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Electricity prices in Cambodia are among the most expensive in the region due to a shortage of integrated high-voltage transmission systems and the high cost of imported diesel fuel. Power in provincial cities is more expensive and less reliable than the supply in Phnom Penh. In very remote rural areas, the only source of electricity may be a small portable generator. The Government of Cambodia set a goal of electrifying all villages by 2020 and connecting at least 90 percent of all households to grid-quality electricity by 2030.At the end of 2022, 245 villages, or 1.7 percent of the total villages remain to be electrified due to geographical difficulties, and about 88.4 percent of households had access to quality electricity.
There are two types of licensees in Cambodia: (1) Independent Power Producers are licenses granted to companies to generate and sell electricity to suppliers or industries according to Power Purchase Agreements with that supplier or industry. (2) Consolidated Licensees have generation licenses to transmit, dispatch, distribute, and sell electric power to consumers.
Major sources of local power generation are hydro and coal, and minor sources include diesel, wood, and biomass. In addition to local power generation, Cambodia also buys electricity from neighboring countries, especially during the dry season 2022, Cambodia''s total installed capacity amounted to 4,495 megawatts (MW), while 1,030 MW of power was imported from Thailand, Vietnam, and Laos. The Electricity Authority of Cambodia (EAC) predicts that the total installed capacity will increase to 4,945 MW of electricity in 2023. Cambodia generated 1,331 MW from hydropower plants, 1,025 MW from coal-fired plants, 642 MW of its energy from oil-powered plants, and 437 MW from solar.
In its Power Development Master Plan (PDP) 2022-2040, Cambodia announced that there would no more investment of coal power plants after 2024, and renewable energy (domestic and imported) would play a significant role towards Cambodia''s transition to clean energy. In March 2023, Cambodia launched the "Principles for Permitting the Use of Rooftop Solar Power," to regulate rooftop solar installations and ensure "transparency, accountability, and fairness."
There is tremendous demand in Cambodia for diesel generators as backup power, on-site power plants, and power generation in rural areas not served by public utilities. As with other types of infrastructure development, the government has only limited funding for power generation projects, but U.S. suppliers should check the state-run utility Electricité du Cambodge (EDC), World Bank, and Asian Development Bank (ADB) websites regularly for potential new projects in the energy sector. The Cambodian government has stated in its PDP that it will need $9 billion of investment to develop new power plants and expand the national grid, of which $2.5 billion has been approved between 2022 and 2025.
Opportunities exist for power generation and transmission equipment.The Cambodian government encourages usage of solar energy technologies, but U.S. companies are advised to review new regulations that might impact their business practices.
Ministry of Mines and Energy
Electricité du Cambodge
Electricity Authority of Cambodia
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The Kingdom of Cambodia is at a critical phase of its developmental journey, particularly in its power development. In striving to better its economy, improve living standards, and embrace sustainable practices, Cambodia''s power development plan is of critical significance. Asian Insider''s partner for Cambodia, Klaus Kretzschmar explores these plans and considers the effect these will likely have on developing the economy and providing assurance for international investor and developers.
The Ministry of Mines and Energy announced Cambodia''s Power Development Plan (PDP) in 2022, setting ambitious goals until 2040. Presently, Cambodia''s energy sector is characterised by limited access to electricity in rural areas, reliance on imported energy sources and inadequate infrastructure. Most electricity generation comes from hydropower dams, leaving the country vulnerable to fluctuations in water levels and the impact of climate change. Resulting higher electricity prices has hindered industrial growth and dampened foreign investment, limiting economic progress.
Cambodia''s electricity demand has skyrocketed in recent years, driven by industrial expansion and a growing urban population. According to the PDP, peak demand rose from 508MW in 2012 to 2,026MW by 2021, an average annual growth rate of 19%. This rapid growth continues, requiring significant further investments in generation capacity.
The PDP 2022-2040 was developed with three main objectives:
1 – to fulfil the future demand for power adequacy with the supply of reliable and affordable electricity across all sectors in Cambodia
2 – to strengthen energy security by reducing the dependency on energy imports and maximising the development of domestic energy resources.
3 – to increase the share of clean energy, including renewable and variable renewable energy, and energy efficiency, by ensuring reliability and affordability of supply, to contribute to the achievement of Cambodia''s national environmental goals and global commitments to reduce greenhouse gas emissions.
