Cambodia Energy Situation

Background Information

The Kingdom of Cambodia is located in the tropical region of Southeast Asia in the Lower Mekong region. The physical landscape is dominated by the lowland plains around the Mekong River and the Tonle Sap Lake. Of the country area 181,035 Km2, approximately 49% remains covered by forest. There are about 2.5 million hectares of arable land and over 0.5 million hectares of pasture land. The climate in Cambodia is tropical and subject to both southeast and northwest monsoons. Cambodia has a population of around 14.7 million people, with a growth rate of about 1.8 % and an average age of the population of 19 years.

Cambodia's infrastructure, including the power sector, was severely damage by years of war. After restoration of order in the country the Government has followed a program focused on rehabilitation and development of the basic infrastructure, with the aim of improving the socio - economic conditions for further step of development. Cambodia is an agricultural country, where over 85% of the people in Cambodia live in rural areas with agriculture as the main profession of subsistence. Their livelihood depends mainly on agriculture: farming, fishing, livestock, forest and non-forest products. For heating, the majority of energy they use are fuel-wood, charcoal, agricultural residues collected mostly from forest areas close to their villages.

Energy Situation

Key Energy Figures for Cambodia (Source: IEA 2008)

Population	14.7	million
GDP	7.52	billion 2000 USD
GDP (PPP)	45.78	billion 2000 USD
Energy Production	3.64	Mtoe
Net Imports	1.61	Mtoe
TPES	5.22	Mtoe
TPES per Capita	0.36	toe/capita
Electricity Consumption	1.64	TWh
Electricity Consumption per Capita	112	kWh/capita

Electricity

During the 1970s, the electricity sector in the Kingdom of Cambodia was seriously damaged due to the civil war from 1970 to 1979. During that time, there was only one transmission line in the Kingdom of Cambodia connecting the Kiriom I Hydropower Station to Phnom Penh capital town with a voltage rating of 115 kV and length of 120 km which ceased to operate since 1973 when most electricity related facilities including generation, transmission and distribution facilities were nearly destroyed.

Due to the effort of Cambodian government, the electricity sector was rehabilitated since 1995, however till present there is no national electricity network yet and all electricity supply is based on 24 small isolated electricity systems.

EdC, the government-owned utility, serves Phnom Penh, Sihanoukville, Siem Reap, Kampong Cham, Takeo and Battambang, accounting for nearly 90 percent of total electricity consumption. EdC serves approximately 10 percent of the population with most of its customers located in Phnom Penh. There is no national grid and towns are supplied through isolated systems. Nearly half of EdC’s installed power supply capacity of 140MW is purchased from 2 IPPs (63 MW). Despite the creation of substantial IPP generation capacity and EdC’s commendable efforts to reduce system losses from nearly 25 percent to 13 percent, the quality and reliability of supply in Phnom Penh continues to be poor.

Electricity demand in Cambodia is growing rapidly with annual growth rate of 21.5% for electricity supply and 22.3% for electricity demand in the average of 5 years from 2003 to 2008. In terms of electric energy production in 2008 was 1,681 GWh with only 695 GWh in 2003 and for electricity demand, it was 314 MW and 134 MW respectively. In particular, the highest record of growth rate is being updated year by year and reached 26.7% and 27.5% for electricity supply and electricity demand respectively in 2007.

In 2008 the annual electric energy production was 1,681 GWh which corresponds to the annual electric energy consumption per capita of 120 kWh. Today, only 20% of households have access to electricity. The Phnom Penh capital zone, in particular, shares 80% or more of national total electricity consumption.

The electricity generated by power plants using imported heavy fuel oil and diesel oil shares as high as nearly 80% of total energy generation in Cambodia, and this condition provides the electricity sector with unstable conditions in terms of energy security. The two (2) mini hydropower plants existing in Cambodia are generating only 3% of total electricity generation in Cambodia.

According to the available electricity demand forecast in Cambodia prepared by the Ministry of Industry, Mines and Energy in 2007 based on the demand forecast by World Bank and KEPCO in 2006, the electricity demand projection in Cambodia in 2024 is 3,045.33 MW and 16,244.61 GWh for capacity and electric energy respectively.

