Government Measures to Promote New Retrofitting Business and Financing Option in Indonesia

  • Authors

    • Ismiriati Nasip
    • Eka Sudarmaji
    https://doi.org/10.14419/ijet.v7i3.25.17791
  • Building Energy Efficiency, Government Measures, Retrofitting.

  • Abstract

    The aim of this study is to investigate current government measures to encourage Building Energy Efficiency (“BEEâ€) development in Indonesia. This study compiles and analyzes business models and financing options for retrofitting financing of BEE in Indonesia: establishing a framework for a critical comparative study, compare and assess the BEE government measures availability, and survey the customers’ expectation of BEE measures. This study looks at the favorable measures that the Indonesian Government could take, and triangulate the findings of the comparative study and questionnaire survey to develop recommendations for BEE measures in Indonesia. It was found that the lack of economic incentives, diverse business models, and limited financing options might be the most prominent problems of the BEE promotion at the current stage in Indonesia. Un-consolidated policy among legislations is hampering the efforts of any BEE promotion. Tax incentives are likely to be more viable and efficient option for most of the Indonesian company, as well as active government interventions to promote BEE development. Illustrating the findings and regulatory analyses, as well as in-depth interviews with business representatives, this study identified several types of business models and some favorable financing option.

     

     

  • References

    1. [1] ReEx Capital Asia, “South East Asia Energy Efficiency Market Report 2011.†2011.

      [2] R. Oberman, R. Dobbs, A. Budiman, F. Thompson, and M. Rosse, “The archipelago economy: Unleashing Indonesia’s potential,†no. September. pp. 7–65, 2012.

      [3] ASEA Brown Boveri, “Indonesia Energy Efficiency Report,†Country Report, no. March. pp. 1–6, 2013.

      [4] Asia-Pacific Economic Cooperation, “Peer Review on Energy Efficiency in Indonesia,†Report for the APEC Energy Working Group. 2012.

      [5] W. H. Golove and J. H. Eto, “Market Barriers to Energy Efficiency : A Critical Reappraisal of the Rationale for Public Policies to Promote Energy Efficiency,†Energy Environ., vol. 26, no. March, 1996.

      [6] A. B. Jaffe and R. N. Stavins, “The energy-efficiency gap - What does it mean?,†Energy Policy, no. October, 1994.

      [7] J. Respati, “Indonesian Market Potentials for Energy Efficient Buildings,†2016.

      [8] L. S. Eang, “A Review of Building Energy Efficiency Development in Indonesia,†no. January, 2015.

      [9] PT Perusahaan Listrik Negara (Persero), “Rencana Usaha Penyediaan Tenaga Listrik (RUPTL) 2015 - 2024.†2014.

      [10] S. Nadel, J. Amann, S. Hayes, S. Bin, R. Young, E. Mackres, H. Misuriello, and S. Watson, “An Introduction to U.S. Policies to Improve Building Efficiency,†American Council for an Energy- Efficiency Economy, no. 202. 2013.

      [11] IPEEC, “Building Energy Rating Schemes: Assessing Issues and Impacts,†Building Energy Efficiency Taskgroup, no. February. 2014.

      [12] N. I. Husin, A. C. Ahmad, A. M. A. Wahid, and S. N. Kamaruzzaman, “Energy Efficiency Criteria for Green Highway,†Soc. Sci. Humanit., vol. 25, pp. 119–128, 2017.

      [13] J. A. McWilliams and I. S. Walker, “Home Energy Article : A Systems Approach to Retrofitting Residential HVAC Systems,†Lawrence Berkeley Natl. Lab., 2005.

      [14] F. A. Hejazi, R. A. Ramanathan, and M. S. Jaffar, “Seismic Response of a Light Rail Transit Station Equipped with Braced Viscous Damper,†Sci. Technol., vol. 24, no. 2, pp. 273–283, 2016.

      [15] The Rockefeller Foundation, “United States Building Energy Efficiency Retrofits: Market Sizing and Financing Models.†2012.

      [16] NAPEE, “Vision for 2025: A Framework for Change - A Resource of The National Action Plan For Energy Efficiency,†Natl. Action Plan Energy Effic., no. November, 2008.

      [17] R. Dobbs, H. Pohl, D.-Y. Lin, J. Mischke, N. Garemo, J. Hexter, S. Martzinger, R. Palter, and R. Nanavatty, “Infrastructure productivity: How to save $1 trillion a year,†no. January. p. 100, 2013.

      [18] World Economic Forum, “A Profitable and Resource Efficient Future : Catalysing Retrofit Finance and Investing in Commercial Real Estate,†Finance, no. October, p. 64, 2011.

      [19] F. Zed, “Indonesia Energy Efficiency and Conservation Status, Gaps and Opportunities,†2015.

      [20] E. O’Malley, S. Scott, and S. Sorrell, “The Economics of Energy Efficiency : Barriers to Cost-Effective Investment,†in Policy Research Series, 2003, pp. 50–52.

      [21] P. Tharakan, “Summary of Indonesia’s Energy Sector Assessment,†ADB Papers on Indonesia, no. 9. 2015.

      [22] N. Adiwoso, “Towards Indonesia’s Sustainable Future Through Sustainable Building and Construction,†in SB10SE, 2010.

      [23] G. Leventis, E. M. Fadrhonc, C. Kramer, and C. Goldman, Current Practices in Efficiency Financing : An Overview for State and Local Governments, no. November. 2016.

