Govt. Regulates Energy-Conservation Services

The Minister of Energy and Natural Resources (“Minister”) has issued Regulation No. 14 of 2016 on the Organizing Energy Conservation Business Services (“2016 Regulation”), which sets out guidelines for parties intending to establish and engage in the operation of energy conservation service businesses (“Energy Conservation Service Companies”). [1] The 2016 Regulation is of relevance to energy conservation companies, companies that are seeking to become involved in the provision of energy conservation services and businesses in general.Energy Conservation ServicesEnergy Conservation Service Companies may engage in cooperation with other companies (“Users”) in order to provide services aimed at improving the efficient use of energy by the User when they engage in their business activity. [2] These services can take the form of: 1) the planning or formulation of preliminary energy audit results (“Draft of Energy-Efficiency Project”) [3] ; 2) Investment-grade energy auditing [4] ; 3) Energy-efficiency project financing; 4) Installation work and/or construction for energy-efficiency projects; 5) Monitoring, operation, maintenance, and repair of the energy installation; and/or 6) Measurement and verification of energy-saving performance. [5] Any cooperation between an Energy Conservation Service Company and the User is conducted based on an Energy Saving Performance Contract (“ESPC”). Through this cooperation scheme, an Energy Conservation Service Company will be entitled to receive payment from the User based on the amount of energy that can be saved. [6] In detail, two types of ESPC are set out under the 2016 Regulation, namely: [7]