Fossil Fuels

At the moment, all commercial fossil fuels available in Cambodia (2008: 1.549 ktoe) are imported in the form of LPG, gasoline, diesel and other petroleum products.

Oil and Gas

Oil reserves have been found off the shore of Cambodia. Exploitation is supposed to start soon. The size of the oil fields are unkown so far. Foreign investors are strongly involved in the exploitation process. This, together with high corruption rate in Cambodia, contributes to the assumptions of many that the broader population will not profit from these natural resources. 

Coal

During the period 1958-61, a mineral countrywide survey mission from China reported indication of coa l in Kampot, Kampong Thom, Kratie, Stung Treng and Battanbang provinces. One deposit in Phum Talat in Stung Treng province has been identified and the reserve has been estimated around 7 million tons, the exploitation might be feasible for application in cement production and for domestic fuel. The inventory and feasibility study of coal deposits in Cambodia are needed.

Renewable Energies

The Rural Electrification Strategy (RES) of the Royal Government of Cambodia (RGC) policy for rural electrification aims to substantially scale up access to electricity services for rural area, where about 85% of the Cambodian population lives there and today only 15% of them has access to electricity services and at the same time to improve the standard of living, reduce poverty and foster economic development.

The important part of RES is the mobilization of Cambodian Renewable Energy (RE) sources, where they are cost effective, and the promotion of RE technologies.

In order to promote RE development, the RGC has formulated RE policy which lays down the policy intention, objectives and guidelines for developing the requisite infrastructure for providing renewable electricity services in rural areas.

Cambodia has abundant RE sources such as mini/micro/pico hydropower, solar, biomass and other.

At present, the development of RE sources in Cambodia is very slow in comparison with its neighbouring countries, because of the lack of experiences and funds, and inadequate data. Hence the utilization of these sources is also insignificant in the contribution to the total energy supply mix, which is mainly based on imported fuel oil for power generation.

Biomass

Biomass is the main source of energy for Cambodia, mainly in the form of the wood and charcoal. Wood-fuel serves about 85% of the total energy demand and is used for domestic cooking and also extensity by industry, but currently is not used for power generation.

The New Energy and Industrial Technology Development Organization (NEDO) has conducted an assessment of the potential for using biomass as a source of renewable energy in Cambodia.

Biomass technologies for power generation and heating process should be studied and developed. Based on existing crop and livestock residues and if assumes 35% conversion efficiency, the preliminary assessment of biomass generation potential estimate at around 18.852 GWh/yr with 2 MW already exploited.

Solar

Based on insulation of 5.10 kWh/sq.m and 0.02% of Cambodia's land area, the preliminary solar power generation potential estimate is about 7,665 GWh/yr and solar hot water potential estimate at 17,995 GWh/yr.

In Cambodia, the use of solar photovoltaic technology has started since 1997 for lighting, radio, TV and telecommunication in the rural areas. The total installation is about 1,150 kWp and primarily has been installed on telecommunication repeater station in remote areas. Most of the solar systems resulted from donor projects supported by SIDA, NEDO and other donors. All the equipment is imported from other countries.

Wind

The potential of wind energy in Cambodia is small in account of average wind speed of 3m/s and less. The estimated wind generation potential is 3,666 GWh/yr. However, the southern coastal area (Sihanouk Ville) and mountainous areas in the southwest and northeast of the country have favorable wind condition for wind power generation because of average wind speed is around 5m/s.

Wind energy has been utilized for water pumping in central part of Cambodia (Prey Veng province) which is supported by the NGO with installed capacity of 700 kW.

Mini/Micro/Pico hydro power

Cambodia has an enormous water resource for hydropower development and in some parts of the country, mini/micro/pico hydropower may provide opportunities for rural electrification. The assessment of theoretical potential of mini, micro, pico hydropower is about 300 MW with present installed capacity of 1.87 MW. At present, there is one mini hydropower plant with 1 MW installed capacity and 2 micro hydropower plants with total installed capacity of 370 kW which are in operation under the responsibility of Provincial Electricity Unit of Electricite Du Cambodge (EDC). There are also private owned micro and pico hydropower plants with the installed capacity ranged from 1 kW to 30 kW in the northern provinces and the units are imported from Vietnam or China.

