Cambodia RE Law/Policy

Table of Contents

Last updated Jan. 30, 2024.

Electricity Sector Overview

Generation: Electricity in Cambodia is generated by (a) independent power producers (IPPs) who have a generation license and sell electricity to suppliers or industries through a PPA, and (b) consolidated licensees—EDC (Electricite du Cambodge, a state-run utility) and mainly REEs—that generate electricity to supply consumers connected to their distribution networks.

Transmission: Electricity in Cambodia is transmitted by (a) EDC, the national transmission licensee that has the right to transmit electricity to supply any distribution network and bulk power consumers throughout Cambodia; and (b) special purpose licensees, which have the right to own, operate, and manage identified transmission facilities for delivering and selling electricity in bulk.

Distribution: Consolidated licensees and distribution licensees have the right to own distribution facilities and distribute electricity in their authorized areas.

Source: ADB: Cambodia Electricity Sector Overview

As of 2021, 4.26% of Cambodia’s electricity supply came from solar and 0% from wind. The vast majority of Cambodia’s 52.93% share of renewables comes from hydropower (46.03% in 2021). The following charts illustrate Cambodia’s electricity mix:

Source: OurWorldinData.org. Click to access interactive graphs.

References

Summary of RE Laws/Policies

The main laws and policies influencing renewable energy development in Cambodia are the Cambodia Basic Energy Plan (BEP), the 2001 Electricity Law, the 2018 Regulations on General Conditions for Connecting Solar PV Generation Sources to the Electricity Supply System of National Grid, the Power Development Master Plan of Cambodia, and the Law on Investment (LoI).1BNG Legal, Renewable Energy in the Cambodia Energy Plan (Mar 2022), https://bnglegal.com/index.php/renewable-energy-in-the-cambodia-energy-plan/.

The 2001 Electricity Law and its amendments provide the regulatory framework for electric power supply, services, and licenses. All electric power providers are required to have a license (typically a Generation License) issued by the Electricity Authority of Cambodia (EAC), a regulatory body established by the Electricity Law, which also has the authority to revoke licenses for violations of the Law. Generation Licensees have the right to own, operate, and manage generation facilities, while the EAC is responsible for approving tariff rates and charges. Producers cannot set their own rates. Licensees are required to submit annual reports to the EAC and follow the EAC’s standards and procedures, such as those regarding metering equipment.2BNG Legal, supra.

Solar power producers must be listed on the Power Development Master Plan in order to connect to the national grid. If not listed, the feasibility of connection to the grid must be examined by the Ministry of Mines and Energy (MME). The 2018 Regulations on General Conditions for Connecting Solar PV Generation Sources to the Electricity Supply System of National Grid sets out technical standards and conditions required from solar producers. The Regulations state that off-grid solar projects are not subject to the requirements, standards, and conditions, thus allowing solar producers more opportunities to distribute in off-grid areas.3BNG Legal, supra.

As of January 2024, Cambodia has signed memoranda of understanding (MoUs) with four major French companies in the energy sector to expand development cooperation between the two countries, with the aim of speeding up the energy transition in Cambodia and the broader region.4Cambodia’s French pacts boost renewable goals, Asia News Network (Jan. 23, 2024), https://asianews.network/cambodias-french-pacts-boost-renewable-goals/.

Initial Critique of RE Laws/Policies

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.5BNG Legal, supra.

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.6BNG 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 2030.7Leonie Kijewski, Cambodia Halts Hydropower Construction on Mekong River Until 2030, VOA News (Apr. 1, 2020), https://www.voanews.com/a/east-asia-pacific_cambodia-halts-hydropower-construction-mekong-river-until-203/6186756.html. 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.8BNG Legal, supra.

The BEP has stated that wind is difficult to install in Cambodia due to insufficient wind conditions.9Cambodia’s Basic Energy Plan, https://www.eria.org/uploads/media/CAMBODIA_BEP_Fullreport_1.pdf

Renewable Energy Targets

Renewable Energy Laws/Policies

General Laws/Policies

  • Cambodia’s NDCs
  • Cambodia Basic Energy Plan (2019)
  • Electricity Law of the Kingdom of Cambodia (2001)
    • PDF / Backup PDF
    • Updated Version (Amended in 2007 and 2015) / Backup PDF
    • Established Electricity Authority of Cambodia (EAC) and provides regulatory framework for electric power supply, services, and licenses.
  • Power Development Master Plan 2022-2040
  • Law on Investment 2021
    • Info / More Info / PDF
    • Provides tax incentives to green energy producers, which are able to register as Qualified Investment Projects (QIPs).
    • Includes income tax exemption from 3-9 years from the time of first earning income, a sliding scale of tax breaks on income tax after the exemption period, and exemptions on Prepayment Tax, Minimum Tax, and Export Tax during the initial period.13BNG Legal, supra.
  • Law on the adoption of the National Strategic Development Plan (NSDP) 2019-2023
  • Regulation on General Conditions for Connecting Solar PV Generation Sources to the Electricity Supply System of National Grid or to the Electrical System of a Consumer Connected to the Electricity Supply System of National Grid (2018)
    • Info / PDF / Backup PDF
    • Governs solar power producers that supply energy to the national grid and solar power producers that supply energy directly to consumers
    • The requirements, standards, and conditions are not applicable to off-grid solar projects, allowing solar power producers greater access to the market of those in need of electricity14BNG Legal, supra.

Incentives for RE Development

  • Rural Electrification Fund’s programmes
    • Info / PDF / Backup PDF
    • Includes Programme for Solar Home System (SHS), in addition to other programmes aimed at increasing electrification for poor and rural areas/households.
  • Principles for Permitting the Use of Rooftop Solar Power in Cambodia
    • Info / PDF
    • Forms the basis for new regulation for rooftop solar adoption expected to be introduced in early 2024

Related Laws/Policies

  • 2022 Electricity price stabilization
  • National Energy Efficiency Policy 2022-2030
  • Pentagonal Strategy
    • Info / Backup PDF
    • Mentions the importance of transitioning from fossil fuels to clean energy and marks an interest in civil nuclear energy.

References