Cambodia: Third coal-fired plant on order

Cambodia: Third coal-fired plant on order

A Japanese engineering firm has secured a contract to build a 150-megawatt
coal-fired power station in Preah Sihanouk province - the Kingdom's third
approved coal-based energy generation facility to date.

Toshiba Plant Systems and Services Corporation (TPSC), a wholly owned
subsidiary of Japanese electronics manufacturing giant Toshiba, will build
the turnkey power plant for Cambodian Energy II Co Ltd (CEL2), the company
said in a filing on the Tokyo Stock Exchange yesterday.

TPSC said it would use its Malaysian and Thai subsidiaries for the
engineering, equipment supply, construction work, installation, testing and
adjustment of the facility before handing operations over to CEL2. It
estimated that construction would be completed by late 2019.

Registered in August 2016, CEL2 shares the same board of directors as
Cambodian Energy Co Ltd (CEL), a subsidiary of Malaysia's Leader Universal
Holdings that operates an existing 100-megawatt coal-fired power plant in
Sihanoukville.

TPSC said in the filing that it was selected by CEL2 on the basis of its
"extensive experience and capabilities in power plant construction in
international markets, its high level technologies, and its ability to meet
strict Japanese criteria for plant reliability and performance".

Naoaki Kamoshida, counsellor at the Embassy of Japan, said this was the
first time that a Japanese company had won a bid for a thermal power plant
in the Kingdom.

"Given the expanding demand of energy, increasing electricity supply with a
balanced energy mix is important for the country's economy," he said. "We
hope this project will help to provide Cambodian people with stable and low
cost electricity."

TPSC declined to comment yesterday on the value of contract, citing that the
company needed more time to respond, while CEL could not be reached for
comment.

Leader Universal Holdings entered Cambodia's energy market in 2011 with its
$195 million CEL coal-fired plant in the Stung Hav district of Preah
Sihanouk province that started producing electricity in 2014.

A coal-fired power plant operated by CIIDG Erdos Hongjun Electric Power Co -
a joint venture between Cambodia International Investment Development Group
(and China-based Erdos Hongjun Electric Power Co - came online later that
year. Currently operating with 270 megawatts installed capacity, the plant
is being developed into a 700-megawatt facility at a cost of $383 million.

Tun Lean, a spokesman of the Ministry of Mines and Energy, confirmed
yesterday that the 150-megawatt CEL2 power station would be located next to
the existing two coal-fired plants, though the cost of the project was still
to be determined.

TPSC's filing follows an announcement by Council of Ministers spokesman Phay
Siphan early last week that stated CEL had beat out CIIDG Erdos Hongjun
Electric Power for the concession to build a new coal-fired plant in
Sihanoukville. Additionally, The Post reported last September that Royal
Group, Cambodia's largest conglomerate, was also vying for approval of a
400- to 500-megawatt coal-fired plant in same area.

Representatives of Royal Group could not be reached for comment on the
project.

Han Phoumin, an energy economist for the Economic Research Institute for
ASEAN and East Asia, said that while the push for coal power was in line
with the government's energy development policy, and was largely the right
decision to seek energy independence, the country needed to put more
consideration into environmental impacts.

"As Cambodia is heading to use more coal, it is very important that the
Cambodian government strengthens environmental regulation for coal-fired
power plants," he said.

He added that while a 150-megawatt unit was cost-effective in the
short-term, anything below 500 megawatts using the latest technology would
be grossly inefficient and environmentally hazardous.

"If the power plant is built on a small unit, with a capacity less than
500-megawatts, it is very hard to achieve high-efficient technology and it
cannot introduce clean coal technology," he said. "We strongly recommend
that the Cambodian government puts in high requirements for investors to
deploy ultra-super critical technology."

He added that the government had to balance energy needs and development
with the tourism potential of its coastal beaches.

"Since the power plants are placed in a tourist area, the government should
have a forward-looking perspective in terms of air pollution," he said.

"If there is pollution, tourists and residents will be surely affected and
it will impact on local economy in the future."

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com