Often, however, likely users live far away from the economically viable production sites which are mostly located in mountain areas. The costs for distribution networks hence make small hydro power in many cases unaffordable.

Other RE sources

Geothermal: no assessments available, some thermal springs, but appear low-grade. Tidal: no assessments available, low apparent potential.

At present the RE development is still at the beginning stage and need more support from the Royal Government to overcome serious barriers to promote RE development and to facilitate private sector participation.

Policy framework, laws and regulations

Electricity Sector Development Policy

Cambodia faces a major challenge to develop an adequate and reliable source of electricity in the years ahead. Based on intensive studies of the best means of providing a national electricity supply network, the Royal Government of Cambodia (RGC) formulated an electricity sector development policy in October 1994, which aimed at:

1. Providing an adequate supply of electricity throughout Cambodia at reasonable and affordable price.
   
2. Ensuring a reliable, secure electricity supply at prices, which facilitate investment in Cambodia and development of the national economy
3. Encouraging exploration and environmentally and socially acceptable development of energy resources needed for supplying to all sectors of the Cambodian economy, and
4. Encouraging an efficient use of electric energy and minimizing detrimental environmental effects resulting from electricity supply and use.

In order to meet the growing demand for electricity over the next 20 years, the RGC is formulating an electricity sector strategy which consists of:

1. Development of generation
2. Development of Transmission
3. Power trade with neighboring countries, and
4. Provincial and Rural Electrification

The need for Cambodia will be to find the energy sources in order to meet future electricity demand and reduce its dependence upon imported fuel oil, to strengthen its energy security and to exchange of electricity with neighboring countries.

It was reported that the major natural resources for power generation available in Cambodia is hydropower with potential of 10,000 MW or more, however, the hydropower capacity already developed in Cambodia is very limited to be only around 13 MW and 10,000 MW is large enough compared with the next 15 years domestic electricity demand of around 3,045.33 MW in 2024.

In summary, it is the strategic plan for the electricity sector of Cambodia to procure the required electric energy by the electricity import from neighboring countries for the coming several years and, after that, to utilize hydropower, which is the major source of domestic renewable energy, as much as possible in parallel with development of coal thermal plants step by step.

Rural Electrification Plan

Eighty five (85) percent of the population of Cambodia is living in rural areas and most of them cannot access the electricity. The provision of rural energy is a key factor in the rehabilitation and development of Cambodia. Electricity is very important for the improvement of living standards and an important infrastructure requirement for agricultural and small scale industrial development in the rural areas.

The Royal Government of Cambodia has formulated a rural electrification strategy to provide the best electricity supply option for rural areas. By 2020, the objective is for all villages to have access to electricity in different forms; by the year 2030 - 70% of all rural households should be electrified. The main components of the Rural Electrification Strategy are as follows:

1. Grid expansion from the existing grids
   
2. Diesel stand alone
   
3. Cross border power supply from neighbouring countries (Thailand, Viet Nam and Lao PDR) and
   
4. Renewable Energy (solar, wind, mini/micro hydro power, biomass, biogas, etc.)
   

In particular for remote rural areas located near streams with year around flow, micro hydropower development is contemplated. Micro hydropower stations, which generate about 300 W to 1 kW are quite common and require little capital. They will be ideal for small rural communities. If a micro hydropower potential exists in the vicinity of a village, it should be exploited for providing electricity supply. As micro hydropower scheme is site specific, it is not possible to include them in a generalized rural electricity supply strategy, except, to mention that where possible they should be investigated as a source of rural electricity supply in the first instance.

On the other hand, in order to facilitate access to electricity supply at reasonable and affordable price in rural areas, the Government of Cambodia has established "Rural Electrification Fund" for enabling the development of electricity supply facilities in such areas. The objective of the fund includes to promote and encourage the private sector to participate in providing the sustainable rural electrification services.

According to the "Master Plan Study Rural Electrification by Renewable Energy in the Kingdom of Cambodia (June 2006, JICA), the maximum use of renewable energy including micro hydropower was proposed to secure sustainability for source of electricity. This study recommended the off-grid electrification with micro hydropower scheme for such mountainous or hilly areas where hydropower potential is bigger than village size demand and village exists within an economic distance for transmission from the potential site as the most promising electricity source for such areas. The 145 number of micro to mini hydro power potential sites in the capacity range from 1 kW to 2,585 kW were identified in this Master Plan Study.

