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Cambodia’s Path to Sustainable Energy: Market Analysis 2024

Cambodia Energy Report: Insights and Future Prospects

The Cambodia energy market has seen significant developments and transformations over the past few years. With a focus on renewable energy and sustainable practices, Cambodia aims to address its national energy challenges while capitalizing on emerging opportunities. This comprehensive report delves into the country’s current energy landscape, highlighting key economic indicators, supply and demand factors, oil and gas pricing trends, and major industry issues and developments. 

For stakeholders seeking to navigate this dynamic landscape, engaging with Cambodia Energy Consulting services can provide valuable insights and strategic guidance.

Key Highlights

  1. GHG Emission Reduction Targets

Cambodia has set an ambitious goal to reduce its greenhouse gas (GHG) emissions by 42% by 2030 compared to a business-as-usual (BaU) scenario. The country also aspires to achieve carbon neutrality by 2050, demonstrating its commitment to environmental sustainability.

  1. Dominance of Independent Power Producers (IPPs)

Over 80% of Cambodia’s power capacity is held by independent power producers (IPPs). This highlights the significant role of private sector investment in the country’s energy infrastructure.

  1. Foreign Influence in the Oil Sector

Foreign companies dominate both the upstream and downstream segments of Cambodia’s oil industry, influencing the dynamics and development of this crucial sector.

  1. Rapid Growth in Power Generation

Since 2010, Cambodia’s power generation capacity has increased tenfold. This growth underscores the country’s efforts to enhance its energy infrastructure and meet rising demand.

  1. Coal Imports and Oil Production

Significant coal imports began in 2013 with the opening of Cambodia’s first coal plant. However, crude oil production has faced challenges, ceasing operations in 2021 after only eight months.

  1. Energy Prices and Government Subsidies

After three years of continuous rises, oil prices decreased in 2023. The government has implemented substantial subsidies to manage electricity prices, which remain among the highest in the ASEAN region.

  1. Primary Energy Sources

Biomass and oil are the main energy sources in Cambodia, each accounting for around 40% of total energy consumption. Approximately 90% of coal consumption is dedicated to power generation.

  1. Investment in Electricity Transmission

The Cambodian government plans to invest US$1.8 billion by 2040 to enhance the country’s electricity transmission network. This is part of a broader effort to improve energy distribution and reliability.

  1. Transition to Renewable Energy

The new Power Development Plan includes the construction of an 800 MW gas plant, following the decision to halt new coal plant projects. By 2040, 63% of the power capacity mix is expected to come from renewable sources.

Institutional and Policy Framework

The Ministry of Mines and Energy (MME), through the General Department of Energy (GDE), oversees Cambodia’s energy policy. This institutional framework is crucial for implementing strategies that support the country’s energy goals.

Energy Supply and Prices

Cambodia’s oil production was short-lived, ending in August 2021 due to the operating company’s bankruptcy. Between 2020 and 2022, oil prices surged, reflecting international trends. However, in 2023, prices saw a decline, with diesel dropping by 16% to US$1.03/l and gasoline by 2% to US$1.02/l.

Energy Consumption Trends

In 2022, per capita energy consumption in Cambodia was 0.53 tons of oil equivalent (toe), including about 800 kWh of electricity per person, which is half the ASEAN average. Total energy consumption growth has slowed since 2019, averaging 1.4% per year, after a rapid increase of around 7% per year from 2010 to 2019. In 2022, total consumption reached nearly 9 million tons of oil equivalent (Mtoe).

Future Prospects and Challenges

The latest Power Development Master Plan (2022-2040) projects a 7.5% annual growth in peak demand, reaching 8.9 GW in the medium scenario. The plan includes significant energy savings compared to a BaU projection and anticipates that 63% of the power capacity mix will be sourced from renewables by 2040. This shift towards sustainable energy sources is crucial for meeting Cambodia’s future energy needs.

In conclusion, Cambodia’s energy sector is undergoing a transformative phase, marked by substantial investments, policy shifts, and a growing emphasis on sustainability. For stakeholders and investors, Cambodia Energy Consulting services offer valuable insights and strategic guidance to navigate this dynamic landscape. As the country progresses towards its energy goals, leveraging the expertise of Cambodia Energy Consulting will be essential in overcoming challenges and seizing market opportunities.