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Lao energy not so ‘cheap’: experts

A view of the Don Sahong Dam in southern Laos, just across the border from Stung Treng province.
A view of the Don Sahong Dam in southern Laos, just across the border from Stung Treng province. Kimberley McCosker

Lao energy not so ‘cheap’: experts

During a visit to the Lao border on Tuesday, Prime Minister Hun Sen thanked the government of Laos for “selling electricity at a cheap price to Cambodia”. Experts, however contend a continued reliance on energy imports means prices will invariably remain high for consumers.

Electricity prices in Cambodia are, in fact, among the highest in the region. The most inexpensive option comes from the national grid, where prices range from $0.11 to $0.27 per kilowatt hour, but only about 25 percent of the country is connected to the grid.

Prices in neighbouring countries, meanwhile, cost an average of $0.08 per kilowatt hour. In Cambodia, some electricity suppliers use diesel fuel or charge transmission tariffs that can reach up to $1 per kilowatt hour.

Rather than buying “cheap” electricity from abroad, experts say, the first step in reducing the cost of electricity is upgrading the Kingdom’s grid.

“Less reliance on diesel is essential to get prices down, and some roof-top solar feeding the grid,” says Paul Chapman, executive research director of the consultancy AARN Global, via email. “The cheapest way is to continue to focus on coal in centralized generators for short- and medium-term expansion of the grid, and augment that with solar-battery micro-grids in hard to reach areas.”

According to Phillip Stone of the renewable energy company Star 8, Cambodia would need a 10-year plan to fully implement solar energy in the Kingdom, but solar energy supply could be fast-tracked through the creation of micro-grids.

“If the EDC were prepared to embrace solar, it would be feasible for them,” he said, referring to state utility provider Electricité du Cambodge. “The decisions they make today will have a big impact for 10 years.”

Cambodia’s government is using imported electricity as a quick-fix for the country’s energy shortage, Stone says. But relying on imported electricity leaves the country vulnerable to market forces and subjects consumers to additional costs.

Construction of the Lower Sesan II hydropower dam, which is expected to produce about 400 megawatts of electricity, is currently underway. But critics say the harmful environmental impact of the dam will outweigh the potential benefits of energy production.

However, Christoph Frei, secretary-general of the London-based World Energy Council, noted in an email that dams alone won’t fix Cambodia’s electricity shortage.

“Hydropower surely has great potential for development in [Cambodia], but with peak demand in energy coming outside of the wet/rainy season, alternative solutions need to be found to balance this source of energy, outside of the currently expensive diesel and import-based solutions that are pushing prices up.”

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