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Cambodia energy demand set to beat regional average

Cambodia energy demand set to beat regional average

091106_09
Workers install new electricity lines on a street in downtown Phnom Penh. Just 20 percent of the Kingdom’s homes are connected to an electricity supply, the ADB said, most of which are in the capital.

ADB report says the Kingdom will develop a huge appetite for energy as more homes are connected to national grid

Electricity is ... a pleasure if you have it, so development should be promoted.

ENERGY demand in Cambodia will grow 3.7 percent per year from 2005 to 2030, outpacing the regional average of 2.4 percent, according to a new report by the Asian Development Bank (ADB) and the Asia-Pacific Economic Cooperation (APEC).

The report, Energy Outlook for Asia and the Pacific, which was released Tuesday at the Pacific Energy Summit in Tokyo, projects that energy demand in Cambodia will rise from 4.8 million tonnes of oil equivalent in 2005 to 12 million tonnes in 2030 as manufacturing industries are established and more households are connected to the electricity grid.

It did not say how much Cambodia would need to invest to meet energy needs, but placed the price tag for the Asia and Pacific region at between US$7 trillion and $9.7 trillion.

The report’s author could not be reached for comment Thursday, but an ADB spokesperson said a detailed breakdown of investment requirements was likely to be released in December.

Although nearly 80 percent of the region’s energy needs in 2030 would still have to be met by fossil fuels – coal, oil and natural gas – the report said that more than 60 percent of the total investment in the region’s energy sector would need to be in electricity generation, transmission and distribution.

In Cambodia just 20 percent of households are connected to the national grid, which is fragmented into isolated power systems centred on provincial towns and cities. Around 75 percent of the country’s energy needs are currently met by the burning of biomass.

Rogier Van Mansvelt, a rural energy expert and consultant to the Ministry of Industry, Mines and Energy, said that electrification is desirable but, that immediate energy needs also need to be considered.

“Electricity is really a pleasure if you have it, so development should be promoted. But it’s good to discuss also at a regional level what is important for families, what do they like, and also the price of electricity, which is much more expensive outside of the cities,” he said.

Connecting the entire country to the grid would be expensive, said Van Mansvelt, especially in rural areas where greater distances between dwellings exponentially raised the cost. Government attempts to promote private investment in the sector could also result in higher prices for electricity, as investors need to make a return on their money, he added.

The ADB report said renewable energy technologies such as solar heating, biogas for cooking, and solar and wind power generation were potential options for extending energy to rural areas.

It also said Cambodia was looking to better exploit indigenous energy resources, namely coal and hydroelectricity, as a way of bringing down prices and boosting industrial-sector development. With power stations in the country tending to be fuelled by imported diesel, Cambodia has the highest electricity prices in the ASEAN region, it added.

“Once the country is able to tap indigenous energy resources and develop its electricity supply infrastructure, the share of the industry sector’s contribution to GDP can be expected to increase,” the report said, adding that would further boost energy demand.

The industrial sector was projected to need 15 percent more energy every year until 2030, taking its share of consumption from just 1.2 percent percent in 2005 to 14.9 percent.

A growing share of energy demand will be met by hydroelectricity, which is expected to grow 19.1 percent per year, the report said. Coal demand will grow 11.2 percent a year over the period, while the demand for oil will slow to 4.9 percent per annum, just half of its 10.3 percent annual growth rate from 1995 to 2005.

Over the period, coal is set to replace oil as the primary source of electricity generation, supplemented by hydroelectricity as more hydroelectric dams come onstream. Electricity generation from coal is expected to increase from zero terawatt hours (TWh) in 2005 to 4.3 TWh in 2030, while generation from oil will decrease from 0.8 TWh to zero TWh. Oil currently accounts for 95 percent of electricity generation, and the remainder comes from hydroelectricity.

Cambodia could learn from developed countries to reduce pollution and greenhouse gas emissions from coal power plants, the report said.

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