Cambodia is overly reliant on developing large-scale hydro and fossil fuel-fired power stations, and should look to diversify its energy generation portfolio through cost-effective non-hydro renewable energy technologies that also offer fewer social and environmental costs, a study released yesterday advised.

In a report titled Switching On: Cambodia’s Path to Sustainable Energy Security, investment firm Mekong Strategic Partners said the government was relying almost entirely on existing and planned hydro and coal-fired power stations to achieve its goal of electrifying 100 per cent of the Kingdom’s villages by 2020. It urged authorities to consider more investment in non-hydro renewable energy technologies, which would allow the country to pursue energy security while increasing energy access, reliability and affordability.

“Rapidly falling renewable energy technology costs mean Cambodia can cost-effectively strengthen its energy security by balancing proposed investment in large-scale hydro and fossil generation with accelerated investment in solar and biomass technologies,” the report said.

Cambodia’s overall electricity demand has been growing by about 20 per cent a year due to economic growth and a widening national grid that is making electricity accessible to a larger population. Domestic power generation – around 3,000 gigawatt hours (GWh) last year and supplemented by imported electricity – is expected to reach 7,600 GWh by 2020.

To date, investment in non-hydro renewable energy has yielded just 35 megawatts (MW) of the country’s approximately 1,600 MW electricity generation capacity.

The study, commissioned by the National Council for Sustainable Development (NCSD), found that large-scale hydro and coal-fired power plants currently provide power for between $0.08 and $0.11 per kilowatt hour, once transmission and distribution losses are factored in. But with prices dropping on solar technologies, industrial-scale installations can currently generate electricity profitably for as low as $0.12 per kilowatt hour – or less if grant funding is available.

The authors noted that in addition to being close to par on price, solar power generation has the added benefit of being most plentiful during daytime demand peaks, and can boost supply during the dry season, when hydropower output is much lower. Solar power generation facilities also have a significantly smaller carbon footprint than hydro or coal-fired power plants, and in many cases can occupy the rooftops of existing structures.

The Stung Atay hydroelectric dam in Pursat province, for instance, requires a 2,800-hectare reservoir to generate 327 GWh. A solar farm could generate the same output on just 460 hectares of land.

“Cambodia could add 1,000 GWh to its generating output by constructing 700 MW of utility-scale solar [farms] on 1,400 hectares of land,” the report said.

It recommended several potential targets for scaling up sustainable power generation, including a scenario that would see 350 MW of non-hydro renewable energy capacity by 2020. Pursuing this target would enable the government to defer plans for some of the coal-fired plants it is considering.

Minister of Environment Say Samal said there were considerable “external costs” associated with coal-fired and hydropower generation – such as pollution and damage to fisheries, respectively – so the government would study how increasing non-hydro renewable energy capacity could mitigate the impact while reducing long-term energy costs.

“Diversifying the power mix would hedge against the risks of over-reliance on large-scale central generation, which could see stagnating revenue in the coming 10-15 years due to the increasing cost-competitiveness of alternative generation technologies,” the minister said in a statement.

Tin Ponlok, secretary-general of the NCSD, said Cambodia has high potential for generating solar energy, and with the cost of installation continuing to drop the government should grasp the opportunity to diversify its energy mix. However, he said the study is just the first step and more investigation is required to determine a course of action.

“We need to further study the economic, social and environmental impact to help the government prepare a policy,” he said.

Kong Pharith, general director of solar products distributor IMB (Cambodia) Group Co Ltd, said the private sector is ready to jump in once the government approves a policy on non-hydro renewable energy.

“Many investors are waiting for this government policy, but the question is whether or not it will be open for the private sector to invest in,” he said.

Pharith said to be commercially viable, the private sector would need assurance from the government that it would purchase electricity produced by private solar farms at current market prices.

“We would agree on the same price that the government buys power from Thailand, Vietnam and Chinese hydropower projects,” he said.

“The cost sunk into building dams could also be used to develop solar farms with the same capacity, and without any damage to forests, land and water,” he added.

According to the Electricity Authority of Cambodia, the Kingdom’s domestic power generation capacity reached 1,569 MW in 2015, accounting for 74 per cent of the country’s total power supply. Hydroelectric dams accounted for 927 MW of domestic capacity, with coal-fired and diesel-fired thermal plants amounting to 368 MW and 218 MW, respectively.