Cambodia to reduce reliance on hydropower and develop coal and solar capacities

Because of reduced hydropower generation due to draughts and lower water levels in the dams, Cambodia, which relies heavily on hydropower, has experienced power shortages.

The country’s new 10-year plan offers limited impetus for the construction of mainstream dams and seeks alternative sources to meet the demand for electricity from coal, LNG, solar PV and imports from neighboring countries.

Around 83 percent of the new generation capacity built between 2020 and 2030 will be from coal (56 percent) and solar PV (27 percent), while the remaining new capacity will probably be accounted for by hydropower (8 percent) and oil (9 percent), according to GlobalData.

“Cambodia had predominantly looked at hydropower for meeting its power needs. Hydropower accounted for 58% (nearly) of the generation in 2018, falling by 45% (approximately) of the generation in 2019. The droughts in 2019 had brought down the share of hydropower in the nation’s generation mix significantly, compelling to opt for alternative sources to support the generation mix and avoid such unforeseen circumstances.”

Ankit Mathur, practice head for power at GlobalData.

The river Mekong offers a strong potential for hydropower production in the region. Nevertheless, there has been considerable resistance from environmentalists to the development of possible harm to the fisheries and agricultural lands adjacent to the basin.

In order to extend and improve the electricity system, the government is keen to invest. The new transmission and distribution network is projected to expand at a compound annual growth rate (CAGR) of 11.8 percent by 2025, nearly doubling the total transmission line capacity.

This expansion is likely to ease the problems of transmission and distribution and boost the newly developed capacity.

“Cambodia’s recent approval of more than $830 million worth electricity infrastructure projects, including a 150MW hydro project, 265MW coal-fired plant and three transmission lines, clearly draws the line for lower hydropower development and focus on alternative sources. The country looks to build a sustainable generation mix that will support the expansion of the national grid and trim the electricity prices with lower imports. The increased expansions of the coal-based power plants and LNG suggest that the country is significantly reliant on imported fuel and electricity and it will continue to do so until the lined-up infrastructural projects materialize completely.”

Ankit Mathur, practice head for power at GlobalData.