Opportunities and challenges of energy service companies to promote energy efficiency programs in Indonesia

Abstract

Energy Service Companies (ESCos) can help energy users, companies, industries, and commercial sectors in improving the efficiency of equipment by providing energy service (energy performance and/or credit risk). ESCos were implemented quite successfully for promoting energy efficiency (EE) in many European countries and other developed countries such as the USA, Canada, and Japan. However, developing countries should improve ESCo implementation. This raised the question of potential barriers to use ESCo for energy efficiency programs in developing countries. To successfully implement and operate ESCo in developing countries like Indonesia, it is crucial to study and understand the opportunities and challenges encountered in running energy efficiency program. The aims of this study are to understand and verify the strengths, weaknesses, opportunities and threats of developing markets for energy service companies in Indonesia. This is achieved by surveying the key stakeholders in the industry, financial institution and policymakers and identifying significant factors such as regulatory, financial, and awareness aspects for decision-makers. The key findings of the research are that strong policy regulation and financial incentives can improve the development of ESCos due to huge investment opportunities for energy efficiency projects in Indonesia.