Cambodia opposition promises to slash power prices, encourage solar energy

Cambodia opposition promises to slash power prices, encourage solar energy

Cambodia's opposition has pledged to overhaul the country's power sector as
part of a sweeping bid to clean up and reduce the cost of electricity in the
country, should it win power in the 2018 national elections.

Part of that would include prioritising the development of solar power in
the country, with the Cambodia National Rescue Party (CNRP) planning to
invigorate the near non-existent solar industry to produce 20 per cent of
the country's current power needs within two years.

It would allow and encourage private investors to construct solar plants
connected to the national grid, with the intention of creating a competitive
industry that would see prices drop for consumers.

Electricity prices in Cambodia are among the highest in the region and the
world. Some provinces pay up to US$0.75 per kilowatt hour, according to
national power provider Electricite du Cambodge (EDC).

In rural areas, where the national grid does not extend, most power is
redistributed by private companies, resulting in a price hike.

"The people in the provinces are the ones that suffer the most. It's
fragmented power supply. We're going to fix that. We want the prices to be
consistent across the country," CNRP's deputy director of public affairs Kem
Monovithya said.

The party's desired outcome would result in prices reduced to 360 Riel/kWh
(US$0.09) in regions covered by the national grid, a dramatic cut. At
present, the price for average households in Phnom Penh is 780 Riel/kWh,
still considerably more than power costs in the United States, for example.

The party, if in government, will consider up to a US$1 billion investment -
on the back of cheap development loans - to expand and improve the grid, add
transparency to local power purchase agreements and renegotiate private
transmission line fees.

"Expanding transmission line is an investment, we could get low interest
rates on poverty reduction schemes from donors. There's no excuse for not
doing that," Monovithya said.

"The CNRP plan will make it cheaper by taking a transparent approach with
power suppliers, change the business model for redistributions and adding
new sources of supply into the mix."

The fast roll-out of a privately funded and operated solar industry would be
a lynchpin of that proposal.

Currently, Singaporean firm Sunseap is the only company with a government
tender for a large-scale solar project. Its output will be 10 megawatts once
operations begin, expected next year.

However, investors are known to be lining up to take advantage of Cambodia's
optimal solar radiation conditions for power production.

"It can be done in two years, even conservatively speaking. That's our
commitment. One year if you really want to push it," she said.

In addition, the CNRP would also allow the installation of rooftop solar
panels for private citizen use, potentially enticing for rural farmers not
currently connected to the national grid.

But the CNRP would put an end to any new hydropower dam projects, and
potentially attempt to renegotiate contracts already in place, including for
the controversial Sambor dam planned for the main stream of the Mekong River
in Kratie, Monovithya said.

"The environment is already negatively impacted from hydro. We are not going
to do any more," she said, conceding that small-scale projects not deemed
environmentally damaging could be considered "case by case".

"Sambor dam is a no. It would likely be scrapped."

The party would also forego any target to make Cambodia energy independent.
The country is still heavily reliant on purchases from neighbouring
countries, and changing that is "not a priority". Rather, import taxes on
oil used to produce energy would be cut, as well as value-added tax
currently paid by power users.

"Consumers should not have to pay tax on energy."

"HAPPENING FAST"

Cheaper power rates are also on the government's radar as it moves onto
election footing. Heng Samrin, the CPP's honorary president, made it a focus
at the recent 40th party congress, but did not mention specific targets.

Already the government has introduced lower tariffs for households that use
less than 50 kWh per month. It is also pressing on with plans to get
electricity to more of the country, despite slashing the projected 2017
budget for the Ministry of Mines and Energy by 32.9 per cent, compared to
this year.

"Our goal is 100 per cent of villages in Cambodia have access to any kind of
electricity service by the year 2020," said Tun Lean, the under-secretary of
state for the Ministry of Mines and Energy.

"It's happening quite fast. By 2030, at least 70 per cent of households will
have access to electricity, which is on the good quality national grid."
The CPP is exploring its options around solar power but has not committed to
any formal renewable energy target and will continue to invest in coal
power.

"Right now, we are not promoting solar because it's expensive and there's no
battery storage and the voltage is not stable. We are happy that they
(Sunseap) are starting this pioneer project and later on we can go step by
step."

Similarly, the CNRP plans to continue to invest in "cleaner" coal
technology, but did not have specific details or costs of any increased
deployment to keep up with Cambodia's fast growing demand for power.

Both parties are expected to make power policy key components of their
electioneering for 2018, as well as for commune elections next year. Until
the sector is improved, there is no doubt Cambodia is losing money and
business.

The government has acknowledged, for instance, the 27 per cent transmission
loss on its grid and faced accusations of conflicts of interest and graft
inside and around the EDC. The high prices and lack of clarity have been
cited by the Economic Institute of Cambodia among others as inhibitors to
foreign investment.

"It's impeding on our growth potential. Energy price is one of the main
obstacles of growth," Monovithya said. "A lot of companies, particularly
small, private ones, they can't come in here and make a profit.

"We have missed out big time."

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Link to Original Article:
http://www.channelnewsasia.com/news/asiapacific/cambodia-opposition-promises
-to-slash-power-prices-encourage/3380920.html

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com