In Cambodia, electricity demands have been forecast to grow at 17.9 percent annually from 2012 to 2020. According to the 2008 population census, 80 percent of people live in rural areas, and the entire national population had grown to 15.5 million by 2014.
Cambodia’s capital, Phnom Penh, is alone responsible for 90 percent of Cambodia’s total electricity consumption. Expansion of distribution lines to the country’s rural areas is limited. As of 2013, only 22.5 percent of Cambodian households have access to distributed electricity.
According to the National Policy, Strategy and Action Plan on Energy Efficiency in Cambodia (2013), the national electrification increased to 34 percent; almost 100 percent of households in urban areas were electrified, but only 14 percent of rural households had access to electricity; 50 percent had limited access to alternative off-grid electricity sources such as diesel generators or solar systems, and more than 30 percent had no electricity access.
The current status of the Cambodian energy sector
By 2014, the total electricity supply in Cambodia was 4,861 GWh, a big leap from the 4,051 GWh in 2013. Generation of electricity within Cambodia also grew very significantly, from 1,770 GWh in 2013 to 3,058 GWh in 2014, largely from new hydro and coal-fired plants coming on stream. (The balance of supply is imported, mostly from Vietnam and Thailand.)
As of 2014, Cambodia’s electricity generation comes from four sources: hydropower plants, diesel power plants, coal-fired power plants and biomass. Amongst these electricity generators, hydropower has a huge contribution of energy sent-out, which 1,851.60 million kWh from hydropower, 326.97 million kWh from diesel, 16.79 million kWh from biomass, and 863.02 million kWh from coal.
China is the largest investor in building hydropower dams in Cambodia. According to the Ministry of Mines and Energy, Chinese companies have invested over US$1.6 billion in Cambodia’s hydropower sector.
Under the Power Development Plan 2008-2020, the Royal Government of Cambodia expects that the completion of eight hydropower dams and three coal-fired power plants, in addition to the imported electricity will generate approximately 3,576 MW.
By the start of 2016, local energy production accounted for around 75 percent of the country's total supply. Energy imports from Thailand fell by 41 percent in 2015 according to the Electricity Authority of Cambodia, while imports from Vietnam fell 5 percent.
Prospects and challenges
Energy imports are likely to continue for several years, however – the development of new high-voltage lines between Cambodia and neighboring countries is continuing. Private investors from other countries will remain the key players in the development of the Cambodian energy sector.
In mid-2012, the Minister of Mines and Energy stated that Chinese investment in the energy sector is crucial for the development of Cambodia:
“Most investors in the country’s energy sector are from China. Chinese investors have invested billions of US dollars in building hydropower dams and power transmission lines in Cambodia. The investment in this sector is very vital for Cambodia’s social and economic development and poverty alleviation.”
The Asian Development Bank (ADB) project database lists a number of projects supporting transmission, rural electrification, regional power connections, as well as general support for the power sector. The World Bank (WB) has committed support in the past for rural electrification and transmission. Cambodia has also secured bilateral funding in the power sector, and in September 2012, India agreed to provide a loan of US$70 million to fund high voltage transmission lines.
Last updated: 2 November 2016
Related to electricity production
Low electrification rates and over-dependence on fossil fuel imports have contributed to Cambodia ranking 120 out of 124 nations in the new World Economic Forum’s Global Energy Architecture Performance Index Report (EAPI) for 2014. The score is calculated by averaging the country’s scores in economic growth and development, environmental sustainability, access to energy and energy security. A significant shortfall of energy supply remains one of the greatest challenges for the Cambodian economy. Developing the energy sector is a key priority of the country’s National Strategic Development Plan for 2014–2018.
Policies on energy development
According to the Master Plan of the Ministry of Mines and Energy, all 23 provinces and Phnom Penh will be connected to the national power grid by 2018.
The Power Sector Strategy 1999-2016 aims to ensure a nationwide energy supply at affordable prices, so as to facilitate investment and development of the economy. The strategy encourage the exploration and utilization of socially and environmentally friendly energy resources.
