Minister of Energy and Mineral Resources Regulation Number 1 of 2026 Regulates Energy Conservation Service Businesses and Mandates Reporting Obligations

Introduction

On 5 January 2026, the Ministry of Energy and Mineral Resources (MEMR) issued Minister of Energy and Mineral Resources Regulation Number 1 of 2026 on Energy Conservation Service Businesses (“MEMR Regulation 1/2026”). This Regulation, which took effect since 8 January 2026, regulates the legal framework, scope of activities, and reporting obligations for businesses operating in the energy conservation services sector.

MEMR Regulation 1/2026 aims to provide a clear legal basis for the implementation of energy conservation service businesses conducted by Business Entities, Public Service Agencies, and Technical Implementing Units. This Regulation is rooted in the mandate of Article 23 of Government Regulation Number 33 of 2023 on Energy Conservation. The Minister of Energy and Mineral Resources emphasizes the need for specific regulation on the governance of energy conservation service businesses to ensure the measurable and professional implementation of energy conservation.

 

Key Provisions

Scope and Businesses of Energy Conservation Services

Pursuant to Article 3 and Article 6, the implementation of energy conservation service businesses is now open to Business Entities, Public Service Agencies, and Technical Implementing Units that are required to hold Business Licensing. Article 6 specifies five main activities covered by such services, including:

1. Conducting Investment Grade Energy Audits;
2. Financing of Energy Efficiency Projects;
3. Execution of installation works and/or construction, as well as monitoring and supervision of Energy Efficiency Projects;
4. Operation, maintenance, and repair of Energy installations; and/or
5. Measurement and verification of Energy performance.

Energy Audit Standards and Personnel Qualifications

Articles 7 and 9–10 stipulate that an Investment Grade Energy Audit must be capable of identifying technically and economically feasible energy efficiency opportunities through analysis of historical data and measurement of relevant variables. Annex I sets out standards for service providers to support the quality of these services. Service providers in the Energy Audit category are required to employ at least one energy auditor holding a competency certification. Meanwhile, service providers in the Measurement and Verification category are required to employ at least one verifier/analyst holding a competency certification. Article 16 further requires that measurement and verification activities be carried out by experts who have passed a competency assessment.

Business Models and Performance Contracts (Energy Saving Performance Contract)

Articles 13 and 18 introduce flexibility in business models that may be agreed upon between service providers and service users. Article 18 (3) details the permissible business schemes, including:

1. Guaranteed energy savings: the provider guarantees the achievement of a certain level of energy savings.
2. Shared energy savings: energy cost savings are shared according to an agreed proportion.
3. Build–Operate schemes: including build, operate, and transfer (BOT) and build, operate, and own (BOO).
4. Energy as a service: the user pays for specific energy services such as cooling, heating, lighting, or steam supply.

Initial and Annual Reporting Obligations

Initial Reporting

Based on Article 21, energy conservation service providers are required to submit a report no later than 14 working days after the issuance of their Business Licensing. This report includes basic documents (copies of licenses) and technical documents detailing the availability of equipment (such as audit tools or software) in accordance with Annex I.

Reporting for Business Expansion

If a service provider intends to expand its business activities, Article 22 requires the submission of a business expansion report no later than 14 working days after such expansion is approved. Annex II provides technical guidance for such expansion, encouraging service providers to adopt advanced technologies. For example, for expansion into financing or installation services, providers are encouraged to have cloud-based energy monitoring systems and automated sensor technologies for data validation.

Annual Reporting

Furthermore, Article 23 requires the submission of an annual business implementation report no later than 31 December each year to the Minister through the Ministry’s electronic information system. This annual report must follow the format set out in Annex III, which includes a project summary, investment value, and total reduction in energy consumption.

 

Sanctions

Article 28 regulates sanction provisions for businesses. The Minister of Energy and Mineral Resources is authorized to impose administrative sanctions in the form of written warnings on energy conservation service providers that fail to comply with reporting obligations. Violations subject to sanctions include failure to submit the initial report within 14 working days after the issuance of the license (Article 21 (1)), failure to report business expansion (Article 22 (2)), and failure to submit the annual report (Article 23 (1)).

 

Closing

Businesses are now required to employ experts holding competency certifications and to consistently submit initial reports, business expansion reports, and annual reports in a timely manner to the Minister of Energy and Mineral Resources. Businesses are also required to adjust their internal administration to comply with the 14-working-day post-licensing reporting deadline and annual reporting obligations, as well as to ensure that each project uses clear contracts in accordance with recognized business schemes (such as shared savings or energy as a service). While MEMR Regulation 1/2026 opens opportunities for various performance contract schemes such as guaranteed savings or energy as a service, any failure to comply with reporting obligations will result in the imposition of written warning sanctions.