      [24] WSGR, “Innovations and Opportunities in Energy Efficiency Finance,†no. May, p. 12, 2012.

      [25] H. L. F. De Groot, E. T. Verhoef, and P. Nijkamp, “Energy Saving by Firms: Decision-Making, Barriers and Policies,†Energy Econ., vol. 23, no. 6, pp. 717–740, 1999.

      [26] M. H. Brown and B. Conover, “Recent Innovations in Financing for Clean Energy,†Southwest Energy Effic. Proj., no. October, 2009.

      [27] T. D. Gerarden, R. G. Newell, and R. N. Stavins, “Assessing the Energy-Efficiency Gap,†Natl. Bur. Econ. Res. Work. Pap. Ser., no. January, pp. 1–74, 2015.

      [28] J. Schleich and E. Gruber, “Beyond case studies : Barriers to energy efficiency in commerce and the services sector,†Energy Econ., vol. 30, pp. 449–464, 2008.

      [29] J. a S. Laitner, S. Nadel, R. N. Elliott, H. Sachs, and a S. Khan, “The Long-Term Energy Efficiency Potential : What the Evidence Suggests,†Energy Effic. Econ., no. January, pp. 1–88, 2012.

      [30] F. P. Torgal, C. Buratti, S. Kalaiselvam, C.-G. Grangvist, and G. V. Ivanov, Nano and Biotech Based Materials for Energy Building Efficiency. 2016.

      [31] J. Potts, “Knowledge and Markets,†J. Evol. Econ., vol. 11, pp. 413–431, 2001.

      [32] J. Sengupta, “Understanding economic growth: Modern theory and experience,†Sci. Bus. Media, pp. 1–120, 2011.

      [33] M. A. Brown, “Market Failures and Barriers as A Basis for Clean Energy Policies,†Energy Policy, vol. 29, pp. 1197–1207, 2001.

      [34] R. J. Sutherland, “International Association for Energy Economics,†Energy J., vol. 12, no. 3, pp. 39–66, 1991.

      [35] C. Adams, “Valuing Energy Efficiency in the Real Estate Community,†pp. 13–24, 2012.

      [36] A. Burr, C. Majersik, and N. Zigelbaum, “The Future of Building Energy Rating and Disclosure Mandates: What Europe Can Learn From the United States,†2016.

      [37] Climate & Strategy Partners, “Financing Energy Efficiency Building Retrofits - International Policy and Business Model Review and Regulatory Alternatives for Spain.†pp. 1–68, 2010.

      [38] N. Anastasia, “The Way to Encourage Green Building in Indonesia,†2013, no. June, pp. 1–14.

      [39] W. D. Chen, “Policy failure or success? Detecting market failure in China’s housing market,†Econ. Model., vol. 56, pp. 109–121, 2016.

      [40] Q. K. Qian and E. H. W. Chan, “Government measures needed to promote building energy efficiency (BEE) in China,†Facilities, vol. 28, no. 11/12, pp. 564–589, 2010.

      [41] International Energy Agency, Technology Roadmap Energy efficient building envelopes. 2013.

      [42] International Energy Agency, “The Experience With Energy Efficiency Policies and Programmes in IEA Countries - Learning from the Critics.†2005.

      [43] A. Hill and P. Dunsky, “Building Energy Rating and Disclosure Policies Update and Lessons From the Field,†no. February. 2013.

      [44] M. Mendelsohn and C. Kreycik, “Federal and State Structures to Support Financing Utility-Scale Solar Projects and the Business Models Designed to Utilize Them.†2012.

      [45] X. Wang, M. Lu, W. Mao, J. Ouyang, B. Zhou, and Y. Yang, “Improving benefit-cost analysis to overcome financing difficulties in promoting energy-efficient renovation of existing residential buildings in China,†Appl. Energy, vol. 141, pp. 119–130, 2015.

      [46] International Energy Agency, World Energy Outlook 2013. 2013.

      [47] E. Sudarmaji, “Managing The Impacts of New Retrofit Financing in Energy Saving Agreement ( ESA ) as Off-Balance Sheet Practices in Indonesia,†in Konferensi Ilmiah kuntansi 4, 2017, pp. 1–18.

      [48] I. Nasip and E. Sudarmaji, “Managing Tax Dispute Due to IFRS-16 on The Retrofits Implementation in Indonesia,†in ASIA International Multidisciplinary Conference 2017, 2017.

      [49] A. C. Fisher and M. H. Rothkopf, “Market failure and energy policy - A rationale for selective conservation,†Energy Policy, vol. 17, no. 4, pp. 397–406, 1989.

      [50] T. L. Cherry, S. Kallbekken, and S. Kroll, “Accepting market failure: Cultural Worldviews and the Opposition to Corrective Environmental Policies,†J. Environ. Econ. Manage., vol. 85, pp. 193–204, 2017.

      [51] I. Nasip and Y. D. Pradipto, “Informality Trap Policy Revisited: Framework for Policy Design in Indonesia,†2016.

  • Downloads

  • How to Cite

    Nasip, I., & Sudarmaji, E. (2018). Government Measures to Promote New Retrofitting Business and Financing Option in Indonesia. International Journal of Engineering & Technology, 7(3.25), 531-537. https://doi.org/10.14419/ijet.v7i3.25.17791

    Received date: 2018-08-18

    Accepted date: 2018-08-18