Logo of Phnom Penh Post newspaper Phnom Penh Post - The time to repair the roof is when the sun is shining

The time to repair the roof is when the sun is shining

Content image - Phnom Penh Post
A 10MW solar park project owned by Sunseap Asset (Cambodia) Co Ltd in Bavet town’s Chrak M’tes commune between Bat Sloek and Thlok villages. Por Nimol via Facebook

The time to repair the roof is when the sun is shining

The new decade brings Cambodia to a crossroads with energy generation. Access to energy has exceeded all targets, with 93 per cent of villages electrified last year.

However, exponential growth in energy consumption culminates every year to meet the GDP boom. The government has been accelerating investment in energy generation infrastructure, the most recent approval for two coal-fired power plants announced on Friday. The crossroads fundamentally is whether Cambodia drives down the road of fossil fuels or speeds past in an electric vehicle powered by renewable energy.

2020 Energy Plans

Energy consumption in the Kingdom continues to increase rapidly, with a 16 per cent growth predicted for this year by the Electricity Authority of Cambodia (EAC). The dry season of 2019 power supply fell short of demand by approximately 15 per cent, leading to crippling power cuts impacting the economy and small businesses. Minister of Mines and Energy Suy Sem has made assurances that there will be no energy shortages in the upcoming dry season. So where is this additional energy to come from?

EAC’s report predicts over half of this shortage is expected to be met by imports. Heavy fuel oil is also back. Previously phased out for being expensive, the plan is that 34 per cent of the new supply will be met using two 200MW generators purchased from Europe by Chinese independent developers.

While the government has begun to diversify the energy mix approving four solar projects last year, renewable energy will only comprise a minute 1.5 per cent of generation this year.

A fossil fuel future

The 2020 energy consumption forecast doesn’t even tell the full fossil fuel story. The most recent Power Purchase Agreement (PPA) with Laos is for a coal fired power station to generate 2,400MW of energy at 7.7 cents/kWh.

This example of future reliance on coal and fossil fuels is in contrast to the direction of the rest of the world. Based on current approvals, Cambodia’s 2030 energy mix looks likely to be 80 per cent fossil fuels, up from 34 per cent in 2018. Meanwhile, the rest of the world will be moving to 62 per cent renewables by 2050 according to Bloomberg New Energy Finance.

It’s easy to see why fossil fuels are at least initially the first choice: the technology is tried and tested and is used by many developed markets to provide continuous large power outputs.

Clean, green, mean alternative

However, the most recent solar PPA for a 60MW plant in Kampong Speu province will sell electricity to the grid at just 3.877 cents/kWh, almost half the price of coal. Solar produces no direct emissions into the atmosphere, provides local employment and can be built and operational in months. It also produces large amounts of energy when the hydro-plants struggle the most, during the long hot days of the dry season.

The Kingdom has phenomenal renewable energy potential with plenty of sunlight, land and large factory rooftops to place panels on and at least 500MW of wind potential.

The bottom line

The bottom line is that the economics of solar is cheaper than any other generation. The most recent solar PPA came in at half the price of coal.

Wind and solar energy are inherently variable in nature – they don’t produce energy all the time. Consequentially, the costs of integration including flexible supply systems and batteries must be considered. A recent International Energy Agency report estimated these to be 1-2 cents/kWh for Thailand. Even with these costs, solar remains cheaper than the cheapest coal project.

Increasing Imports

Just two years ago electricity imports from Thailand, Laos and Vietnam were at an all time low of 16 per cent of electricity delivered. The plans for this year will see these rise to nearly double to 30 per cent. If the planned Laos coal plant was completed tomorrow it would mean that 90 per cent of Cambodia’s energy generation would be imported.

Importing large amounts of electricity is undesirable for three reasons. It requires massive transmission lines that are expensive and lose power across the distances. Secondly, the money Cambodian’s are spending on electricity is increasing neighbouring countries’ GDP and employment, often with a higher cost. Thirdly, energy security is jeopardised when the exporting countries face their own shortages.

