Cambodia's first coal-fired power plant, which is expected to fill shortages in demand by producing an additional 100 megawatts of electricity every year, commenced full-time operations yesterday.

But despite the energy boost, which could finally stabilise the power supply, electricity prices aren’t expected to go down, and environmental concerns about the plant are staring local residents in the face.

Representatives from Malaysian company Leader Universal Ltd (LU), which built the plant, joined Prime Minister Hun Sen and officials from the Ministry of Mines and Energy for the official launch yesterday in Stung Hav district, Preah Sihanouk province.

Operating under local subsidiary Cambodia Energy Ltd, LU completed the $195 million project in November after three years of construction.

LU received a 33-year build-operate-transfer (BOT) land concession from the Cambodian government in 2010 for the project – three years for construction and 30 years for operation before handing the plant back over to the state.

The Malaysian firm has also built the necessary power transmission line and substation that will ferry increased supply (once power reaches Phnom Penh) east to Kampong Cham province.

Presiding over yesterday’s official opening, Hun Sen said the plant will put domestic supply closer to demand, providing a consistent source of energy for Phnom Penh, where power shortages have long frustrated city residents.

“Phnom Penh energy usage has increased tenfold since the 1980s, when usage was about 30 megawatts. Today it is about 400 megawatts,” he said.

The addition of this project and a partially Chinese-owned coal-fired plant slated to open later this year will bring the total number of domestic and foreign energy sources, including local hydropower and imported energy, to 11.

“From this year onwards, maybe people in Phnom Penh will not complain anymore. And maybe also people in Kampong Cham,” Hun Sen said, referring to sporadic power outages.

But while Hun Sen said that more domestically sourced power was on the way, he added that prices will ultimately stay the same, as the company works to swing a profit while repaying banks that helped to finance the project with loans.

“The usual price for electricity is 2,000 to 3,000 riel per kilowatt hour. If we could reduce to 1,000 riel or even less, we would do it. But we just cannot do it,” he said, citing the need for further investment in the energy sector.

Since it was first proposed in 2008, the Preah Sihanouk plant, which imports coal from Indonesia, has been met with fierce criticism over potential environmental and health impacts.

“The really big issue with coal is that it has the highest greenhouse gas emissions of any fossil fuel per unit of energy gained,” said Eric Kemp-Benedict, director of the Stockholm Environment Institute’s Asia Centre. “Coal plants are an infrastructure with a very long lifespan, so when you install a coal plant you’re talking 30 years of energy production with high greenhouse gas emissions.”

Residents who live close to the plant voiced fears over worsening air quality and dangerous run-off from the plant’s operations.

“We are concerned with the impact on our health as well. And the environment that we live and depend on every day,” said Nget Neav, 45, from Kaong Kang village, about 10 kilometres away from the plant.

Gnin Heng, a 58-year-old fisherman who lives in Stung Hav district, said he is worried about his livelihood.

“We are always concerned because it is new and we are afraid that the waste of the power plant will affect the flow and the health of the waters here, hurt the fish and essentially our fishing,” he said.

Cambodia Energy Ltd spokesman Tan Chin Jeen said the company had adhered to all requirements in its environmental impact assessment, and that additional protective measures were in place.

“We have installed an electrostatic precipitator, or an air cleaner, which removes all of the ash from the smoke that you would normally see rising from the top of the chimneys,” he said.

According to the CEL spokesman, the company has rallied significant commercial interest in purchasing the ash-waste, which is removed from the residual smoke and used in producing concrete.

ADDITIONAL REPORTING BY LAIGNEE BARRON