Cement is finely ground material having composition of various minerals which, when mixed with water, sand and aggregate materials form concrete. Cement provides the chemical bonds that hold the other materials together to form a dense rocklike substance. Among the minerals, clinker is the main ingredient, which is converted to cement by grinding with gypsum, and natural pozolana mainly pumice. To produce this highly consumed good it requires an enormous amount of energy both thermal (fuel) and electricity. Researches show that up to 40% of the total production cost of cement is attributed by energy and a significant source of greenhouse gas, accounting for about 5% of the annual global anthropogenic carbon dioxide emissions and process energy loss during the clinker production. Clinker production needs enormous amount of thermal energy and it is in this process where various energy losses occur so that it gives opportunity to evaluate energy conservation opportunities. This can be accomplishing by conducting Energy Audit for estimation of process thermal loss and calculation of the amount of heat that can be trapped for waste heat to energy conversion. To accomplish these objectives, data is collected from several sources, including plant instrumentation, field measurements (using a portable stack gas analyzer, infrared thermometer, anemometer etc.), and plant records. These data are surface temperature in preheater, kiln and cooler, hourly consumption of coal and hourly feeding of raw meal, kiln feed to clinker factor, exit gases temperature and pressure and air flow to cooler from forced draught fans. Kiln system is a unit which consumes thermal energy in cement industry. Habesha Cement Factory uses coal to produce the required thermal energy. And using the collected data a detail audit conducted such as performing an energy and mass balance on the system and the specific energy consumption was 800kcal/Kg clinker. From the energy balance the main area of heat losses are the exhaust gas, the hot air from clinker cooler and from kiln surface, which are 824.34, 345.71 and 162.47KJ/Kg of clinker respectively. To minimize the energy loss waste heat recovery (waste heat to power) conversion from exhaust gas and clinker cooler hot air exhaust are taken as the conservation measures. The waste heat is utilized using waste heat recovery boiler for production of steam which will expand in steam turbine for power generation. A total of 20325960Kwh will be saved annually and emission reduction of 17465tCO 2 annually will be achieved.