ESCO IN INDONESIA OPPORTUNITIES AND CONSTRAINS ON ENERGY...

for people to act an Audit Recommendation, they need money. Energy Performance Contract (EPC) can supply that money by using what the owner is paying for waste energy . Estimated to be USD 4 billion in Indonesia ……. Hansen Associates – Shirley J Hansen, PhD – author of “ESCO AROUND THE WORLD”

SEMINAR MEMBUKA SUMBATAN INVESTASI ENERGI EFFISIENSI DI INDONESIA : TANTANGAN DAN PELUANG KEBIJAKAN DAN REGULASI

JAKARTA, 20 MARET 2013

ESCO IN INDONESIA OPPORTUNITIES AND CONSTRAINS ON ENERGY EFFICIENCY INVESTMENT POTENSIAL

Banu Anang Priyanto Secretary General

Asosiasi Perusahaan Penunjang Konservasi Energi Indonesia (Indonesia ESCO Association )

EE SAVING POTENTIAL, ANNUAL SAVING

Industrial; 216; 78%

Commercial; 62; 22%

Indonesia Energy Savings Potential at least US$ 278 Millions Annually

Source : Market Feasibility Report For Assessing the need for an Energy Efficiency Fund in South-East Asia (ReEx Capital Asia 2010)



1 Malaysia Singapore Thailand Singapore Singapore

Thailand

2 Indonesia Philippines Singapore Malaysia Thailand

Philippines

3 Thailand Vietnam Malaysia Indonesia Philippines

Philippines Vietnam

4 Singapore Indonesia Indonesia Malaysia

Vietnam

5 Vietnam Thailand Indonesia

6 Philippines Malaysia Vietnam

OVERALL RANKINGS *)

Investment

Potential

Payback

Period

ESCO Sector

Capacity

Regulatory

Framework

Overall

RankingRANK

ESCO Sector maturity critical for market development and penetration

Most developed in Singapore and Thailand

(Result implies that ESCOs in these countries are in best position to implement large scale EE project if investments start flowing and demand increase

substantially)

Regulatory Enviroment is the ultimate determinant of best investment destination

Favorable locations: Singapore & Thailand - followed by Philippines & Malaysia

(Resuslt implies that the regulation in these countries is most conducive for international and domestic investors : Tax waivers/ subsidies/ other incentives/

some financing/ low(er) red-tape)

Source : Walkthrough Audit by AFD 2011-2012

ESCO INDUSTRY IN INDONESIA - 1

The growth of ESCO industry in Indonesia has been

so slow (undeveloped) due to some reasons :

• Undetermined and lack of regulatory frame works of

ESCO Industry, at multi level stages.

• No ESCOs accredited body established in Indonesia ,

hence no ESCO standard model applied.

• Existing ESCO has limited experience with successful

ESCO projects (limited published information)

• Limited financial access for funding EE projects under

ESCO’s model. Local Financial Lender Officers have

limited knowledge and understanding of EE projects or

energy performance contract concept;

• Several Manufacturer or Supplier now doing with their

own “ESCO model” on EE or CE projects. MNC ESCO

adopted their principal model. Support by own capitals.

• Immature ESCO’s Associations (established in Q1 of

2011) resulted low ESCO Capacity.

Fast Growing Indonesian’s economy, boosted energy consumption and emissions

Utilize Demand side Management

(DSM)

Provide Innovative Financing Structures

Provide Incentives,

Subsidies and Grants

Improve Manager Energy

Capacity for Analytical

Market Transformatio

n driven by Regulations

Establish ESCO’s

Capacity

Catalyzing and

Promoting EE Project Implement

ations

MULTI DELIVERIES FACTORS PROMOTING EE

PROJECTS

*) World Bank References - Energy Assessment in Indonesia



EE Revolving Fund (Dana

Bergulir EE by GOI)

ESCO INDUSTRY IN INDONESIA - 2

Regulatory Frame Work Determined by Authorities

(Government)

Lack of EE Development and Project Financing

Lack of Know How and Awareness

Lack of Regulatory Framework

Lack of Customer Demand

Mai

n B

arri

ers

Fin

anci

ng

Pro

ble

ms

What the banks say: No Central Bank Regulations adopted EE Project concept There are not enough good projects Long Term Fund are not available

Banks do not recognize EE Projects as the special product Project financing is not popular for ESCO business Collateral is still a big problem

REGULATORS (GOV’T)

ESCO Companies

Wh

o C

an S

olv

e ?

