Policy Details

Establishment of Energy Conservation Services Companies ( Ministerial Regulation No.14/2016)


Year started: 
In Force
Ministry of Energy and Mineral Resources

This regulation is intended to accelerate the implementation of energy efficiency projects by the establishment of ESCOs. In return, ESCOs are expected to carry projects more systematically and professionally. 

The following table provides a summary of the regulation: 

Definition Services provided by ESCO Business Scheme Requirements to Establish ESCO Detail on ESPC (Energy Services Performance Contract) Reporting Obligation by Certified ESCO Monitoring and Assistance
Energy conservation is a systematic, well planned, and comprehensive efforts to conserve energy resources as well as increasing its efficiency use Defining and planning the concept of energy efficiency project Guaranteed Saving; this scheme will be carried by the ESCO by giving the guarantee on the energy saving volume which stated in the contract The ESCO should apply online to the Minister through the Director General with showing the proof of: the company establishment permit (SIUP); having minimum one energy conservation expert which has an energy auditor certificate; a list of supporting equipment; and verified/audited financial capability The registered ESCO should provide the ESPC for their users which contains:  The registered ESCO is obliged to report annually (with the report form provided within the regulation) their activities to the Minister through the Director General at the end of the year The Directorate General will give the assistance to the ESCO by scaling their performance and giving technical assistance as well as monitoring their activities 
Energy Conservation Services Business is the activities on planning, implementation, operation, maintenance, measurement, and verification in the energy conservation business Energy auditing with investment grade standard Shared Saving; this scheme will be carried by ESCO by sharing the benefit of energy saving between the user and ESCO according to the ESPC. The payment will be made by the ESCO as agreed in the ESPC The Minister through the Directorate General will verify the ESCO fulfilled application at least 14 days after it lodged  and may accept or refuse their application by sending them the notification the detail of services that being offered If the registered ESCO did not report, the Director General may give the sanction by written warning and annulled their permit after 4 months if they did not response to the warning  
Energy efficiency is an effort to use energy with the most efficient way without reducing its comfortability, safety, and productivity Financing the energy efficiency project   The Director General will give the Registered Letter for the accepted ESCO for 5 years duration and published it on the newspaper. The ESCO may ask the extension if it almost reach its duration due date the detail of the installed or retrofitted equipment with its specification    
Energy efficiency project is the implementation of one or some energy efficiency activities in the energy user process, facility, and system  Installing the appliances for the energy efficiency project     the specification for the instalment and commissioning    
Energy efficiency project concept is the result of preliminary energy audit which stated the projection on energy cost saving from energy efficiency activities  Operating, maintaining, monitoring, and  repairing the appliances      the agreed baseline that will be used for the payment purposes    
Energy saving is the reduction of energy consumption to produce a same output value or the increasing of productivity with the same energy consumption volume Measuring and verifying the energy efficiency performance     the energy saving calculation methodology    
Baseline is the starting point of energy performance, energy cost, OM cost, or other cost that being measured and agreed before implementing the energy efficiency activities to define the size of the saving       the measurement and verification on energy saving performance and its operation and maintenance    
Measurement and verification  of energy saving performance is the measurement and verification process to compare the energy use before and during the Energy Saving Performance Contract (ESPC)       the payment term and conditions by the user    
Energy Conservation Services Company which later on called as an ESCO is the business entity based on Indonesia law who doing the energy conservation services in the energy efficiency project based on ESPC       the assets ownership right if the ESCO using the sharing saving scheme    
The User is an individual or a company who use the service of ESCO       the procedure to address the failed project    
ESPC is the agreement between the user and the ESCO in which the payment which stated in the ESPC will be paid regularly according to the energy saving performance       the responsibility procedure on the energy saving  miscalculation for the saving guarantee scheme    
Energy conservation expert is someone who has knowledge, capability, and experience in energy efficiency project as well as having a energy auditor certificate so they can identify energy conservation potential and giving the energy conservation implementation recommendation              
The Minister is the minister for energy and mineral resources            
The Director General is the director general who doing the planning, implementing, assistance, and monitoring on renewable energy and energy conservation            
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