The industry sector is one of the sectors with the highest energy input in Turkey. When these sectors are analyzed, it is seen that iron and steel sector is in the first place. In this iron and steel sector, where there is high energy need, it is necessary to ensure the maximum efficient use of energy. Exergy is a term that expresses the availability of energy to the forefront in this industry. In this study, energy and exergy analysis of annealing furnace which has high energy input is done. Analysis showed that the ideal flue gas pressure was 40 kPa. Furthermore, the highest Exergy destruction occurred in annealing furnace with 63%. It was found that there is an energy need of 565 kj/kg per annealed billet. It has been proposed that the flue gas at about 200 ℃ ejected from the flue can be produced with an ideal rankine cycle of about 3 MW. In addition, it is stated that this waste gas thrown from the chimney can be used to meet the heating and hot water (domestic water) needs of the factory.