Energy Conservation Service Businesses: PERMENESDM 1/2026

The Ministry of Energy and Mineral Resources has issued Peraturan Menteri ESDM Nomor 1 Tahun 2026 tentang Usaha Jasa Konservasi Energi (Energy Conservation Service Businesses). The regulation sets the framework for companies that deliver energy conservation as a paid service — auditing how facilities use energy, designing efficiency projects, and financing those projects through performance-based contracts.

Issue

Pasal 1 defines Konservasi Energi (energy conservation) as a systematic, planned, and integrated effort to preserve domestic energy resources and improve the efficiency of their use. The same article names the actors in the market: the Penyedia Energi (energy provider), the Pengguna Energi (energy user), and the Pengguna Sumber Energi (energy-source user), which can be central or regional government, business entities, permanent establishments, non-incorporated businesses, or the public. The regulation addresses the need for a defined service industry that can measure, verify, and finance energy savings on behalf of these users rather than leaving efficiency to each facility owner.

Key Provisions

The technical core is a sequence of assessment steps. Pasal 10 requires that the inspection and measurement of energy efficiency cover, at minimum, a check of the measurement-point list, calibrated instruments, and measurement period; the measurement of Variabel Relevan (relevant variables) and energy consumption; validation of the measured data; and, where a Faktor Statis (static factor) is used in setting the energy baseline, a check of that factor. To strengthen an Audit Energi Berstandar Investasi (investment-grade energy audit), the inspection may also observe energy losses and savings potential.

Pasal 11 sets the content of the energy consumption and cost analysis: processing the measurement data, analyzing energy performance, evaluating the potential to improve performance and save energy, and recommending a Proyek Efisiensi Energi (Energy Efficiency Project). Pasal 12 then requires a detailed, systematic cost calculation for that project, covering the potential savings in energy cost, a breakdown of project costs, and a financial-feasibility analysis.

Financing is addressed in Pasal 13. An Energy Efficiency Project is financed through a Kontrak Kinerja Penghematan Energi (Energy Saving Performance Contract), under which repayment is tied to the energy savings actually achieved. The contract requires measurement and verification of energy performance, agreed between the service provider and the user, and carried out either by a provider whose scope covers both financing and measurement-and-verification or by a provider engaged for the verification alone. A provider may be backed by a third party through risk guarantees, and where the financed facilities are managed by central or regional government, the financing follows the applicable statutory provisions.

Oversight sits with the Minister. Pasal 27 provides that guidance and supervision are carried out by an official designated to oversee energy-conservation implementation, and where no such official is in place, the Minister may assign an officer working in the energy-conservation field. The chapter that follows sets out administrative sanctions for non-compliance, a structure that mirrors the environmental administrative sanctions applied in other sectors.

Implications

Because repayment under Pasal 13 depends on verified savings, the measurement discipline in Pasal 10 becomes the basis of the commercial arrangement: without a calibrated, validated baseline, the savings a contract pays for cannot be established. The staged flow from measurement under Pasal 10 to analysis under Pasal 11 to a costed recommendation under Pasal 12 gives users a documented trail from raw energy data to a financed project. For providers, the Energy Saving Performance Contract shifts part of the performance risk onto the service company, since payment follows realized savings rather than installed equipment.

Regulatory Context

The regulation adds a service-industry layer to Indonesia's energy-efficiency effort and sits alongside other Ministry of Energy and Mineral Resources instruments issued in 2026, including the ISPO certification rules for palm-oil bioenergy that govern sustainability assurance in the same ministry's portfolio. By defining the audit, project, and contract types in Pasal 1 and tying them together through measurement and verification, the regulation standardizes how energy-conservation services are delivered and paid for.

Read the full regulation in the CRPG Law Database.

Methodology: This memo summarises the official regulation text and is not legal advice; report corrections to contact@crpg.info.

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