The Renewable Electricity Action Plan (REAP) 2002–2012 aimed to provide cost-effective and reliable electricity to rural areas through renewable energy technologies. As part of REAP, Rural Energy Fund (REF) was formed in 2005 with World Bank assistance, and transferred to EdC in 2012. Throughout 2013, EdC provided US$4 million in funds for the REF to provide grant assistance for electricity connections to rural households, units of home solar power systems and funds for private licensees to invest in electricity infrastructure in rural areas.
The Rural Electrification by Renewable Energy Policy 2006 aims to create an enabling framework to increase rural electricity rates through renewable energy resources. Its key objective is that 2020, 100% of rural villages should have access to electricity and that by 2030; at least 70% of the nation should have access to the country’s electricity grid.
The Renewable Energy Development Program aims to target the remaining 30% of rural households through national grid electrification, mini-grids, and battery lighting. Through the 2006 policy, the Master Plan Study on Rural Electrification by Renewable Energy was developed to guide the implementation of renewable energy projects and programs. Hydropower has been seen as key to achieving these goals with a planned 70% of all future power in Cambodia being generated by hydroelectric dams. 15% of rural electricity is targeted to come from renewable energy sources by 2015.
Legal and administrative framework
The Electricity Law was passed in early 2001 with the aim of regulating the power sector, protecting consumers and ensuring a reliable and adequate supply of electricity at a reasonable cost. The law also sought to promote private investment and ownership of power facilities, and to encourage competition in the sector.
The roles of the main actors in the power sector are set out below.
- The Ministry of Mines and Energy (MME) is responsible for developing policies and strategies, power development plans, overseeing the electricity trade with neighbouring countries, major investment projects and management of the rural electrification sector. Along with the Ministry of Economy and Finance (MEF), MME is the joint owner of Electricité du Cambodge (EDC).
- In 1996, Electricité du Cambodge (EdC) became a wholly state-owned limited liability company, with responsibility to generate, transmit and distribute electricity throughout Cambodia. Its main functions are supplying electricity, developing the transmission grid and facilitating import and export of electricity to and from neighbouring countries.
- The Electricity Authority of Cambodia (EAC) is the power sector regulator, and is responsible for granting licenses, approving and enforcing performance standards, and determining tariffs, rates and charges for electricity. The EAC may grant various types of electricity license, including licenses for generation, transmission, distribution, retail, or a combined license.
- The Ministry of Environment (MoE) reviews and approves Environmental Impact Assessments (EIAs) and Environmental Management Plans (EMP) for all energy related projects.
- The Ministry of Water Resources and Meteorology (MOWRAM) issues water licenses for hydropower projects
- The Department of Forestry and Wildlife in the Ministry of Agriculture, Forestry and Fisheries (MAFF) has responsibilities relating to the management of wood-fuel and the production of crops as a source of renewable energy.
- Independent Power Providers (IPPs) are private companies that have received a license from the EAC to generate electricity for public consumption. IPPs generate electricity and sell it to the EDC, who then distribute to the national grid.
- Rural Electricity Enterprises (REEs) are privately-owned electricity providers, who provide power in rural areas. Although approximately 600 REEs provide power through diesel-based mini-grids and over 1000 operate battery charging stations, only around 250 REES are actually licensed by the EAC.
Last updated: 2 October 2015
Related to energy policy and administration
In 2003, a national sector review for hydropower was prepared by the Ministry for Industry, Mines and Energy (now Ministry of Mines and Energy) and the Cambodian National Mekong Committee (CNMC). This report identified 60 possible sites for hydropower development in Cambodia and estimated the country’s total generation potential at 10,000MW, of which 50% is on the mainstream Mekong, 40% on its tributaries and 10% in the southwest outside the Mekong basin.
The current situation of hydropower dam development
Due to the addition of Stung Tatai and Lower Stung Russei Chrum hydropower dams in 2014, the electricity generated by hydropower dams has seen a huge increase of 82%. From 2013 to 2014, it increased from 1,015.54 million kWh to 1,851.60 million kWh.
Operating dams include:
- Kirirom I (12MW) in Kampong Speu.
- Kamchay (193MW) in Kampot, which started operating in 2011.
- Kirirom III (18MW), which started operating in 2013.
- Stung Atai (120MW) in Pursat, which started operating in 2013.
