CEW22: Investment potential in Cambodia’s clean energy transition, better farming technology and electric vehicle infrastructure

Tom Starkey

Day three, four and six of Cambodia’s Clean Energy Week 2022 has brought together both the public and private sector to discuss investment opportunities of clean energy transition, implementing better agricultural technology as well as the development of Cambodia’s nascent Electric Vehicle sector.

To read more about Days 1 and 2 of Clean Energy Week 2022 click here.

Day three of Clean Energy Week Cambodia 2022 (CEW22) kicked off with three student workshops, namely the Alternatives of Clean Energy for Cambodia at the Institute of Technology Cambodia (ITC), the Importance of Clean Energy for Economic Development at AmCam exchange and a Clean Energy Technologies for Agriculture and Fisheries in Cambodia which was hosted via an online Zoom webinar. 

The first of three student workshops, which was led by the Thermal Laboratory of ITC – ­in collaboration with EnergyLab – was designed especially for engineering students and energy enthusiasts.

The workshop covered several topics, including an introduction to Cambodia’s current energy context, energy efficiency, energy audit, solar PV, waste heat recovery, and biomass.

Importance of clean energy for Cambodia’s economic development

The second student workshop of the day, held at AmCam, saw sector experts deliver talks on the Importance of Clean Energy for Economic Development concerning Sustainable Development Goal #7:

· Sam Sar (Impact SME Project Manager at Oxfam)

· Chan Oussa Suong (Energy Engineer at Sevea Consulting)

· Dr. Kenneth Paul Charman (Professor at CamEd)

Sam Sar said electricity is extremely important in our daily life and therefore access to electricity lifts people out of poverty and accelerates socio-economic progress. In 2000, less than 7 percent of the country’s rural areas, where more than 75 percent of the population lives, had access to electricity. By 2020, 97 percent have access.

“Now we need to support this electrification by offering reliable energy solutions at affordable prices. Clean energy is the solution to this problem by providing cheaper energy, reducing the costs that come with climate change impact, and increasing Cambodia’s energy independence,” Sam Sar said.

“We cannot keep relying on buying fossil fuels from other countries and we should take advantage of funding and support for clean energy innovation,” she added. 

Chan Oussa Suong said he is pleased, as a Cambodian, to promote clean energy use given the potential it offers the Kingdom.

“In Cambodia, not everyone knows what clean energy is or the advantages it could offer them as consumers. By being involved in events like this, we aim to get more people to understand its potential,” Chan Oussa Suong said.

“The switch to clean energy will not only save people money but also saves the environment and will improve the sustainability of our power supply. The people of Cambodia are big consumers of energy, so by helping them understand the opportunity that clean energy presents and hope people can find their voice to demand clean energy,” he added.

Finishing talks at the second workshop, Professor Charman said that the key to moving on from coal is learning from the mistakes of fossil fuel reliance.

“Coal is dangerous, wasteful, limited, and uneconomical in today’s world. We have to make progress and progress today means moving on from fossil fuels that have destroyed our environment. But, the question is, can wind and solar renewable energy (RE) be sustainable?” he said.

“A few years ago, RE technologies were not delivering the power output needed compared to the cost. Now, clean energy has developed as an economically preferable energy solution, which will also mitigate the effects of climate change that are being caused largely by fossil fuels. Clean energy is also providing new industries, new skills, new stands, and ultimately further economic growth, which evidences renewable energy as the way of progress,” he added.

The last student workshop of the day was the Clean Energy Technologies for Agriculture and Fisheries in Cambodia.

The workshop was designed to introduce participants, specifically, students majoring in agriculture and fishery, to existing technologies in the Clean Energy sector and raise awareness of the importance of clean energy technologies which are available in Cambodia.

After the series of student workshops, day three of Clean Energy Week 2022 (CEW22) was followed by the Sustainable Startup for a Green Future discussion, hosted by the Cambodia-Japan Cooperation Center (CJCC).

To read more about how Cambodia is making strides on the long road to low-carbon economic growth click here.

The event focused on raising awareness about sustainability through the integration of sustainable best practices in new businesses. The talks covered a range of topics surrounding innovative new technology spanning clean energy, recycling, and waste management, that exist in Cambodia. It also highlighted success stories that different start-ups were able to produce through practical innovation.

The talks included presentations from Chhouden Chhim Founder of Green Farmers Community (GFC) and Vorn Chanraksmey from EGE Cambodia.

Public and private sector involvement in developing Kingdom’s EV sector

Day five of Clean Energy Week 2022 (CEW22) brought together a broad selection of leading public and private sector actors to discuss key topics in the Electric Vehicle (EV) sector, including a focus on the forthcoming Ministry of Public Works and Transports (MPWT) charging infrastructure roadmap.

Opening proceedings, Kong Sophal, General Department of Land Transport at the MPWT said the charging infrastructure roadmap has uncovered some key specifics from the Cambodian context so far. 

