The price of power

The price of power
During the rainy season, the skies over Cambodia generate powerful electrical storms that kill more people [per sq km] than perhaps anywhere else in the world (135 people in the first 8 months of 2009). Power generation on the ground, however, is not quite as electric...

While Mother Nature over supplies, Cambodia’s national electricity company, Electricite du Cambodge (EdC), under supplies and struggles to keep up with an ever increasing demand.

In order to ‘top up’ supplies, Cambodia imports electricity from Thailand and Vietnam. Even so, only 20 per cent of the population have access to mains electricity. In remote rural areas people make do with diesel generators, car batteries, kerosene lamps and candles.

Cambodia has no national grid, provincial towns and cities have their own power generation plants and distribution networks with little interconnection. The power plants are small and are mainly fuelled by imported diesel, and prices reflect this.

The average price of electricity in Cambodia is $0.16 per kilowatt/hour and as high as $0.90 per kilowatt-hour in remote rural areas. Electricity prices in Cambodia are the highest in the Asean region.

The price of power is a major deterrent to foreign investors and undermines Cambodia’s ability to compete with neighbouring countries such as Thailand and Vietnam.

Reliable, affordable electricity is a pre-requisite to economic success. Without it, businesses have two choices; buy a generator or shutdown production every time there is a power cut. Needless to say, the sale of generators in Cambodia is a thriving business.

Cambodia intends to better exploit indigenous energy resources, namely coal and hydroelectricity, as a way of bringing down prices and boosting economic development. The country has significant hydropower resources and indications of large coal and natural gas deposits, which have yet to be fully developed.

Today, the wheels of development are in motion and Cambodia is on the verge of an energy revolution.

The government plans to triple Cambodia’s energy output from around 808 megawatts in 2009 to nearly 4,000 megawatts by 2020 (equal to estimated consumption) and supply 70 per cent of the population with electricity.

The first large-scale hydropower plant – the $280 million Kamchay hydro project in Kampot province – is due for completion in 2013.

A total of fourteen hydropower projects are planned, five of which are already under construction.

Despite criticism of large-scale dam projects by some observers, the government plans to robustly continue developing hydropower.

However, hydropower can only be used at full capacity for the duration of Cambodia’s rainy season; the rest of the year capacity is reduced to only one-third. For this reason Cambodia is also developing coal-fired power plants.

Cambodia is hoping to mine its own coal in the future, but for now coal is imported from Australia and Indonesia.

In July 2009 the government announced that a Malaysian company, Leader Universal Holdings Bhd., is to invest $160 million in a coal-fired power plant in southern Cambodia. The plant is expected to produce 100 megawatts by late 2011 or early 2012.

All new power generation plants in Cambodia are funded by the private sector.

Energy Outlook

According to the ‘Energy Outlook for Asia and the Pacific’ report released in November 2009 by the Asian Development Bank (ADB) and Asia-Pacific Economic Cooperation (APEC), Cambodia’s primary energy demand - driven primarily by the increasing demand for electricity - is expected to grow at 3.7 per cent per year from 2005 to 2030, outpacing the regional average of 2.4 per cent. The report says...

“Electricity demand will grow at an average annual rate of 9.9 per cent from 2005 to 2030. Slightly faster electricity demand growth is expected in the near term, with an average annual growth rate of 11.2 per cent from 2005 to 2015 versus an average annual growth rate of 9.9 per cent from 2005 to 2030. More commercial activities and greater production in the manufacturing sector explain the faster growth of electricity demand in the near term.

“To meet the fast growth in electricity demand, total electricity generation will increase nine-fold from 0.9 terawatt-hours (TWh) in 2005 to 8.0 TWh in 2030 at an annual rate of 9.2 per cent. That this growth in the generation of electricity is inferior to the growth in demand of 9.9 per cent per annum is due to Cambodia’s projected imports from its neighbours in the Greater Mekong sub region.

“In terms of power generation by energy type, coal generation is expected to increase from 0.0 TWh in 2005 to 4.3 TWh in 2030 while generation from oil will decrease from 0.8 TWh in 2005 to 0.0 TWh in 2030. Generation from hydro will grow at an annual rate of 19.4 per cent.”

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The government encourages investments in renewable and more affordable power resources. There is no public bidding process. Interested investors should submit their project proposals to the Ministry of Industry, Mines and Energy for evaluation and approval.

General Department of Energy
Ministry of Industry, Mines and Energy
45, Norodom Blvd., Phnom Penh
Mobile: +855 (0) 11 825 135
Fax: +855 (0) 23 218 634
Email: info@mime.gov.kh
www.mime.gov.kh

Electricity Authority of Cambodia
2, Street 282, Boeung Keng Kang 1,
Khan Chamkarmon, Phnom Penh
Tel: +855 (0) 23 217 654/ 23 987 898
Fax: + 855 (0) 23 214 144
Email: admin@eac.gov.kh
www.eac.gov.kh

Electricite du Cambodge
Street 19, Wat Phnom,
Daun Penh, Phnom Penh
Tel: +855 (0) 23 724 771
Fax: +855(0) 23 426 018
Email: edchq@edc.com.kh
www.edc.com.kh