Cambodia needs solar to drive down electricity prices

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The United Nations Development Program (UNDP) has issued a request for proposal to select consultancy companies for the development of a “full economical appraisal of the potentials of solar PV energy in Cambodia”.

The UNDP stresses in the document that the costs of PV have fallen 83% in ten years, and a further 70% drop is expected by 2050, adding: “The technical feasibility of solar power is further strengthened by the complementary fall in the price of battery storage, which has progressively become a solution for the variability issues inherent to modern forms of renewable energies.”

Cambodia’s power demand is met by hydro and coal, which account for 40% and 36% of the electricity supply, respectively. Another 19% is met from electricity imports. “Clearly these sources have major environmental implications and hidden costs – nationally, regionally, and globally,” the UNDP says.

Cambodia’s electricity prices are among the highest in southeast Asia, and the government seems not to have understood its grid expansion plans will worsen the situation, according to the UN department.

“The government is on the verge of committing to an expansion of its hydropower program and coal plants, and this will limit the scope for solar development, and potentially lead to additional social and environmental consequences,” the document warns.

Uncertainty deters investors

The UNDP said in April 2017, Cambodian policymakers were “reluctant to promote solar, vis-á-vis coal-based power generation and hydropower”.

The UNDP finds Phnom Penh has not made clear its plans for expansion of the grid, deterring solar investors, and that the legal framework is inadequate to “regulate safety standards of solar PV products, and [incentivize] excess solar electricity generation”.

Cambodia issued new rules for the integration of solar in January. They established a framework for the installation of rooftop and large-scale systems, but failed to provide financial incentives.

Meanwhile, the country’s first solar park – a 10 MW facility built by Singapore’s Sunseap – has been connected.

Almost half of Cambodia’s population have no access to power.