Singapore energy-efficiency startup making inroads into Indonesia

Jakarta

AS INDONESIA'S corporates grapple with the twin challenges of meeting ESG (environmental, social and government) standards and a Covid-19 ravaged economy, reducing energy costs has become a key priority for business leaders.

The country is blessed with ample supply fossil fuels to generate electricity which has made it difficult for renewable energy players to break into the market.

Coupled with the fact that Indonesia has one of the highest financing costs for renewable energy in the world, the solution lies in lowering usage rather than increasing supply.

"If Indonesia can manage the demand side of the energy equation, this will save costs as well as have a positive impact on the environment," said Hoe Boon Chye, the chief executive officer of Barghest Building Performance (BBP), a Singapore company that offers energy-efficient technology solutions in South-east Asia's largest economy.

"This goes hand-in-hand with renewable energy," he added. "Energy efficiency is the big way to go for Indonesia to manage power demand as the country urbanises and moves towards a more sustainable ESG-driven economy."

Using sensors, software algorithms, equipment control and engineering design, BBP can help Indonesian businesses reduce energy costs by 40 per cent, which is a huge savings for building owners and property players.

In tropical countries, 60 per cent of a building's energy usage is from cooling systems, 15 per cent from lighting and the remainder from equipment and appliances.

BBP does not charge an upfront fee for its services but shares the savings it is able to generate with the client. These are calculated by an independent internationally recognised verifier.

"Our business solution is targeted at cooling systems," said Mr Hoe. "We install our micro-sensors into a building's cooling system and with our software algorithm, we can monitor and adjust the air conditioning in a building to achieve maximum savings."

Founded in 2012, BBP currently operates in nine countries including Indonesia, China and Thailand.

In Indonesia, its customer mix includes real estate owners such as Agung Podomoro Land, Artha Graha and Keppel Land Indonesia.

The system is now being used to lower energy usage in Senayan City, one of Jakarta's largest and most popular malls, as well as in the International Financial Center.

"At the moment, Indonesia contributes between 10 to 15 per cent of our business," said Mr Hoe.

But given the fast pace of growth in energy usage - between 2017 and 2040, the number of air-conditioning units is forecast to increase from 20 million to 300 million - this rate will rise.

"We believe Indonesia can easily grow at a high single digit for many years to come," he noted.

Mr Hoe estimates that Indonesia's energy efficiency market could be worth as much as US$1.5 billion in the coming years.

Apart from building owners, BBP's customers also include Fortune 500 companies such as HP, 3M, Nestle, Singtel and the Changi Airport Group.

"We call our business model energy efficiency as a service," Mr Hoe said. "After we install our system, it's in our interest that savings are optimised so we can continue to manage the asset with our own data management system."

BBP is now transitioning from providing energy efficiency services to becoming a data management company.

"When we marry our system with AI (artificial intelligence), we are able to uncover many new savings for our clients," Mr Hoe noted.

According to Khairul Anwar, global markets director of Indonesia at Enterprise Singapore, Indonesia aims to increase its renewable mix to 23 per cent by 2025, from 11.5 per cent as of 2020.

It also wants to generate one third of its clean power from solar energy, which will require it to build 17.6GW of solar capacity from 153.8MW currently, in the process creating opportunities for international expertise, technology providers and capital investors.

"We are already seeing more Indonesian companies seeking partners, including those from Singapore, with energy optimisation technologies and track record in solar power installations," said Mr Anwar.

"Besides technological solutions, Singapore can also support project development with a range of financing solutions, thus providing their Indonesian clients more comprehensive and competitive offerings."

• The Business Times is hosting a regional webinar, "Investing in the Indonesian Digital Economy", on Aug 31 at 11am. Registration is free and closes on Aug 25. Sign up at bit.ly/btregionalwebinar.