Consultant companies

Equipment Producers

Capacity Building of all EE Stake Holders

Supporting Budget for Develop ESCO’s Capacity (APBN, Offshore Funds,

Grants)

EXP

ECTE

D N

EXT

1-2

Y

EAR

S O

PP

RO

TUN

ITIE

S

Key Driver for Changes

Esco Industry Regulations issued

Client with better informed about EE

Central Bank Decree issued for EE Project

Bank Adopt EE Project Valuations

Rational Used Decree issued (4 sector)

Labeling and Standard EE Product Decree Issued

EE Trust Fund Decree issued by Cap Market Authority

Esco’s Accreditations Body Establish

4 Sectors Demand Side Management (DSM ) Regulation issued

Local ESCO and or MNC Affiliated ESCO Established

Better Financial Access for EE Projects





Multistake Holder Roles to EE Development

Utilize

Demand-

Side

Manageme

nt (DSM)

Develop of

ESCOs

Industry

Innovative

Financing

Sources and

Structures

Market

Transformat

ion (by

Labeling,

Standardisa

tion etc)

Incentives,

subsidies

and grants

Improve

Energy

Manager

(EM)

Capacity

REGULATORS

1Ministry of Energy and Mineral Resources

(MEMR)

2 Ministry of Industry (MOI)

3 Ministry of Finance (MOF)

4 Ministry of Environment (MOE)

5 Ministry of Public Works (MPW)

6 Ministry of Transportation (MOTrans)

7 Ministry of Trade (MOTrade)

8Capital Market Supervisory Board

(Bapepam LK)

9 Central Bank (BI)

10Municipalities / Local Government (MLG),

National Standarisation Board (BSN)

No. EE Stake Holder

Propose Roles to EE Development

EE STAKE HOLDER RULES – ESTABLISH MUTIDELIVERY FACTORS IN PROMOTING EE PROJECTS



IDENTIFIED EE STAKE HOLDER RULES - PROMOTING EE PROJECTS

MEMR MOI

MO Trans

MPW (PU)

MOE (KLH)

REGULATOR

MO Trade

MOF (DEPKEU

)

CENTRAL BANK

CAPITAL MARKET AUTHORITY

Municipalities / Local Government

(MLG),

STATE ENERGY

SUPPLIER

NATIONAL ELECTRICITY

COMPANY (PLN)

NATIONAL GAS COMPANY (PGN)

STATE OIL COMPANY

(PERTAMINA)

FINANCING Domestic Financial

Institutions

Domestic Bank (Commercial, Islamic ,

Local Development Bank, Credit People

Bank)

Multi Finance Company

Asset Management Co - Investment Manager

EQUIPMENT SUPPLIER

Equipment Manufacturers

, Suppliers, Retailers

SUPPORTINGS SERVICES

Energy Audit Firms

Building Architects

ESCO's

INTRODUCTIONS OF INDONESIA ESCO ASSOCIATION (APKENINDO)

Established and Launched on April 21, 2011 based on Notary Decree Ref. No. 30 and Ref. No. 31, H. Teddy Anwar

SH, Public Notary in Jakarta and Registered in Jakarta District Court.

ROLE OF APKENINDO :

1. Catalyzing activities and promotion of the establishment of strategic alliances :

ESCOs, Potential Clients – Energy End Users,

Financing institutions, EE equipment’s manufacturers and distributors, and Support Institutions

2. Strengthen the offer of ESCO’s by

• Establishing a Special Fund as an option of CE financing sources (Apkenindo’s current initiations)

• Help establish a financing mechanism that will allow ESCOs to bundle several projects and reduce transaction costs.

3. Support the member to develop EE project by :

Technical Assistance

Assistance in establishing the contact, negotiations

Capitalization of Experiences – Promotion of results

Capacity Building , Training and Seminar

4. Apkenindo served to Regulators as counter party to promote and development of EE Project , determine regulation

frame works etc.

Asosiasi Perusahaan Penunjang Konservasi Energi Indonesia (APKENINDO) / Indonesia Supporting Companies Association for Energy Conservations (INDONESIA ESCO ASSOCIATIONS) Judianto Hasan (President) / Banu Anang Priyanto (Secretary General ) Contacts :+62811840335 [email protected]; [email protected]

+62818767503 [email protected], [email protected]



mailto:[email protected]






















Lightings

HVAC Retrofits

Building Control Systems

Motors and Drives

Chiller and Boiler Upgrades

Thermal Storage/Load Shaping

Generation Efficiency Improvement

On-site Power Generation (Distributed Generation, CHP, Cogeneration)

Power Quality

Industrial Processes (e.g., compressed air systems)

PT. INDRA KARYA (PERSERO)

P.T. METROPOLITAN

BAYU TAMA

RANGE OF ESCO PRODUCT / SERVICE OF ESCO BUSINESS POTENTIAL TO DEVELOP BY APKENINDO MEMBER

4 STATE OWNED COMPANIES + 12 PRIVATE COMPANIES





Waste Heat Recovery Power Generation Waste Water Recovery Power Generator • Proposed Client : Cement Company (State Owned Co) • Project Title : Waste Heat Recovery Generator (WHRG) PROJECT HIGHLIGHTS : • Waste Heat Potensial : 29,8000 – 42,134 kcal (7,53-9,27 MW) • Steam Rankine Cycle and Organic Rankine Cycle.

• Proposed Client : Pulp and Paper Co (Private) • Project Name : Waste Water Recovery Electricity Generation • Technology /Equipment : Un aerobic Reactor + Boiler + Engine

PILOT EE INVESTMENT PROJECT – ON GOING PREPARATION BY APKENINDO AND EE STAKEHOLDERS - 2013

THANK YOU



ESCO IN INDONESIA OPPORTUNITIES AND CONSTRAINS ON ENERGY...

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