Report recommends actions to increase Cambodia's renewable energy use

January 20, 2016

The Cambodian National Council for Sustainable Development (NCSD), in collaboration with the U.S. Agency for International Development (USAID) and its partners, launched a report today that highlights Cambodia’s need to set a formal target for renewable energy generation for sustainable and secure economic growth.

The independent report entitled “Switching On: Cambodia’s Path to Sustainable Energy Security,” supported by the USAID's Mekong Partnership for the Environment, recommends that the Cambodian government clarify laws on renewables – such as rooftop solar power – to supply electricity.

With Cambodia’s economy thriving, the authors of the report are optimistic that the country is well placed to diversify its power sources; however, with energy use increasing rapidly, sustainable power sources need to be prioritized.

“Meeting these demands in a sustainable way is perhaps the key development challenge facing Cambodia, and the broader region,” said Acting USAID Cambodia Mission Director Sean Callahan, who spoke at the launch. “With falling costs of solar and other renewable energy technologies, these are becoming more cost-effective and competitive with more traditional, centralized power plants such as coal and hydropower.”

Coal and hydropower currently make up about 60% of Cambodia’s energy use, while renewables account for less than 1%. Coal and hydro projects continue to multiply across the region, but research has shown they can seriously harm communities and food supplies, and contribute to global climate change.

The Cambodian government says boosting renewable power generation is a key goal and they are studying legislative options.

“Now is a particularly good time for Cambodia to be embracing a target and learning to accommodate advanced technologies in its power generation mix,” said Kheiv Mot, Secretary of State for the Ministry of Environment, in remarks at the event. “These technologies and changes will probably arrive sooner than people realise. There are therefore good reasons to start the ‘step by step’ journey to incorporating diverse technologies in the power supply mix.”

According to the report, Cambodia’s priority should be to “formalize an interim renewable energy generation target for Cambodia.” It specifies a potential interim goal of 10% of peak energy demand to be generated by renewables by 2020. But it first recommends a detailed study to determine a cost-effective but ambitious level.

“Cambodia’s rapidly growing economy means electricity demand is growing 20% per year. To continue to meet this demand, a great opportunity now exists to take advantage of technologies, such as solar to complement the existing infrastructure.” said report co-author John McGinley, the managing partner of Mekong Strategic Partners. “Recent structural changes in the costs of solar technology now means that Cambodia could produce electricity more cheaply than via traditional conventional methods. And most importantly this supply can be built very quickly to meet the nation’s unfulfilled demand for electricity.”

The report urges the government to establish a system by 2017 to compensate solar power producers for excess energy fed back into the grid.

It also recommends that Cambodia seek international development support from the Green Climate Fund, seek development assistance and training on renewable energy adoption, and consider removing VAT and import duty from solar generation equipment.

The report was supported by a grant to Mekong Strategic Partners through the USAID's Mekong Partnership for the Enivronment, implemented by Pact. The project brings regional working groups of business, civil society, and government leaders together to promote best practices and policies on infrastructure development in the Mekong region.

Download the report’s executive summary here.