Considering the huge potential of energy saving in the renovation of medium voltage and low voltage distribution network, the energy saving benefits of four methods are analyzed and quantified from three perspectives, including replacing power equipment, using energy saving technologies and improving power qualities. Then, the life cycle cost model of this project is established and the economic benefit evaluation is carried out through net present value, internal rate of return and dynamic payback period. Finally, a practical example in Shandong Province is calculated. The result shows that it is suitable for investment through these economic indicators, which indicates that the model established in this paper can provide reference for the economic benefit evaluation of the energy saving project.