Also, the objective of Rural Electrification Fund for the next five years term includes the provision of grant for development of 850 kW of micro hydropower and 6,000 kW of mini hydropower plants as well as 120,000 solar home systems.

Means of facilitation

There are basically two means of facilitation used for the improvement of rural energy supply:

Rural Electrification Fund (REF)

The REF is part of the REAP and aims at sustainable market development for renewable energies. Mini hydro plants and solar home systems are eligible to recieve subsidies up to 25% of total investment costs. The International Development Association (IDA) and der Global Environmental Facility (GEF) provide the money for the REF.

Fiscal Incentives

Several fiscal and investment incentives and investment have been agreed for project developers active in renewable energies in a law from 2003. Yet, it is not clear, in which degree companies can use these incentives and up to which amount they can be granted. Also, information on reduced custom duties on renewable energy equipment varies greatly.

Institutional Set-up

The Ministry of Industry, Mines and Energy (MIME) However, the oil and gas sector is handled by the Cambodian National Petroleum Authority (CNPA).

General Directorate of Energy (MIME)
The Department of Energy Development is the principal government agency for the energy sector planning and consumption and data collection, and has to work closely with other governmental departments. For the sustainable development of energy, emphasis is given to hydropower and renewable energy sources. Therefore, better coordination with the Department of Forestry and ministry of environment, through a broader energy plan, encompassing the fuel mix of possible energy sources is needed to ensure adequate supplies of fuel-wood throughout the country.

The Electricity Authority of Cambodia (EAC) is responsible for regulating the electricity industry and has the following duties: licensing, tariff setting, solving the disputes between producers/suppliers and consumers, setting up the uniform accounting standards, enforcing the regulation, review of planning and financing performance.

Electricity du Cambodge (EdC) is a government owned power utility responsible for the generation, transmission and distribution of power in nine areas of the country.

The Department of Forestry and Wildlife under the jurisdiction of the Ministry of Agriculture Forestry and Fisheries (MAFF) is currently responsible for implementing a government policy, in cooperation with other government departments to ensure the management and protection of the nation’s forests, for the sustainable future and stability of forest biodiversity, through:
· Management of fuel-wood
· Management of concession areas
· Reforestation in the concession forestry as well in the community forestry

Donor activities in the energy sector

GTZ / GIZ activities

• Under the GTZ/GIZ Private Sector Promotion (PSP)(2008-2011) rural electrification based on renewable energies was part of two local PPP:
  

1. Solar Lanterns: One PPP dealt with building up a sustainable business model for solar shops with Kamworks, a social enterprise working with solar energy products. The PSP Program was able to initiate a project establishing a network of solar shop operators providing low-cost solar energy solutions to rural populations. Through this initiative, Kamworks was able to select, recruit and train a number of solar shop operators; thus, creating a network of entrepreneurially-minded solar energy providers throughout Phnom Penh and various rural areas.
   
2. Jatropha:GTZ-PSP has introduced a pilot project to make electricity available to rural locations through renewable energy sources, decreasing the dependence of fossil fuels. The project implementation started in Paoy Cha commune in June 2008 in collaboration with the Rural Electrification Enterprise (REE) of a local entrepreneur. The business model is based upon bio-fuel production, using oil from the seeds of the Jatropha cura – a common shrub usually grown in rural Cambodia, which is used as a natural fencing material to prevent livestock from foraging through local crops. Locally produced Jatropha oil hence replaces part of the diesel needed. Moreover, the project extended the household and business connections of the REE grid.
   

• GIZ Renewable Energies (2011 till June 2012)
  

The project will focus on  innovative pilot projects in corporation with the private sector to establish sustainability beyond the project phase: Pilots in the field of solar and wind pumps (for irrigation and water supply), bio-gasification (rise husk, etc.) and further business models regarding Jatropha are under discussion.

Further Reading

IEA: Data and graphs on energy figures for Cambodia www.iea.org/country/n_country.asp

The World Bank: Cambodia and Energy

UN: Cambodia Energy Sector Strategy