“We have found that there is a prevalence of two and three-wheelers, in line with the global trend, but in Cambodia, there is a high reliance on second-hand vehicles, the high import tax on vehicles, and low urbanization rate which doesn’t lend themselves currently to the EV market,” Kong Sophal said.

“Other key challenges are the technical gap, the standardization gap, the regulatory gap, and the awareness and skillset gap. Therefore, the next step for us will be coordination and support from the MPWT, along with a regulatory and policy framework which supports private investments, grid integration and capacity building, and awareness raising,” he added.

In addition, key recommended actions include addressing the energy shift and ensuring infrastructure is upgraded and streamlined while building new skillsets, providing guidelines, and ensuring safe operations.

Standardization and regulation are key for the EV sector

Dr. Butchaiah Gadde, Technical Advisor on Energy from UNDP Cambodia said for the Kingdom to adopt EV, standardization and regulation are key.

“EV accounted for 42% of the global market share in 2021, with 8.2% being passenger cars, 44% being buses and only 1% being vans and trucks. This market is growing exponentially, driven by the fact the cost of running an EV is around half the cost of its conventional counterpart,” Dr. Butchaiah Gadde said.

“If 100% of cars in Cambodia were EV, 60,000 charging points would be needed, compared with only around 3,000 licensed gas stations, so there needs to be significant infrastructure development to support the adoption of EV,” he added

Moving forward, the panel hoped that the need for charging infrastructure in Cambodia will grow in line with regional projections to allow for EV market growth between now and 2050.

To read more about Cambodia’s EV products click here.

“We foresee over 10 million two-wheel EV vehicles in Cambodia by 2050 and over 1 million cars. Reaching this milestone will take involvement from all EV sector key players, from regulators and manufacturers to providers, charging station site owners, and so on,” Dr. Butchaiah Gadde said.

Following opening remarks was a panel discussion moderated by Country Director of EnergyLab, Natharoun Ngo Son and included private sector experts: 

• Gagnon Jean Pierre (Deputy Chief Executive Officer from Sathopana Bank)

• Vuthy Keo (General Manager of Oyika)

• Morten Kvammen (EV and investment specialist at WB consultant)

• Olsen Kjeld (Director at Car4U)

Talking about the challenges the EV sector faces, Olsen Kjeld said some have been overcome but some still need to be addressed.

“It used to be that people worried if EVs were safe to drive in the rain and floods. This has now been proven, but the next issue is the distance they can travel. People in Cambodia want to know if they can get to their hometowns. Therefore, having charging stations will be necessary to boost consumer confidence,” Olsen Kjeld said.

“Right now, families are buying EVs as their second or third car. However, we need to change the mindset of EVs as the most convenient, as it is already proven as the most economical. Also, Cambodian companies have not started thinking about EV commercial vehicles and this, along with policy changes like reducing high tax prices, will help the market,” he added.

Commitment to EV outlined in the government roadmap

Kvammen added that a commitment by the EV market outlined in the government roadmap will be key saying without visibility for a roadmap on charging stations, the EV market in Cambodia will not be taken seriously by sector actors.

“Along with the roadmap will also need to be active, such as increasing energy generation and building the charging networks. I think there are good opportunities for investment in vehicle assembly in Cambodia and basic parts manufacturing, but these skills will need to be developed,” he said.

Speaking from a banking perspective, Gagnon Jean Pierre, said there are multiple opportunities in EVs, especially financing.

“I see motorbike or car financing opportunities. We are already financing renewables, such as solar power, so we can see where we could become involved in EVs. However, there has to be a better understanding of the market in Cambodia,” he said.

He added questions like the return on investment for buyers, who will want to know if the technology is still relevant in 10 or 15 years, presents a risk.

“Also, current figures on the growth of EVs can be debated. No company can currently deliver in line with estimates which say there will be a growth of 140,000 EV motorbikes a year in Cambodia,” he added.

Talking about manufacturing opportunities, Olsen said that currently what is assembled here is what is sold here saying nothing is exported. “It is simply too expensive to assemble a car here. It comes down to what is the cost per unit. At the moment with infrastructure costs, it is not economically viable.”

Gagnon agreed that while there may be potential for assembling and recycling batteries I believe, he doesn’t see it in Cambodia yet. Kvammen added that when it came to human resources, there is significant retraining that needs to take place. 

“Maybe not yet because of the infancy of the market, but there is a need for multiple services in the EV sector. If we have a full transition to E-mobility, then there needs to be retraining to work on electronics,” Morten Kvammen said.

“This will slow down the penetration of EV, especially in more rural areas,” he added.

Wrapping up the panel discussion, moderator Natharoun Ngo Son said that three key points had been addressed.

“Firstly, we need to ensure strong collaboration between all the ministries that ensure more efficient work on all regulations surrounding EV vehicles. Second, we must explore the balance between the growth of EVs and the existing modernization of the current grid, and finally, incentivization is needed to aid the growth of the market by public and private sector actors,” he added.

The potential value of Cambodia’s clean energy transition

Day six of Clean Energy Week Cambodia 2022 (CEW22) saw several in-person and online discussions surrounding Cambodia’s switch to clean energy, including what the transition will mean for economic sustainability, sustainable transportation, and a special talk on alternatives for industrial heat in the Kingdom’s garment factories.

