Energy security has been one of energy priorities for Cambodia in providing an adequate supply to meet increasing energy demand in the country. The impressive electricity access in Cambodia arose significantly from 2010 with a rate of 34% up to 98% by 2022.

However, Cambodia’s reliance on electricity imports is still considered high, with 25% of its national power sources in 2019 being imported from neighbouring countries such as Laos, Vietnam and Thailand. Meanwhile, the total electricity demand is at its peak in 2022 with approximately 16% of annual growth rate.

Moreover, Cambodia’s wide blackouts in 2013 and 2015 exposed how heavily dependent the country is on imported electricity. This disruption pressured the government to strengthen the effort to guarantee the nation’s energy security. Subsequently, Cambodia initiated the design of a Power Development Plan (PDP) for 2022-2040 to avert the next blackout and de-risking energy insecurity.

Through this plan, Cambodia aims for enhanced energy security by maximising domestic energy resources instead of depending on energy imports from other countries. The PDP lays out a specified roadmap to reach the goals for expanding generation, the transmission of high voltage (HV), as well as distributing power. PDP also offers Cambodia the best plan for transition to a cleaner grid, focusing on hydropower as the primary source of generation capacity and lessening the imports. To execute the plan neatly, the government provided the lists and maps for power development in Cambodia (including the required investment) between 2022-2040 period.

Based on the 7th ASEAN Energy Outlook (AEO7), Cambodia is projected to raise the total installed capacity to 10GW in 2050, more than three times the total capacity in 2020 (3GW), under the Business as Usual (BAU) scenario. Hydropower will have the largest capacity with 4.45GW in 2040, far above coal (2.26GW) and oil (2.01GW) as the next fuel with the highest projected capacity. Under the ATS (national policies) and APS (regional policies) scenarios, the total projected capacity of the power system in 2040 will be lower than that of the BAU scenario, with 7.1 and 6.2GW, respectively. Hydropower will remain the top contributor to the total capacity of the power sector, but coal and oil will be overtaken by gas, solar and wind. Under all scenarios, hydropower accounts for the major energy supply of the power sector in Cambodia.

Key barriers to expand and distribute power systems in Cambodia

Cambodia encountered many challenges in trying to fulfil the national and regional targets of the power system, particularly on the following three barriers. First is electricity affordability and accessibility. Electricity consumption growth along with the high electricity tariff across the nation has impeded households to afford their home energy needs while constraining Cambodia’s universal electrification. Moreover, the government reported that the remaining 1.73% or 145 villages left are beyond the reach of the distribution networks, which was the real challenge. Some of the villages are impenetrable for electrification since they are flood-prone locations and are surrounded by the sea.

Second is resiliency to the natural disaster as the impact of climate change is also hindering the government’s way forward in implementing PDP. To increase the share of clean energy, the PDP set out a target that hydropower will be the main domestic renewable resource in Cambodia with 2,973MW by 2040. On the contrary, the severity of Cambodia’s droughts is generating doubts about the future of hydropower. During the dry season, Cambodia had a 400MW electricity shortfall because hydropower facilities were unable to run at full capacity due to water scarcity.

Last is the investment availability. Cambodia’s new power development plan will require a larger investment in maximising the transition to a clean power system. In fact, the government would need to mobilise a total investment of $9.1 billion for generation expansion, and around 73% of the total investment required should be allocated to planned hydro dams, solar PV plants and BESS projects. Meanwhile, Cambodia still needs to improve its green finance ecosystem since the banks generally seek low-risk, demanding complete physical security on finance.

Lesson learned from Cambodia’s achievement in universal electrification

Despite the obstacles that the government encounters, Cambodia has successfully earned the distinction as one of the fastest-electrifying countries. Since the nationwide blackout, Cambodia is more ambitious to improve electricity supply for a better universal access. Before PDP, the government issued the Development of Rural Electrification Master Plan (REMP) and the establishment of the Rural Electrification Fund (REF) to seek supporting fund for the electricity sector in Cambodia. Those commitments with clear projects and well-defined objectives from the government led the Kingdom to a more reliable electricity supply.

Unlike REMP, the current power plan encompasses a wide range of scenarios within a 20-year period for the power sector. Whereas REMP, embedded in National Strategic Development Plan 2014-2018, doesn’t map out detailed strategies for the development. REMP also has similar objectives as PDP to achieve universal electrification while committing towards carbon neutrality. Eventually, the PDP will complement the REMP to exploit renewable energy and achieve equitable electrification nationwide.

The progress in the quality and availability of power makes it possible for Cambodia to reach the electrification achievement. Since hydropower is the biggest source in Cambodia, the government grasped this opportunity by encouraging the dam projects construction along the Mekong River. Nine hydroelectric dams with a combined installed capacity of 979MW are located throughout the nation. This hydroelectric dam drives power grids and is a significant turning point for the Kingdom’s goal of dependable power. In short, the government has been optimising the existing potential resource to improve the power generation availability.

The next lesson is Cambodia’s innovation in off-grid electricity to close the electrification gaps in rural areas. In 2019, the increased rate of electrification largely because of off-grid energy sources such as solar home systems, solar lights and rechargeable batteries. Whereas, 30.4% of rural households depend on off-grid as their main source of power, with solar mini-grids opening up new opportunities for Cambodia’s off-grid villages. The off-grid gives the encouragement to privately-run small-scale producing units to participate in the delivery of power to rural areas.

Last but not least, private sector inclusion dominates the institutional models for Cambodia’s electrical system. The guiding principle of Cambodia’s Electricity Law is that the greatest way to improve accessibility and affordability was through competition. Price convergence would result from the encouragement of private industry as the state lacked the resources to interfere. For example, Okra Solar, a Cambodian start-up, jointly collaborates with local utilities to provide electricity to rural populations and is supported by several international institutions. Providing a platform for knowledge sharing on lessons learned from Cambodia and its potential replication to other ASEAN countries with tailoring with characteristics and needs of each country would be necessary.

Auliya Febrianti, Ghiffari Aby Malik Nasution and Ambiyah Abdullah are officials at the ASEAN Centre for Energy (ACE).

The views expressed in this article are their own.