate and purchases crude hydrogen and waste fuel gas from neighbouring factories.

The Linhai Industrial Park in Kaohsiung City hosts CSC and various factories. CSC has been promoting the District Energy Integration Plan (the Plan) since 1992. The Plan not only increases energy efficiency but also reduces resource consumption and pollutant emissions in the region. As the environmental quality is improved, the Plan brings substantial benefits to the economy, the environment, and the society.


The Plan is implemented by CSC since 1992. Later that year, a drought struck Taiwan, the petrochemical factory of LCY Chemical Industry Corporation (LCY) faced severe shortage of steam. LCY even had to transport water from Dashu at 20 km away to avoid production halt. However, the threat of production halt still stood. LCY finally approached the adjacent CSC. Therefore, in the right place at the right time and with great endeavouring, CSC and LCY reached consensus on steam supply within three months.

Since the first steam supply to LCY in 1993, the Plan has attracted more participants in the Linhai Industrial Park, including China Petrochemical Development Corporation and CPC Corporation, Taiwan. However, the original design of the Park did not reserve for utility networks. Pipelines from CSC to these factories have to cross public roads and a 60 m-wide water channel with underground culverts and pipeline bridges, owned by different parties, to reach the destinations located 1 to 5 km away. A critical work for establishing distribution networks is therefore the construction of pipelines and the acquirement for the permissions of passing the roads. With the collaboration of public sectors, engineering units, contractors, and CSC, the 32 inch main steam pipeline in CSC and 6 to 24 inch distribution pipelines to the customers are installed. The length of steam pipelines measures at 20 km.

District Energy Integration – steam networks.

In addition to steam, industrial gases including O2, N2, and Ar are also important items in the Plan. The length of the industrial gas pipelines totals at 15 km. With the pipelines of customers, N2 can even be transported to another industrial park 20 km away.

The cumulative investment on distribution networks totals at more than USD 50 million.

A critical challenge besides infrastructure and pipeline networks is to attract new customers. CSC made considerable efforts communicating with potential customers regarding the exceptional quality, stability, and reliability of CSC’s by-product energy. For customers, the Plan assists in reducing cost in energy, land, and equipment, as well as lessening complications in safety and environment. Not only the competitiveness of customers is increased, their capability to adapt to climate change is also enhanced.

Given the remarkable performances of CSC, the Industrial Development Bureau of the Ministry of Economic Affairs (MOEAIDB) launched the “Industrial Park Energy and Resource Integration” plan for nation-wide eco-industry development.

District Energy Integration was easier said than done. Its benefits were evident on the economy, the environment, and the society. For implementation, however, complications and challenges arose with various liabilities and interests of all parties involved. It was only with years of communicating and engaging with governmental authorities and customers that CSC brought the Plan to success.

Major communications and outreaches are listed as follows.

  • Helps MOEAIDB to launch the “Industrial Park Energy and Resource Integration” plan.
  • Collaborates with public sectors, engineering units, and contractors for the planning and construction of pipeline networks.
  • Hosts or assists meetings to communicate the benefits of District Energy Integration with the government, industries, the academia, and NGOs.
  • Investigates the demands for steam and industrial gases in the industrial park for the most efficient match of utilization.
  • Negotiates and offers long-term, favorable contracts to individual customer.
No. Company Sold outside energy Starting date Remarks
1 China Steel Chemical Corp. Coke Oven gas (COG), Steam, Plant Air, N2, Demineralized Water (DMW) 1992.11 CSC Group
2 LCY Chemical Corp. Steam, N2 1993.12/1994.12  
3 CPC Corp. N2, Steam 1994.07/2009.12  
4 Tang Eng Iron Works Co., Ltd. N2, O2, Argon / Steam 1997.03/2005.10  
5 C.S. Aluminum Crop. N2, Argon / Steam 1998.07/1999.06 CSC Group
6 BOCLH Gases N2 2000.03  
7 China Petrochemical Development Corp. Steam, N2 2002.07  
8 Sheng Yu Steel Corp. Steam 2004.09  
9 Taiwan Chlorine Industries Steam 2004.09  
10 San Fu Gases N2 2005.11  
11 China Steel Machinery Corp. NG 2006.11 CSC Group
12 Shang Chen Steel Steam 2010.09  
13 China Steel Express Corp. Shore Electricity 2012.10 CSC Group
14 Hung-Li Steel Corp. Steam 2013.07  

District Energy Integration milestones.

The energy sales trend is shown below. For steam, the decrease from 2013 to 2014 was due to the dropped demand as users were affected by poor economic climate. For 2009, the sales of steam decreased due to the financial crisis, however, the sales volume increased from 1.87 million tons in 2008 to 1.94 million tons.

