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Cambodia's electricity sector gaining
steam
By Jeff Moore
ALEXANDRIA, Virginia - Each year, modernized
nations search for more effective ways to manage their
energy resources. But for developing countries such as
Cambodia, there is frequently little energy to manage.
In fact, Cambodia would be lucky to have an Enron-type
scandal to complain about.
Nevertheless, in
order to stabilize and attract foreign investment,
Cambodia needs an uninterrupted flow of energy;
something the government is trying to achieve. The
master energy plan Phnom Penh developed in 1999 is
ambitious - perhaps overly so. But foreign energy
companies such as Jupiter with small and realistic
projects are experiencing success in energizing
Cambodia, demonstrating the old adage: you have to learn
to walk before you learn to run.
Cambodia has
had an ineffective energy infrastructure for decades,
mostly because it never had the opportunity to develop a
modern one. Since the 1960s, the country experienced
three decades of bitter war, and it suffered under one
of the most psychotic, murderous regimes in history, the
Khmer Rouge. Even in the 1990s, Cambodia endured a
lengthy low-intensity conflict, which ended in July 1997
with the ouster of co-prime minister Prince Norodom
Ranariddh. Despite the legalities of that episode, the
country has since achieved some stability under Prime
Minister Hun Sen, although corruption, crime and a
growing narcotics trade are keeping things unbalanced.
The country's energy generation and distribution
system is likewise unbalanced. There is no national
electricity grid. Public-sector energy production is
about 97 megawatts a year. About 92 percent comes from
diesel-powered generators, and the rest comes from old
hydroelectric facilities. The overall total is quite
low. In contrast, for example, underdeveloped Myanmar
produces 1,000MW yearly.
Phnom Penh uses about
85 percent of national electricity production, leaving
the rest of the country with just the remaining 15
percent. This is barely enough to satisfy the capital's
demand, and it is not enough to satisfy the rest of the
country's demand. As a result, roving blackouts are
common. In attempts to solve the blackout problem, some
businesses rely on private generators, called "gensets",
that combined create perhaps 70MW a year. There are
upwards of 25,000 in country, and many businesses depend
on their power to make their operations run. But such
arrangements have proved only slightly effective.
Gensets add cumbersome complications to the
business cycle. First, businesses must assess their
power needs and then locate, buy, and import a genset
that produces between 500 and 1,500 kilowatts (kW), an
endeavor much more sophisticated than, say, buying a
company sport-utility vehicle. Second, businesses must
then locate a source for high-speed diesel (HSD), the
petrol that fuels gensets, and then purchase it in large
volume at about US$370 per tonne. Gensets of 500kW and
higher require HSD storage in tanks that can hold 10-15
days of fuel, another costly and dangerous industrial
endeavor that requires permits. Third, gensets need
maintenance, parts, and generous amounts of lubricating
oil. Fourth, even with tank storage, many gensets with
modern automatic transfers and starters still experience
a 30-second delay, which results in a power outage.
And this is the crux of the problem: power
outages. It goes far beyond your air conditioner going
out at the Hawaii Hotel in Phnom Penh at the hottest and
most inconvenient time of the day. Computer-run
industries, such as chemical-processing plants, cannot
afford to be thrown off line even once in a production
day. The same holds true for law offices and other
services. Time wasted bringing industry and offices back
online severely impedes business operations. The loss of
information does also. On top of all this, according to
the Ta Prohm Consultants, Cambodia has the highest
commercial and industrial electricity tariffs in
Southeast Asia - 13-17 cents per kilowatt-hour. The
next-highest rates in the region are less than half
that. Such problems discourage foreign investment, which
is unfortunate, because foreign investment is one of the
key solutions to solving Cambodia's woes.
But
the government knows this and announced a comprehensive
energy plan on October 27, 1999, at the Third Meeting of
the Express Group on Power, Interconnection, and Trade.
The Cambodian Ministry of Industry, Mines, and Energy
(CMIME) and the Asian Development Bank (ADB) jointly
hosted the event in Phnom Penh. During the meeting,
CMIME director H E Suy Sem stated that Cambodia's energy
plan consisted of six broad strategies:
1.
Reduce reliance on imported oil.
2. Reduce reliance
on the transport of oil to Phnom Penh.
3. Encourage
low-cost development of provincial load centers.
4.
Purchase electricity from Thailand, Laos and Vietnam,
with an emphasis on buying more from the lowest-cost
supplier.
5. Ensure affordable and free-flowing
electricity.
6. Export energy.
Within this,
the government plans to build several large thermal
power plants, plus a few hydroelectric plants, and then
connect them all through a national electricity grid.
Southeast Asian energy experts estimate that the total
cost in constructing these facilities may tally $1.3
billion.