The day started with a high-level panel discussion at the National University of Management (NUM) on how green solutions can create a more sustainable economy for Cambodia.

The talks, which were organized by EnergyLab. were moderated by its Country Director, Natharoun Ngo Son with speakers including: 

• H.E Keo Rottanak (Attaché to the prime minister) 

• H.E. Pablo Kang (Australian Ambassador to Cambodia) 

• Ivan Keogh (Chief Executive Officer of CominAsia)

Speaking on Cambodia’s renewable energy (RE) options, Natharoun Ngo Son said that Cambodia has a unique opportunity to ensure real energy security which will benefit economic sustainability.

“When governments make decisions about their energy supplies, they need to think about the affordability for citizens, the reliability of the supply, and the energy security they provide,” Natharoun Ngo Son said.

“Issues like the global climate crises and the war in Ukraine, the latter of which has led to a significant rise in the price of coal and gas, show that fossil fuels are not reliable,” he added.

According to Natharoun Ngo Son in Cambodia, there is already some 61 percent installed capacity from renewable energy, and further investment could see the Kingdom become energy self-sufficient, negating the need to import expensive fossil fuels.

“Also, developments in RE technology mean the price of clean energy like solar, is becoming cheaper and cheaper, unlike coal. Switching to clean energy makes sense from security, cost, and reliability perspective,” Natharoun Ngo Son said.

Ivan Keogh added that RE provides jobs across the public or private sector which will support a more sustainable economy.

“From procurement, management, finance, operations to maintenance and more, there is a full project lifecycle created through clean energy. There are also other applications within this developing technology, which offer more options, for instance in e-mobility. Also, we find that there is a good balance of RE opportunities for both men and women,” Ivan Keogh said.

Speaking on the impact of energy efficiency in the private sector, Ivan Keogh believes that it isn’t all bad news saying: “Sustainability in business means innovation, digitalization, training, and improving efficiency in our processes.”

“We are improving our energy efficiency and reducing our energy consumption across our assets because it makes sense for our business. In fact, the first asset to have a rooftop solar rooftop was my office in Phnom Penh. The second is our office in South Africa and our next will be on our new Ford factory in Pursat,” he added.

Challenges faced by Cambodia to successfully transition to 100% clean energy

Speaking on the challenges faced by Cambodia to successfully transition to 100 percent clean energy, Pablo Kang said that variable forms of RE need to be complimented by infrastructure and technical development. 

“The national energy grid needs to be upgraded in places to accommodate the switch to clean energy. Battery storage needs to be invested in and also, as well as the legal frameworks and adequate financing,” Pablo Kang said.

“We need to work with the key Cambodian actors, public and private sector actors, and the broader community, on a roadmap to ensure its proper implementation,” he added. 

Solar is the best and cheapest RE available to Cambodia

The next session, named ‘Understanding Cambodia’s Commitment Toward Clean Energy Transition’, was held at the American University of Phnom Penh (AUPP), covering power policy, plans, and commitment in Cambodia.

Moderator for the talks was EnergyLab Program Manager Sok Phalkun was joined by: 

• Va Vutchy (Policy Specialist at UNDP)

• Dr. Sam Seun (Policy Analyst at the Royal Academy of Cambodia) 

• Pheng Vanna (Cool & Solar Program Manager at WWF)

Speaking on energy projections, Va Vutchy said the current demand in Cambodia is around 11.7 terawatt per hour. 

“This will reach around 57 terawatt (TW) per hour by 2040. This means we can expect a demand that will grow around 6 times. As a result, we need to diversify our energy supply using the most reliable and economically viable energy sources,” Va Vutchy said.

“Solar is the biggest and cheapest RE power resource available in Cambodia, but we need to implement a variable renewable energy strategy to capitalize on the Kingdom’s varying seasons. We also need to invest in battery storage, but the return will contribute to a more sustainable economy for many reasons,” he added.

According to Va Vutchy that firstly, it would attract investment to the country, which will in turn boost skill development and create jobs. 

“Secondly using clean energy will ensure a more secure energy supply in the future. Also, clean energy investment will mean we don’t need to import power, and money will not flow out of the country,” he said.

Speaking on the challenges Cambodia faces, Dr. Sam Sun said that raising awareness of the advantages of clean energy is just important as having the correct policy.

“There are already some good policies in place and being developed in Cambodia on RE but there are some challenges with implementation, which will require efforts from the government but also the people,” Dr. Sam Sun said.

“We need people to understand what clean energy is and why is it important. This will help with the rollout of these policies,” he added.

Va Vutchy agreed, adding “We have an opportunity with our young population, we just need to raise awareness to get more people interested and involved with the clean energy sector. 

“There are many opportunities; From solar panel design to battery building to construction. Yes, there will be a steep learning curve, but I think we can achieve it,” he added.

Telegram Channel

Cambodia's best investment news & views direct into your Telegram account.


Related Posts