Last updated Jul. 26, 2024.
I. Introduction
Cambodia witnessed a dramatic surge in renewable energy in its electricity generation mix in the past decade. Hydropower was the country’s most abundant electricity source occupying 45% share in the electricity generation mix. Non-hydro generated renewables such as solar and wind are lacking compared to electricity generated from hydro and fossils.
According to Cambodia’s Basic Energy Plan (BEPC), since 2010, the annual average electricity demand has grown by 20%.1BEPC. To ensure that the growing electricity demand of the country is met, an acceleration of RES development must be prioritized. Tapping into the potential of non-hydro renewable energy sources such as solar and wind could aid in meeting the projected demand.
While Cambodia has a lot of non-hydro renewable energy potential, barriers that deter the country from realizing its RE potential are also present and prevalent. In the BEPC, higher upfront cost and no clear RE target are some of the identified barriers.
II. Current Status of Renewable Energy
Installed capacity of major renewable sources (2022):
- Hydro: 1.6 GW
- Solar: .48 GW
Electricity generation of major renewable sources (2022):
- Hydro: 4 TWh
- Solar: .39 TWh
In 2022, major renewable energy sources generated a total of 4.39 TWh of electricity. This represents 49.80% of the country’s total demand of 12.38 TWh. To fully detach itself from fossil fuels in its power generation mix, Cambodia needs to further accelerate the development of renewable energy sources (RES).
With an installed capacity of 1.6 GW in 2022, hydropower managed to produce the highest electricity among other renewable and non-renewable electricity sources. In 2022, hydropower was able to generate 4 Terawatt hours of electricity, dwarfing solar and bioenergy by significant levels.2Ember.
In 2022, Cambodia had an installed capacity of 1.8 GW of renewable energy–mainly sourced from hydropower, solar, and biomass.
Hydropower is the largest source of electricity in Cambodia. According to the Ministry of Mines and Energy and the Cambodian National Mekong Committee (CNMC), hydropower could potentially generate 10 GW of electricity.3BEPC, supra. In the same report, it is stated that only 13% of this 10 GW of potential was tapped in 2019. As of 2022, the installed capacity of hydropower is at 1.6 GW. In the country’s Basic Energy Plan, hydropower’s share in the electricity mix will increase to 55%.4BEPC, supra. However, it is crucial to flag the ecological and social risks posed by mega-hydro as the country moves forward with hydropower expansion, and levy necessary policies that uphold welfare of communities first.5Our World.
With only .48 GW of installed capacity in 2022, Solar energy is the second most developed RES in Cambodia, ranking behind hydropower. While not the biggest player in RES in the country, solar energy shines in its affordability compared to fossil fuel alternatives. Solar power is significantly cheaper to produce than electricity from coal. On average, solar power costs about $0.03 per kilowatt, while coal-generated electricity costs around $7.70 per kilowatt.6Energy Tracker Asia. With Hydropower’s volatility, diversified electricity sources, such as solar energy can aid in frequent instances where extreme heat affects water supply.7Reuters.
III. Renewable Energy Potential
Hydropower is currently Cambodia’s biggest source of renewable electricity, contributing 45% to the national electricity generation mix in 2022. Solar and wind power, on the other hand, contribute a much smaller share (4.4%). An Asian Development Bank (ADB) study suggests a much higher potential for Cambodia’s renewable energy sector, estimating a capacity of 10 GW for solar and 5 GW for offshore wind.8Asian Insiders.
In recent years, the country has seen an increase in electricity demand. However, the current supply cannot keep pace, leading to power outages in many parts of the country.9AEDS. By harnessing its solar and wind potential, Cambodia could diversify its RE portfolio and increase supply to meet the growing demand.
IV. Summary of Renewables Policies and Incentives
| TYPE OF POLICY | CAMBODIA | |
| REGULATORY POLICIES | Renewable energy in INDC or NDC | ✔ |
| Renewable energy targets | ||
| Feed-in tariff/auctions/premium payment | ✔ | |
| Net-metering/billing/direct consumption-supply | ||
| Biofuel blend obligation/mandate/target | ||
| Electric utility quota obligation/RPS | ||
| Tradable REC | ||
| Renewable heat obligation/mandate | ||
| FISCAL INCENTIVES AND PUBLIC FINANCING | Tax incentives | ✔ |
| Public investment/loans/grants/subsidies/rebates | ||
| Reductions in sales, CO2, VAT or taxes | ||
| Tendering | ||
| Investment or production tax credits | ||
| Energy production payment | ||
View comprehensive list of Renewables policies here.
V. Summary of Identified Challenges
Cambodia’s energy targets (with the exception of hydropower) in its BEP are low in comparison to other ASEAN countries, due to Cambodia’s interest in guaranteeing energy supply in the face of power shortages.10BNG Legal.
Regulations and incentives for renewable energy are currently lacking in some areas, but the Law on Investment (LoI) has improved the conditions for RE and the Environmental Code, once promulgated, is expected to also enhance the regulatory framework. Additionally, the 2018 Regulations for connecting solar PV to the national grid are intended to encourage solar producer investment in Cambodia, even though there is a lack of concrete incentives.11BNG Legal, supra.
Although Cambodia has set a high target for hydropower in its BEP, hydropower remains controversial due to its environmental impact. In part due to such impacts, the MME has announced a halt in hydropower development on the main Mekong river until 2030.12VOA news. In addition to requirements in the Electricity Law, hydropower projects are also subject to an environmental impact assessment and must obtain a water use license from the Ministry of Water Resources Management.13BNG Legal, supra.
The BEP has stated that wind is difficult to install in Cambodia due to insufficient wind conditions.14BEPC, supra.
- Low RE Targets
- Regulatory and incentive gaps
- Hydropower development limitations
- Unfavorable wind conditions
View comprehensive list of identified challenges here.
VI. Future Outlook
- In its Nationally Determined Contributions (NDC), Cambodia has set a target of 25% of renewable energy (solar, wind, hydro, bio) share in its energy mix by 2030.15Cambodia NDC.
- Cambodia plans to increase its electricity sourced from renewable energy from roughly 50% in 2022 to 65% by 2030.16BEPC, supra.
- A commitment to achieve net-zero by 2050 was declared by the government in Cambodia’s Long Term Strategy for Carbon-Neutrality.
- Solar and wind hold relatively high potential. Barriers such as lack of incentives and enabling policies must be addressed to realize the immense potential.
VII. Conclusion
- Cambodia relies heavily on hydropower in its electricity mix
- Hydropower is also volatile–it experiences variability in the face of extreme weather events such as drought.
- Cambodia holds significant potential in other non-hydro renewable energy such as solar and wind power.
- Diversification is crucial in addressing significant growth in electricity demands.
- Challenges such as low RE targets by the government, lack of incentives in developing RES, hydropower prioritization despite potential harms, and unfavorable wind conditions.
- Its 2030 RE targets do not address the lack of diversity in its RE share.