Cambodia possesses abundant renewable energy resources, including solar, wind, biomass, and hydropower. Leveraging these resources presents a promising avenue for sustainable energy development. Solar energy holds immense potential, given Cambodia’s tropical climate and ample sunlight throughout the year. Investing in solar infrastructure diversifies the energy mix and reduces dependence on fossil fuels while mitigating environmental degradation. While the PDP shows an intention to boost solar production by 70% by 2030, a recent Asian Development Bank study has shown that Cambodia has the potential to generate as much as 10,000MW in solar power, while a separate UN Development Program reports a potential for a further 5,000MW of offshore wind power.
While hydropower dominates Cambodia’s energy landscape, there are opportunities for expansion and innovation. The government’s commitment to developing large-scale hydropower projects, such as the Sambor Dam on the Mekong River, underscores its strategic commitment. However, this is balanced with the need for environmental impact and concern for local communities.
According to the PDP, it will cost USD 9 billion to expand domestic generation capacity. USD 2.5 billion has already been allocated towards ongoing projects by 2025. The remaining USD 6.5 billion will be invested in hydro dams, solar PV plants, natural gas and biomass along with improved storage infrastructure from 2026.
The PDP offers a strategy to transition towards a cleaner power grid while meeting existing government agreements. The plan focuses on reducing emissions through the deployment of renewable energy sources, energy efficiency upgrades, and importing power from neighbouring systems through interconnections. The PDP outlines a comprehensive long-term plan for Cambodia’s power sector that includes forecasts of demand, expansion of generation, and a plan for transmission and distribution from today until 2040.
Improving reliable access to electricity in rural areas is a priority under Cambodia’s power development plan. Grid modernisation initiatives, coupled with decentralised off-grid solutions, will improve electricity supply and empower rural communities. Upgraded technologies, such as microgrids and solar home systems, offers cost-effective and environmentally friendly alternatives to traditional grid extension.
As a part of this the Cambodian government has also developed their National Energy Efficiency Policy (NEEP), a framework containing measures to reduce Cambodia''s energy consumption by boosting efficiency. It sets national targets for reducing consumptions as well as sector-specific targets.
Meanwhile, Cambodia will continue to import some power, even by 2040. This is mainly from neighbouring Laos and Thailand at around 3,000MW combined. Cambodia faces some challenge in meeting the needs of an expanding economy while ensuring greater energy reliability and at the same time diversifying power generation while reducing emissions.
Cambodia''s power development plan sets a strategy for ongoing investment in power generation, along with improved grid capacity and efficiency. Opportunities exist for capable international energy companies to enter the Cambodia market.
Asian Insiders offers experience in the economy and energy infrastructure of Cambodia. To discuss investment and partnership opportunities in Cambodia''s power development plan, please contact Jari Hietala, Managing Partner: jari.hietala(at)asianinsider or Klaus Kretzschmar, Cambodia Partner: klaus.kretzschmar(at)asianinsiders
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SOMA Group Co., Ltd. founded in 2007, is one of Cambodia''s leading local conglomerateand a Management & Consulting firm.Today, the Group comprises of 10 subsidiaries operating in 5 industries.Based in Phnom Penh, SOMA Group companies now employs more than 2,500 staff countrywide.
Established in 2012, Soma Energy''s primary focus was power generation, EPC and especially renewable energy.
In 2013, we completed a turnkey Biogass Power Plant construction for Battambang Agro Industry (BAI) in Battambang Province. In 2014, Soma Energy received a license to operate the Biomass Power Plant and 2016 a license for 5 MW Solar Ground Mounted to generate electrical power in Staung, Kampong Thom Province.
In 2019, the development of Ground Mounted Solar Project, endorsed by Electricity Authority of Cambodia (EAC), is significant step forward in renewable energy sector in Cambodia. Soon we will generate electricity prower from 1.5 MW gound mounted solar to supply our citizen in Staung, Kampong Thom.
To be the leading service provider of electricity power, electrical products and most reliable enginering services, expecially renewable energy, by the innovation and affordable technology in Cambodia
We declare our purpose as a company and serves as the standard of products and services help to conserve energy, to use energy efficiently, and generate clean renewable energy. The SOMA''s experienced staffs will deliver our standardized system to ensure the most efficient and consistent product and/or service to customer.
We commit to provide of electricity power, electrical products, power generator set and enginering services, expecially renewable energy, by the innovation and affordable technology in Cambodia.
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