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 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

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.

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.

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.