Fledgling Cambodian solar industry sees glimpse of light
By Jack Board
Cambodia is trailing its neighbours in encouraging alternative power sources to reduce the strain on its environment. But with the government’s cautious approval, the solar industry could be set for a timely expansion.
PHNOM PENH: The Cambodian government is slowly starting to accept and explore opportunities for solar energy in the country, which has a growing need for electricity to sustain its development.
But it seems unlikely that this form of renewable energy will substitute coal power plants and large-scale hydropower projects, which come with potentially damaging environmental effects.
Cambodia has been identified as a hotspot – literally – when it comes to solar radiation levels, but even with international investors lining up to soak up the sun, the government is taking it "step by step".
In August, Singaporean firm Sunseap won the first government tender to build a large-scale solar project in the country. Its output of 10 megawatts remains modest compared to the mega hydropower planned or underway in the country, but it is progress, according to the firm's director Frank Phuan.
"We are seeing clear signs from the Cambodian government on willingness to expand the industry," he said. "I believe that the rate of solar proliferation in the country will pick up."
If the sector is allowed to expand, there would be no shortage of interested backers, according to John McGinley of Mekong Strategic Partners, a group keenly eyeing opportunities in renewables.
"Geographically, it's spot on. There's a need, it's cheap and it makes sense on so many levels," he said. "We just need to get this industry moving. But we're definitely hearing the right sounds from the government."
About six million people are estimated to live without access to regular grid power. Outages are common in rural areas, including regional hubs like Stung Treng, which is close to the development of major hydropower dam project Lower Sesan 2.
The government has said it understands the need to electrify the country and has set bold targets to power up every household in some way by 2020. Largely, hydropower has become the solution to Cambodia's power shortage issue, with developers, mostly from China, filling a funding and expertise void and taking charge of building dams across the country’s rivers.
Most projects have long-term contracts and "take or pay" agreements, which means that all electricity generated not used in the grid comes at a cost to the government. While there are vast profits to be made during the construction process, including by clearing swathes of forest, the heavy investment poses financial
For that reason, the government remains cautious when it comes to moving ahead with solar energy, a technology it has long appeared sceptical of.
Cambodia's neighbours, however, have largely taken the plunge. McGinley explained the speed and flexibility of solar energy, which many countries in the region, notably Thailand and Vietnam, have taken advantage of.
"Compare what it would take to produce the same amount of power with hydro versus solar. A hydropower dam that could take seven years to build, you could build a similar capacity solar plant in six to 12 months. It's really rapid to roll out," he said.
"We could take 200 hectares of shrub, bush land and build the same amount of electricity. The cost of building transmission lines is really high, whereas with solar you can build it where you need it."
It is a position largely supported by environment groups, including the World Wildlife Fund (WWF), which produced a major report earlier this year outlining the possibilities for renewable energy. It aimed to encourage the government to transition from old technologies and identified solar as the solution.
Concerns about the viability of dozens of large Mekong dam projects upriver in Laos and China interrupting the natural flow of the river and more intense dry seasons, as was experienced this year, have added to the calls for change.
And there could be bigger things at stake.
"NOT JUST A DAM"
Cambodia currently has eight operational hydropower dams with a combined maximum capacity of 1,049 megawatts of power, according to Open Development Cambodia (ODC).
However, examining the pure number of dam projects or potential sites under consideration highlights the possible extent of Cambodia’s reliance on hydropower. The data compiled by ODC lists a total of 73, including those already being constructed or already completed.
While that would be unrealistic - politically, environmentally and financially - the blueprint is indicative for a country that still currently has zero formal renewable energy targets.
"Now Cambodia is in a transitional period. Hydropower actually is a very old technology," said Oudom Ham, a leading environmental campaigner from EarthRights International.
"If we do not look properly into the cost and benefits of hydropower dams, it will impact many things. It will cause migration, it will cause social unrest and people will keep blaming the government about human rights. It’s not just a dam."
Among those projects being seriously considered is the monstrous Sambor dam, with a capacity of more than 1,000 megawatts. It poses major environmental concerns and is slated to be built across the main Mekong River channel in Kratie, although not likely for at least a decade.
Many doubts surround the viability of Sambor; a US team is currently leading a study on the government’s behalf. But there is no escaping dam projects remaining firmly entrenched in Cambodia’s future. And, realistically, there is little choice in the matter.
"Developed countries want developing countries to do solar," said Tun Lean, Under Secretary of State at the Ministry of Mines and Energy. "We need cheap electricity to develop the country. Industry development requires cheap power.
"If you request developing countries to use solar energy the same as Germany the tariff is very expensive. How to do it?"
"Our master plan says that even if we promote solar, we need another source."
McGinley agreed. "Solar can’t be the answer on its own, there will be still be a need for hydro or coal to some extent,” he said. “But it's about providing a better mix."
"The issue with solar is the technology, batteries that can store solar. But that's not ready yet in Cambodia and it's not currently economical. The idea is that in the dry season when the hydros are running with really low productivity, they actually complement each other really well."
There is little citizen pressure on the government to implement greener technologies, even on a small scale.
Currently, private solar installations such as on house rooftops are technically illegal in Cambodia. The national power body – Electricite du Cambodge – blocks individuals or private enterprises from generating their own electricity, which would be fed into the grid should there be any excess. It still remains wary about private citizens reducing their power bills via feed-in tariffs.
While awareness and shifting attitudes could help encourage the government to be more open to solar energy, what is more important is an urgent upgrade to the national grid, according to Phuan.
"There is also a need to have more skilled labour with the necessary technical skills to construct and develop these projects. Grid expansion and upscaling are also crucial in making this vision a reality," he said.
For now, that reality is still on a shaky foundation. One way or another, it is clear that Cambodia does not intend to be left in the dark.
Follow Jack Board on Twitter @JackBoardCNA