Financing of Energy Efficiency in Public Goods: The Case of Street Lighting Systems in Indonesia

Tri Anggono, Rabindra Nepal, Yang Liu, Muhammad Indra al Irsyad () and Farhad Taghizadeh-Hesary ()
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Tri Anggono: Research and Development Agency of Energy and Mineral Resources, Ministry of Energy and Mineral Resources
Yang Liu: Microeconomic, Institutional and Development Impact Division, African Development Bank Group

Chapter Chapter 11 in Energy Efficiency Financing and Market-Based Instruments, 2021, pp 243-261 from Springer

Abstract: Abstract Energy demand growth in Asian countries is predicted to be the highest in the world. One of the drivers of energy demand growth is urbanization. Along with growing urban areas, public infrastructure, such as streetlights, is also expanding. Unfortunately, energy conservation measures in public facilities are commonly constrained by the budget limitations of local governments, while the potential participation of energy service companies (ESCO) requires regulation reformation settling the contradicting regulations. This study proposes several policy recommendations to modify existing guidelines for selecting ESCOs for the energy efficiency of streetlights in Indonesia that has the highest urbanization rate. Regulation review and several potential improvements for selecting ESCOs are provided. In 2017, the Ministry of Domestic Affairs released a Circular Letter to solve barriers to ESCO businesses in public sectors; however, the Circular Letter could be improved in several ways by eliminating the clauses on the holder of intellectual property rights, revising the valuation of economic benefit bidding, and increasing the maximum contract period. Moreover, we propose the use of smart street lighting technologies to improve the value-added services of streetlights and the establishment of a super ESCO to accelerate ESCO business activity in all economic sectors.

Keywords: Energy conservation; Public–private partnership; Energy service company; Super ESCO (search for similar items in EconPapers)
JEL-codes: G18 H54 H57 H70 L94 Q48 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:spr:eclchp:978-981-16-3599-1_11

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DOI: 10.1007/978-981-16-3599-1_11

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