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Energy Conservation

The government has determined that in order to give effect to Article 25(5) of Law No. 30 of 2007 on Energy there is a need for the enactment of a government regulation on energy conservation. For that purpose, the government has issued Regulation No. 70 of 2009 (“GR 70”). GR 70 repeals and replaces Presidential Decree No. 43 of 1991 and it has been in force since 16 November 2009.

Energy conservation is defined as a systematic, planned, and integrated effort that seeks to preserve domestic energy resources while simultaneously enhancing the efficiency with which those energy resources are exploited. The energy resources contemplated under the provisions of the regulation include thermal, solar, mechanical, chemical, and electromagnetic.

Conservation of energy is an all-encompassing pursuit that requires commitments from not only the central, regional, and local governments, but also from the business community and from citizens. The obligations on each of these stakeholders will be set out and defined in the National Energy Conservation Master Plan. Nevertheless, GR 70 sets out the responsibilities of each in Articles 4 through 8. For example, Article 8 stipulates that the community is required to support and implement the energy conservation program.

This master plan is to be compiled and confirmed by the minister. The basic components of the master plan are to deal with issues relating to targets, policies, programs, and the steps taken to conserve energy. The master plan must be compiled in such a manner as to be in accord with the national energy plan. The master plan is to be for a period of five years, and is subject to review each year.

GR 70 sets out both incentives and disincentives in support of the energy conservation goals. The incentives include taxation facilities for energy conserving equipment, import facilities, and low interest rates for investment in energy conservation, among others. The disincentives listed in the regulation include, among others, written warnings; notifications in the mass media of violations; fines, and / or restrictions on energy supply.

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