Where the money will come from is
anybody's guess - maybe from international donors and
corporate sources. In February 2002, Cambodian Foreign
Minister Hor Namhong requested that the ADB fund
regional hydroelectric projects via its recently
established Mekong River Basin Authority. Nevertheless,
Cambodia has already begun to implement its national
energy plan.
Regarding energy purchases from it
neighbors, Cambodia is currently buying electricity for
Poipet town from Anco, an international engineering and
energy company that has a transformer just across the
border in Sa Kaeo, Thailand. The project cost $3
million, and a Cambodian People's Party newspaper claims
that the cost to consumers is less than a third of what
they were paying Cambodian providers. Anco also has
plans to supply Siem Reap and Battambang in projects
that cost upward of $13 million. Thai company EGCO
announced in 2001 that it would also bid on selling
electricity to these same Cambodian towns beginning in
2003, signifying healthy competition. According to Dr
Gumpananart Bumroonggit, senior vice president of energy
business for EGCO, this project is currently in
development. Early last year, National Thai Electricity
company EGAT finalized a contract to supply 30MW of
electricity to western Cambodia. Cambodia is slated to
help construct the transmission lines for the project,
but a completion date has not been publicized.
Similarly, Cambodia signed agreements in 1999
and 2000 to buy electricity from Vietnam, a five-year,
$20 million venture that was supposed to begin in 2001
with partial funding from the World Bank. To supply the
energy, Vietnam was to build a series of transformers
and power lines the stretched from Can Tho in the Mekong
Delta west into Takeo, Cambodia. However, the project
has yet to be completed.
There are a number of
proposed power plants in Cambodia that cost in the
hundreds of millions. They include 320MW and 180MW
plants by Siemens AG, a 12MW plant by Chinese company
CITEC, a 180MW project by Japanese company JICA, and a
60MW plant by the US company Beacon Hill.
All of
these projects are well and good, and the electricity
purchases from Thailand are certainly in step with Phnom
Penh's overall energy strategy. However, none is
supplying enough energy throughout Cambodia at an
effective rate, and none of the power plants mentioned
has been built.
Jupiter Power, however, has the
right idea, at least for the near term, and probably for
the intermediate term. A joint venture between Maxim
Power corporation and Caterpillar Power Ventures
International, Jupiter has four power facilities that
supply Cambodia with 22MW of its 97MW public capacity -
all at less than half the cost of some of the more
expensive power plant proposals. That is substantial.
Moreover, Jupiter helps power not only Phnom Penh, but
other cities as well. It has a four-megawatt plant in
Battambang, a one-megawatt plant in Pursat, and a 750kW
plant in Kampong Chhnang. Although these facilities are
small compared with other proposed projects, they were
easy to install and they work now, instead of maybe two
to five years from now, and Cambodia needs energy
immediately. Jupiter began installation of these plants
in 2000.
At the heart of Jupiter's projects is
the 3516DH diesel engine. While it is a generator, it is
a powerful and effective one, and Jupiter combines
several together at one site and links them via a
sophisticated computer system to provide continuous
energy flow to those who need it. The Phnom Penh
facility combines 11 engines. The other modules are
smaller, but are capable of being expanded. Complete
service packages accompany each facility.
In
Battambang, Jupiter has helped provide energy to part of
the city's 350,000 people, its textile plants, its rice
mills, and its import terminals for goods from Thailand.
Likewise, it has provided energy to Pursat's agriculture
and mining industries, a bottled-water plant, an ice
plant, and a radio station. Kampong's rice-processing
industry has also reaped the benefits of Jupiter's power
production, but perhaps the most significant gain has
been to the large demining training center there. In
Phnom Penh, the power does not go out on a regular,
daily basis anymore. One business expat in the capital
reported that since summer 2001, the power has gone out
occasionally, but never longer than five minutes. Such
improvements to the quality of life and business in
Cambodia are small, but represent a measure of stability
and revival in a war-torn country.
What about
the future? Will Cambodia fulfill its six-pronged energy
strategy? That remains to be seen. Much of Cambodia
still has no electricity, and many towns, save for the
capital, still experience regular blackouts.
Additionally, the country's power needs are expected to
grow to 746MW by 2016. Big power plants would be nice,
but one has yet to be built.
So for the near
term, and probably the intermediate term, buying
electricity from its neighbors such as Thailand, and
relying on realistic power projects such as Jupiter's,
appear to be the most feasible way of getting Cambodia's
infrastructure and economy back on its feet. If its
politicians continue to help develop such projects, then
Cambodia has made a good start.
Jeff
Moore is an employee of Science Applications
International Corp, a consultancy with headquarters in
San Diego, California, and MacLean, Virginia. He has
researched and written more than 15 country profiles and
therefore studied infrastructures of countries in
Southeast Asia, Eastern Europe, Africa, and Latin
America. He lived in Vietnam in the late 1990s and has
spent time in Cambodia.
(©2003 Asia Times
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