District Energy Integration performances – energy sales growth.

With all the efforts above, the customer base expanded to 14, and the steam sales volume marked record high of 2.5 million tons in 2012. Recognized by the government, customers, the academia, and NGOs, the Plan has been exemplary at last.The sales drop from 2013 is mainly due to the global recession while in 2015 together with energy price drop.


The Plan assists in the ultimate goal of sustainable development by demonstrating high efficiency, low pollution, and high value. By reducing production cost, pollution, and GHG emission, the Plan provides a solution to sustainability while stimulating economic development and green competitiveness of industries. Tri-wins are thus created for the economy, the environment, and the society.

CSC has long contributed to the plan and has seen remarkable results. The Plan creates USD 100 million in revenue and significantly elevates energy saving performance from outside boundary.

In 2017, the 1.683 million tons of steam sales saved 129,000 kL low-sulphur fuel oil. In terms of emission reduction, it is equivalent to annual reduction of 386,000 tons CO2, 1,230 tons SOx, 853 tons NOx, and 121 tons particulates. External CO2 emission reduction by steam sales over the years is shown in the graph. The decrease of external emission reduction from 2013 to 2016 was due to the dropped sales.

In the social aspect, jobs are created and governmental tax revenue is increased as the neighboring factories benefit cost reduction from the utilities. With dangerous equipment, such as boilers, removed, occupational incidents reduced for customers. In addition, the CSC steam is used for heating the water in the CSC Group Employee Dormitory and the swimming pool, which is also open to the local community at a moderate fee.

The benefits for the three aspects are summed as follows.

  • Environmental aspect
    2017 Emission reduction
    CO2 386,000 tons
    SOx 1,230 tons
    NOx 853 tons
    PM 121 tons
  • Economic aspect
    Annual revenue of USD 100 million.
  • Social aspect
    1. Cost reduction for neighbouring plants about USD 50 million.
  • 2. Consequently increase
    (1) Competitiveness of neighbouring plants
    (2) Governmental tax revenue
    (3) Jobs
    3. Consequently decrease occupational incidents for customers.
    4. 6,126 tons of steam for the CSC Group Employee Dormitory shower water and the swimming pool.
    (1) 2017: about 1,000 tenants in the dormitory (Monthly rent NTD 650/person)
    (2) 2017: about 55,000 entries of swimming pool (NTD 50/employee; NTD 90/guest)
    Remark: NTD 30 ≈ USD 1

Future Prospects

The forthcoming energy shortage of the 21 century demands resource exploration and usage conservation. Through the District Energy Integration Plan, CSC transforms by-product fuel gases and waste heat to valuable resources and shares with other industries for efficient use. In addition to local benefits for the community, it provides a globally applicable solution to a sustainable future.

For the next step, CSC will support government policies to expand the success of energy integration by acquiring new customers, offering more utilities, and establishing extended networks. CSC expects to extend the coverage of integration to include the Kaohsiung City Southern District Waste Management Plant (MSW incinerator) and the perspective Dalinpu Industrial Park. In addition to steam and industrial gases, CSC will develop high-value applications for other by-product energy. An on-going project uses of advanced anaerobic fermentation technology to produce high-concentration ethanol from BOF gas.

In line with the international practices, CSC will continue the endeavours in R&D and implementation of energy saving, emission reduction, waste minimization, and resourcilisation for sustainable development.

Energy Saving Service

CSC Energy Saving Service Team was formed in 2007 upon the call of the Bureau of Energy. Through vertical integration and horizontal coordination, the Team enhances energy conservation of the Group and provides services for customers. In 2017, CSC also assisted Kaohsiung Energy Conservation Service Group to provide energy-saving technology counseling services in Taiwan Fu Hsing Industrial Co., LCY Chemical Co.( Linyuan Site), Ursine Steel Co., Tongtai mahine & tool Co., Green Environment engineering Inc., Hanlin Environmental technology Co., Li Ta farm animal Industry Co. and Howard Plaza hotel Kaohsiung.

Construction of an Eco-Society

Upon the call of EPA and Industrial Development Bureau, CSC expanded the industry ecological network inside and outside of Linhai Industrial Park to ensure effective recycling and reusing of industrial waste. In 2017, the CSC-centered industry ecological network included 20 enterprises, mostly traditional industries, including recycling industries for BF slag, BOF slag, sludge, waste oil, zinc dross, waste acid, and refractory. CSC will continue promote industry ecological network to reutilize waste from Linhai Industrial Park so as to improve operating condition and competiveness and to follow the global trend of sustainable development.