OJSC Magnitogorsk Iron and Steel Works (MMK) has taken its energy efficiency improvement initiatives to a new level.

One of the world's largest steel producers and a leading Russian metals company, MMK has announced that expenditure on low-cost energy efficiency projects with timely returns – otherwise known as 'baby capex' – grew four-fold in 2016 compared to 2015.

Baby-capex on energy efficiency improvements increased from RUB 300 mln ($5.2 million) in 2015 to RUB1.2 bln ($33 million) last year. Overall investment in similar projects for 2017 is estimated at RUB 1.5 bln.

Energy efficiency initiatives include motivating employees to suggest ideas that can drive innovation at the company, and concluding energy service contracts.

In 2016, MMK considered 390 energy-saving ideas from employees, which formed the basis for the implementation of 138 projects. Last year, MMK adopted an electronic Energy Management platform which enables employees to submit innovative ideas electronically. The platform was integrated into the Evolution mobile app last month, allowing ideas to be submitted via mobile devices.

MMK claims to be the first industrial enterprise in Russia with a successful track-record in implementing energy service contracts. Currently, it has completed phases I and II of workshop lighting modernisation, which required almost no outlay from MMK. The Russian steel giant has also implemented a major energy service project it calls Frequency Regulation System for Exhauster Drives at Oxygen-Converter Plant. The economic effect of these projects has amounted to a saving of RUB 180 mln ($3.1 million) in 2016.

MMK's Energy Policy was approved and adopted last year and it stipulates decreasing costs on energy resources as part of cash costs as a strategic goal in activities to save energy and improve energy efficiency. The key factors for achieving this goal include improving the efficiency of personnel management, motivation and engagement, as well as adopting advanced technologies.