- Lower Russei Chrum (338MW) in Koh Kong, which started operating in 2014.
- Stung Tatai (246MW) in Koh Kong, which began power production in 2014.
These six are connected to the national grid. There is also a hydro plant in Ratanakiri and another in Mondulkiri, connected to the Ratanakiri and Mondulkiri power systems of EDC.
The Lower Sesan 2 is being developed by China Huaneng Group and Cambodia’s Royal Group with a total cost of US$ 977 million, and with an installed capacity of 400MW and US$ 29.59 million as revenue annually. The construction of the hydropower dam is expected to be completed in 2017.
In early 2016 the Ministry of Mines and Energy set up a committee chaired by Energy Minister Suy Sem to resolve compensation and resettlement issues for 1,000 families displaced by the dam. Many affected families rejected the government’s compensation package of an 80 m2 house and 5 hectares of plantation land apiece, regardless of their old property values.
A number of other projects in the northeast are currently being studied for feasibility, including the Lower Sesan 3, Lower Sesan 1/5, Lower Srepok 3 & 4, and Prek Liang 1 & 2. In the southeast, the Stung Cheay Areng has also been studied.
Two large dams have also been considered on the Mekong mainstream at Sambor (465MW) and Stung Treng (980MW), however, there is considerable controversy related to the development of mainstream dams.
Legal framework and regulation for hydropower
The main government ministry responsible for the development of the Cambodian hydropower sector is MME (formerly MIME). The State power company Electricity du Cambodge (EdC) is responsible for day-to-day aspects of management of the electricity sector and the Electricity Authority of Cambodia (EAC) for issuing generation and transmission licenses.
There is currently no law on hydropower in Cambodia, although there are a number of laws with relevance to the development and running of such projects, including the laws related to investment, electricity, land, forests, water resources and the environment.
The first step in developing a hydropower project is to seek a Memorandum of Understanding with MME in order to conduct and prepare a feasibility study, which can typically take one to two years to complete. After completion of the study a company may enter further discussion with MME about developing the project.
All projects with investment of over US$50 million and all BOT projects must be approved by the Council for the Development of Cambodia (CDC), which is the highest decision-making body for private and public sector investment in Cambodia. In addition, under the Law on Water Resource Management, all hydropower projects require a water use license from MOWRAM.
All hydropower projects must be subject to an environmental impact assessment prior to approval, and environmental impact assessments (EIAs) should be conducted according to the procedures set out by the Ministry of Environment (MoE). The findings of the EIA should be considered in the final decision whether or not to approve a project.
As the hydropower sector in Cambodia is still in the early stages of development it is not clear what long-term trends will emerge. Likewise, it is still unclear if and how the benefits will be realized and whether or not impacts will be adequately mitigated.
It is clear that many of these large hydropower projects will flood large areas of land, for example, the Lower Sesan 2 will flood more than 340 km2. Many of the proposed sites are in forested areas with rich biodiversity and sensitive eco-systems, which stand to be severely impacted by this type of development. Impacts on fish migrations and access to forest products threaten to harm the livelihoods of local people, as does the inundation of agricultural and residential land.
The fisheries administration found in a study released in 2013 that the proposed Sambor and Stung Treng dams could reduce fish stocks, threatening Cambodia’s food security.
Large hydropower projects by their very nature will inevitably have considerable impacts on the environment, and must therefore be subject to adequate impact assessment, and if approved must have appropriate mitigation measures in place to reduce any negative impacts.
Prospects for the future
The Cambodian energy sector needs considerable development in generation and transmission if it is to meet the growing needs of the country and provide a stable and affordable power supply to potential investors in industry. The government sees hydropower as a priority area for development in the energy sector. Over recent years, investors and developers from China, Vietnam, Korea, Russia, Canada and Japan have all studied the opportunities for hydropower development in Cambodia.
Concerns have been raised by civil society and communities affected by hydropower projects that inadequate attention is being paid to the negative impacts and public consultation is inadequate. High quality environmental impact assessments and open decision making are crucial to ensure that the hydropower sector is developed in a way that minimizes harm while maximizing the benefits for Cambodia and its investors.
Last updated: 24 April 2016