Cambodia spent $8 million buying electricity from Laos last year. When the new coal project in Laos comes online, this will increase the expenditure to over $1billion per year.

The crossroads

This brings us to the crossroads.

Scenario one: Cambodia continues to invest in fossil (coal, oil and in the future gas) fueled electricity, importing from neighbouring countries. The expenditure on energy imports increases. In this scenario, 80 per cent of energy by 2030 is sourced by large fossil fuel plants under agreements that will lock in prices and emissions for 30-50 years. We have already heard that the growth of coal in Asia will be sufficient to offset the efforts of carbon abatement from the Paris Agreement. Cambodia will suffer both the loss of potential GDP growth and the consequences of climate change. There will be international pressure towards transition to renewables, but change is hard now, 80 per cent of energy is sourced by large fossil fuel plants, locked in long-term contracts.

Scenario two: Cambodia generates all new energy demand from renewable sources distributed throughout the country connected to the grid and on factory rooftops. Local employment in the energy sector increases, the cost of energy reduces and supports a growing industrial economy. Cambodia leapfrogs developed countries internationally, reaching a share of 75 per cent of renewables by 2030. In fact, according to a recent report, this could be done with floating solar on the Tonle Sap alone. Electrification of transport and cooking complement this, improving urban air quality and eliminating the health implications of indoor pollution. A lower cost of electricity supports economic growth.

It may seem a completely implausible outcome for this large-scale transition to occur. And yet, Cambodia has already done it. In 2005, the majority of energy was produced by Heavy Fuel Oil. By 2018 it comprised only three per cent of the energy mix. The development of Cambodia has been remarkable and continues to disprove all predictions.

The next decade waits, what direction will we turn? Cambodia’s new roof should have solar panels, providing cheap energy to everyone.

Zelda Hollings is a renewable energy engineer and visiting research fellow at EnergyLab in Cambodia.


  • Hungarian exposes 90 to Covid in Siem Reap

    The Ministry of Health has discovered 90 people who have been exposed directly or indirectly to a Hungarian man infected with Covid-19. They all are required to quarantine at home and the hospital. The ministry is searching for other affected people. Among the 90, one is the

  • PM: West unfair to Cambodia

    Prime Minister Hun Sen released a message celebrating the International Day of Peace on Monday, saying that some major powers and western countries had been systemically cooperating to put political pressure on Cambodia as they did in the 1970s and 1980s. Hun Sen said pressuring

  • ‘Bad news is an investor’s best friend’ – unlocking investment potential in Cambodia

    It is time to shop. Economic woes provide good pickings for investors if they know where to look The poem If, written by English Nobel laureate poet and novelist Rudyard Kipling for his son circa 1895, is widely perceived as fatherly advice for John who would

  • PM requests Russia’s Covid vaccine

    Prime Minister Hun Sen has requested that Russia provide Cambodia with its Covid-19 vaccine after the former announced it planned on mass vaccinating its population next month. The request came on Thursday through the prime minister’s Facebook page as he met with Anatoly Borovik,

  • First ‘mobile kitchen’ in Cambodia enters service

    A catering company recently rolled out Cambodia’s first “mobile kitchen” – a $50,000 container capable of serving up to 200 people at a time. The kitchen is the brainchild of Seng Hok Heng Catering Services. At 4.4m-high, 6.8m-long and 2.4m-wide (expandable to 6.8m), the kitchen is equipped

  • Kingdom, China rebut basis for US sanctions

    The Council for the Development of Cambodia, the Ministry of Foreign Affairs and International Cooperation, and Tianjin Union Investment Development Group Co Ltd (Tianjin) have responded to US sanctions on Union Development Group Co Ltd (UDG), a Chinese-owned company currently developing the sprawling $3.8 billion Dara