Toward a Sustainable Renewable Energy Policy in Cambodia

Photo of the Lopburi solar power plant in central Thailand, taken in 2011. Courtesy of the Asian Development Bank’s Flickr account.

This is the fourth and final in our short series featuring voices from emerging experts in Cambodia on the water-energy-food nexus and resource management in the Mekong region.

Although Cambodia and Laos continue to move ahead with hydropower projects in the Mekong, solutions to reduce reliance on large-scale hydropower projects exist! It is increasingly acknowledged that large-scale hydropower projects are unsustainable and harmful to the environment and ecosystems both up and downstream of the reservoir. At the same time, the price of renewable energy technologies are globally falling and provide an alternative power generation source to meet development needs and provide affordable and equitable electricity. Cambodia has high-level commitments to reduce carbon emissions, phase-in renewable energy, and bring electricity access to 90% of households by 2030. Cambodia’s National Strategic Development Plan 2019-2023 and Cambodia’s commitment to INDC lay out an ambitious framework for change. Using solar and potentially wind energy to replace non-sustainable hydropower projects could help Cambodia meet these targets.

As a result of increasing construction and investment in manufacturing, Cambodia’s electricity demand is significantly increasing. Electricity consumption has risen between 18% to 20% annually since 2010. The government predicts that electricity demand will grow annually by 9% between 2015 and 2040. To meet this demand, the government plans to more than double supply between 2020 and 2030.

In order to meet this rapidly rising electricity demand, Cambodia has significantly increased domestic energy generation. To date, this has primarily been through support for large-scale hydropower dam and coal. 2019 electricity generation data from the Electricity Authority of Cambodia shows that hydropower makes up 54.76 percent (1,329 MW), coal provides 27.18 percent (660 MW), fuel oil 11.2 percent (271.98 MW) and renewable energy (mostly solar) provides 6.7 percent (163.77 MW).

The government of Cambodia’s Basic Energy Plan for 2020- 2030 continues to rely on hydropower and coal as the main sources for electricity generation. The Sambor and Stung Treng dams are 2 proposed hydropower projects on the Mekong mainstream in Cambodia. The environmental, economic and social impacts of the Sambor and Stung Treng dams have been assessed by numerous agencies and their construction is opposed by many regional and non-governmental organizations and civil society groups. If built, Sambor will become the most severely impactful dam on the Mekong River mainstream, reducing sediment load and blocking the passage of over 80% of migratory fish from Cambodia and Vietnam. This will reduce fish yield by a third just in Cambodia.[1]

In 2019, Cambodia faced electricity shortages during the dry season (March-May) because of high dependency on hydropower power plants, which produced insufficient electricity due to a drought which meant there was insufficient water to operate the hydropower turbines as planned. This prompted action from the government: in presenting Cambodia’s 2020 energy vision, the director of the Cambodian utilities Electricite du Cambodge (EdC) Keo Rattanak announced that Cambodia will expand its solar energy capacity by 12 per cent by the end of 2020 and to 20 per cent by 2023. He said that solar power would be used to meet increasing electricity demands in the industrial and commercial sectors. He also noted that this would be preferable to mainstream dams: “We believe solar power will provide lower prices [than hydropower]. As EdC’s director, I do not want to see the Mekong River as part of the hydropower generation.”

This new goal is takes advantage of falling costs for solar and wind technology and reflects discussions among CSOs and private sector businesses interested in solar energy investment. The 20 percent solar power target mentioned by the Cambodian EDC senior official are very welcome. Many civil society experts think that energy from solar panels could be the number one generator of electricity in Cambodia. There is strong potential with studies suggesting between 8,100 MW and 11,000 MW (IES and MKE 2016) of peak generation capacity in Cambodia every year. To put this in context, Cambodia’s total generation capacity in 2019 (including both domestic and import sources) is 2,870 MW.

Despite these exciting targets, currently the energy policies limit the adoption of solar energy. The government does allow companies and consumers to connect to the national grid while also using solar energy from a rooftop installed system. However, Electricity Authority of Cambodia regulations say that grid-connected solar power projects are only allowed to generate up to 50% of their total demand (in KW) and must purchase the rest from EDC. In order to promote solar photovoltaic generation investment, the government should consider adjusting the energy policy and regulations to remove obstacles and limitations like these. Making these changes would address concerns over the extra costs imposed on industry that want to use solar among small and medium enterprises.

Cambodia has the potential to promote clean and environmentally-friendly energy and reduce dependence on large-scale hydropower in the Mekong. There are signs the government is considering next steps to do so. The draft Environmental Code outlined plans to pilot a feed-in tariff, offering a fixed price for energy fed into the grid from independent renewable energy producers. However, implementing this will require practical and technical actions in addition to legal changes. Access to project financing and taxation is another area where policy changes could help incentivize solar investment companies.

Energy efficiency is also important as an alternative policy to address electricity demand, which on a business as usual (BAU) path will grow at a rapid rate of at least 9% per year and impose challenges on the overall electricity system. The Basic Energy Plan aims for a 15% reduction in total energy demand by 2030, compared to BAU levels. This is the minimum that should be achieved. The Cambodian Government should take further steps to achieve these reductions.

Ultimately, adopting decentralized electricity generation and shifting towards renewables in the energy mix will ensure continued economic growth and affordable electricity prices while minimizing other risks and costs.

The author visiting the first major 60MW commercial solar farm in Kampong Speu province, Cambodia, on July 29, 2019. Photo courtesy of Soknak Por.

Soknak Por, a Cambodian, has been working with non-governmental organizations for more than ten years. Engaging in NGO sector since 2003, Soknak has worked with various projects in Cambodia in the fields of community development, capacity building, governance and natural resources management. He has formulated and built capacity hundreds of community-based organizations and sub-national government officials. He received master’s degree of Development Studies from University of Cambodia and Bachelor of Education in English Literature from Build Bright University in Cambodia. He has strong interest in working with grassroots community for capacity building and empowering them to protect and manage their own resources toward fair sharing of natural resources and sustainable livelihoods. He is currently working as Project Coordinator for People Protecting Their Ecosystems in The Lower Mekong Project, part of Asia Regional Natural Resource Governance Cluster of Oxfam based in Cambodia.

[1] Dr. Vittoria Elliott and Chheng Phen, Report on Spawning Habitats of Fish in the Mekong and 3S Rivers in Cambodia, Inland Fisheries Research and Development Institute, May 2017.

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