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A Bright Future in Cambodia’s Energy Sector?

 
 

Cambodia is hungry for electricity. Overall demand has grown an average of nearly 20 percent per year since 2010. At the same time, the country suffers from a significant energy shortage, making electricity in Cambodia the most expensive in the region, as high as $0.20 per kilowatt hour (kWh). In neighboring Vietnam, customers pay only $0.07 per kWh, and the cost in Thailand averages $0.10 per kWh.

To date, nearly all investment in Cambodia’s power sector has focused on large-scale hydropower and coal-fired power plants. This past September saw the inauguration of Lower Sesan 2 Dam, a project that Prime Minister Hun Sen promises will lower the cost of energy and bring the country one step closer to connecting every village to the electrical grid by 2022.

At the same time, fisheries experts warn that Lower Sesan 2 will block fish migrations on two of the major tributaries of the Mekong River, the Sesan and Srepok rivers, causing a drastic 9.3 percent drop in fish biomass for the entire river basin.

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Cambodia’s per capita consumption of inland fish is among the highest in the world, and its people depend on fish for nearly three-quarters of their protein intake. According to one estimate, Cambodian fishers pull between 289,000 to 431,000 tons from the Mekong every year. Given this massive catch, Mekong fish are nothing less than vital to Cambodia’s food security. Any reduction of fish catch will increase the incidence of malnutrition that is already a serious problem in Cambodia, further deepening poverty.

Is it possible to provide for Cambodia’s energy needs without jeopardizing the wild capture fisheries vital to Cambodia’s economy and food security?

The good news is that Cambodia also boasts 5.8 peak sunlight hours a day, one of the best solar resources in the world.  Rapidly declining costs now place solar close to par on price with hydropower, with far fewer environmental or social impacts.

In Cambodia, large-scale dams provide power for between 8 and 11 cents per kilowatt hour (kWh). Industrial-scale solar installations can now provide electricity for 12 cents per kWh, or as low as 10 cents per kWh if 20 percent grant funding is available, and the cost is steadily dropping.

Solar farms can also be built much more quickly than large dams.  According to a recent report by the Mekong Strategic Partners entitled “Switching On: Cambodia’s Path to Sustainable Energy Security,” under the right conditions, the Cambodian government could achieve electricity self-sufficiency through the development of solar energy within 12 months. Compare this to the four years (2014-2017) that it took to build the Lower Sesan 2 Dam. In addition, research shows that hydropower projects typically experience time overruns of 1.8 years, whereas wind projects run behind schedule by less than a month, and the average time overrun of solar PV projects is negative.

Despite its cost effectiveness and time efficiency, solar development currently plays a negligible role in the Cambodia’s energy strategy, and is absent from the government’s forecast for electricity supply up to the year 2030. Instead, the country is on the verge of committing to an extensive hydropower program, mostly with the backing of Chinese financiers and construction companies.

One such project is the proposed Sambor Dam, to be located on the Mekong River’s mainstream at Sambor town, Kratie province, Cambodia. This would be one of eleven large hydropower dams on the Mekong River’s lower mainstream. If built, these dams would block the major fish migrations that are essential to the life cycle of around 70 percent of the Mekong River’s commercial fish catch. This would result in a total estimated fishery loss of 26 to 42 percent, placing at risk the livelihoods and food security of millions of people. Farmers and fishers downstream would face declining yields and incomes, putting at risk Mekong delta food exports worth $10 billion annually.

The dam wouldn’t just increase hunger and poverty; it would also cause many families to lose their homes. The Mekong River Commission’s 2010 Strategic Environmental Assessment estimates that around 20,000 residents would be evicted from their homes and land to make way for the Sambor Dam’s massive reservoir.

With its destructive and costly environmental impacts, hydropower is well on its way to becoming obsolete. The United States, long a booster of hydropower, is now leading the world in dam decommissioning, as it copes with collapsed fisheries and aging, dangerous infrastructure. Since 2010, wind and solar power capacity has grown by a total of 313,000 megawatts globally – almost four times faster than large hydropower plants. Unlike hydropower dams that can destroy ecosystems and wipe out species, solar farms provide a truly renewable source of electricity, can be built closer to where people need them, and are more resilient to climate change.

Solar farms have the additional benefit of bolstering employment. While the initial stages of business development and pre-construction require skilled personnel, once this foundation is laid, semi-skilled and unskilled labor is required for the construction, operations, and maintenance phases. Experience from India shows that solar manufacturing – from assembly, distribution, and sales, to installation and servicing – can drive local job creation in rural communities where employment opportunities are traditionally lacking.

To operationalize solar, Cambodia does have some work ahead of it. Capital will flow once policy and regulations are made clear, and the government puts in place a coherent framework for planning and investment. A coherent vision for renewable energy development and a regulatory environment to support it will greatly bolster the country’s energy security.

There are also significant opportunities for accessing support for solar power development through climate finance assistance to developing countries. At COP21, developed countries reaffirmed their previous commitment to providing $100 billion per year by 2020 to support developing countries’ efforts to move toward a low-carbon future. With this commitment, development partners are likely to increase technical assistance and make grants and concessional loans available to support technologies that reduce greenhouse gas emissions.

Cambodia needs both leadership and vision from the government to drive an energy future that is sustainable and prioritizes preservation of the country’s rich fisheries resources. Rather than continuing to support outdated mega-dam projects, the Cambodian government should prioritize the introduction of innovative renewable and decentralized electricity technologies that are now readily available and cost-competitive. By adopting national energy policies that encourage investment in solar power, Cambodia could lead the region in sustainable growth without losing the benefits that healthy rivers bring.

Sabrina Gyorvary is Mekong Program Coordinator for International Rivers.

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