emissions trading markets will all stimulate
energy-saving demand in Malaysia.
Energy savings detection and verification
(especially to determine whether the energy
savings generated by the project are from the
implementation of energy-saving measures,
or other factors) are also a challenge because
each participant in the project has a strong
economic interest in the project. In the end, the
ESCO introduced a new EPC model – namely the
energy-saving guarantee model. In this model,
ESCO guarantees the lowest energy savings so
that the minimum expected return on the project
is deterministic and therefore more conducive
to external financing. ESCOs’ balance sheets no
longer have an investment in energy efficiency
projects, which allows ESCOs to launch more
new projects. At the same time, the International
Performance Measurement and Verification
Protocol (IPMVP) [4] stated that the long-term
success of energy management projects is
often hampered by the inability of the project
partners to agree on an accurate, successful
Measurement & Verification (M&V) plan. M&V
protocol discusses procedures that, when
implemented, help buyers, sellers and financiers
of energy projects to agree on an M&V plan
and quantify savings from energy conservation
measure (ECM) projects. This allows the project
to provide clear evidence for assessing and
recording project energy savings even if certain
conditions change after start-up. This procedure
has given customers more confidence in energy
savings and increased investor confidence in risk
aversion.
Malaysia has huge potential for energy-saving
initiatives. The Government should consider
policies and incentives encouraging contractual
models that promote technology consolidation
and deeper transformation. These can include
energy-saving guaranteed contractual models that
help achieve greater reductions in greenhouse gas
emissions. Malaysia can also consider developing
policies to encourage EPC projects to expand from
the industrial sector to the construction sector.
Many countries, including the United States,
already have many successful cases of EPC in the
construction sector. Malaysia can consider raising
targets and strengthening incentives to promote
deeper energy-efficiency retrofits while driving
large-scale, market-based financing.
The following approaches could further expand
Malaysia’s energy saving potential:
● ●
Consider extending tax incentives,
fiscal incentives, and measurement and
verification practices to models other than
benefit-sharing models, including energy-
saving models.
● ●
En c o ur a ge in t e r a c t i o n s b e t we e n
companies, clients, and Government
decision makers to maximise the impact of
incentives and subsidies.
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