This paper presents development of variable speed generation (VSG) system with energy saving function. The rubber tyred gantry crane (RTGC) requires the power from diesel-engine. Significant fuel savings by reducing the engine speed can be achieved, because all of operation modes except hoisting are required lower power than rated value of engine. When low speed operation output voltage of generator is decrease until acceptable range of motor driver inverters and auxiliary load supplier. According to power demand engine speed is varying from 20 to 60Hz, and voltage is varying between 210Vac and 480Vac. When idle mode or low power operation dc/dc converter operates by constant output voltage control and inverters dc site voltage is compensated by it. This paper proposed 3-phase interleaved boost converter which has the same structure as the commercially available 3-phase inverter and current sharing capability. 400kW interleaved converter is designed and a performance of converter is evaluated through several experiments with a RTGC system. Energy saving VSG system can cut down fuel consumption by 36% and 21.3% at idle and unidirectional load operations.