Cambodia Investment Review

Cambodia Shifts Energy Strategy, Abandons Coal for Gas in Addition With a Major Renewable Push

Cambodia Shifts Energy Strategy, Abandons Coal for Gas in Addition With a Major Renewable Push

Cambodia Investment Review

Cambodia has abandoned its plans to construct a $1.5 billion, 700 megawatt (MW) coal-fired power project in the protected Koh Kong reserve, opting instead for an 800 MW natural-gas fired plant. This strategic shift, announced by Energy Minister Keo Rottanak, marks a notable transition in the nation’s energy policy.

The coal project, initially planned in one of Cambodia’s densest forest areas, faced criticism for potential environmental damage and pollution risks. Its cancellation is seen as a commitment to cleaner power sources. The proposed gas plant, though its cost remains undisclosed, will leverage imported liquefied natural gas (LNG), necessitating the construction of Cambodia’s first LNG terminal, which will also introduce Cambodia as a new LNG import market in Southeast Asia.

Increase Clean Energy Generation Capacity To 70% By 2030

Prime Minister Hun Manet formally announced the cancellation of the coal project during the United Nations climate conference, COP28, in Dubai. This move aligns with Cambodia’s broader energy goals to increase its clean generation capacity to 70% by 2030, up from 52% in 2022, through the development of solar, wind, and hydro projects.

Read more: Cambodia Climate Change Summit 2023 To Set a New Benchmark with Unprecedented Scope and International Partnerships

EnergyLab, a clean energy organisation dedicated to promoting the economic, security and environmental benefits of clean energy and startups added that it would be planning to collaborate with the Cambodian government and other stakeholders, has welcomed this move. The organization emphasizes the importance of a comprehensive approach in the shift to clean energy, including detailed assessments of how best to integrate batteries, pumped hydro, electric vehicles, and other technologies. This approach aims to strengthen the electricity grid, enhance energy security, and contribute towards Cambodia’s net-zero commitment by 2050.

Natharoun Ngo Son, country director for Energy Lab.

Furthermore, EnergyLab is exploring options to ensure that the new gas plant supports renewable energy generation efficiently. A critical aspect of their work involves building capacity and skills within Cambodia to drive the energy transition, which is expected to diversify the economy and create new job opportunities.

Balancing Economic Growth with Environmental Concerns

The move away from coal, with the cancellation of the Botum Sakor project, leaves only a small-scale 265 MW coal power project in development in the northern Oddar Meanchey province. The Botum Sakor project, which was to be built, owned, and operated by the Royal Group, will now see the conglomerate focusing on the gas project instead.

The shift to gas is part of a wider clean energy strategy with the Cambodian government planning to double the solar power capacity to 2 gigawatts by 2030. Additionally, an extra 1 gigawatt of pumped hydro storage capacity is expected by 2028. The inclusion of wind power in the national energy plan is also a significant step, as it complements solar and hydro sources.

This strategic shift in Cambodia’s energy policy not only represents a significant step towards a more sustainable and cleaner energy future but also positions the nation as a leader in renewable energy in the region. The comprehensive strategy laid out by the government and supported by organizations like EnergyLab highlights the country’s commitment to balancing economic growth with environmental concerns.

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