Rising Energy Needs Along the Mekong

October 2, 2009

By Simon Marks

(Post by CAAI News Media)

Speaking at an energy conference in the Cambodian capital of Phnom Penh this week, Carol Rodley, the American ambassador, noted that economies in the Greater Mekong Sub-region, or G.M.S., are undergoing multiple transitions — from rural to urban, and agriculture to industry.

As such, she said, they will need to significantly up their investment in energy supply.

“These transitions will drive energy demand growth in coming decades,” Ms. Rodley told delegates at the embassy-sponsored event, which included representatives of American energy giants like Chevron and General Electric.

“In the next decade, the demand for energy at national levels is expected to continue to rise between seven percent and 16 percent per annum,” Ms. Rodley continued, “or at rates much faster than projected growth of economic activities, potentially straining existing power systems.”

Energy infrastructure in the region will therefore require “billions of dollars of investment,” she said.

Phalla Phan, deputy secretary-general of Cambodia’s Supreme National Economic Council, said that the country’s energy sector had, so far, heavily prioritized urban demand, a practice that he said has resulted in 87 percent of urban households having electric lighting, compared to just 13 percent in the rural areas.

According to government statistics, 80 percent of the population resides in rural areas. Yet the remaining 20 percent, who live in the country’s urban areas consume 90 percent of the nation’s electricity.

“Cambodia has a fragmented system mostly relying on power from diesel,” Mr. Phan said, adding that the lack of a national power grid added to high energy costs in the country.

The development of hydropower, Mr. Phan said, will necessarily play a key role in the future of Cambodia’s power sector.

Cambodia currently has three functioning hydropower dams and six more under construction. By 2020, Mr. Phan said, hydropower would supply 68 percent of Cambodia’s energy needs.

“We need private companies to help the development of the country’s energy sector,” he added.

Environmentalists, however, are concerned that hydropower projects risk wiping out Cambodia’s crucial fisheries, and with them the livelihoods of local communities. They argue that decentralized, local production of electricity would have far less impact, as would the development of micro-hydro projects, which have a far smaller impact on rivers.

Chhith Sam Ath, executive director of NGO Forum for Cambodia, an advocacy group comprised of several local and international non-governmental organizations working in the country, said that continued investment in hydropower would have lasting and detrimental effects on Cambodia’s rural inhabitants.

(Members of the NGO Forum did not to attend this week’s conference — in part because the agenda, Mr. Sam Ath said, focused so heavily on environmentally damaging energy sources.)

“I think that alternative energies could be used,” he said, adding that the demand for electricity in urban areas should not overpower the needs of those living along the Mekong River, who depend on its resources.

Still, Cambodia already imports electricity from both Thailand and Vietnam, and the rising demand for electricity in the G.M.S. is urging governments in the region to favor more regional interconnectivity over decentralized energy systems.

“To meet potential in the future,” said Porametee Vimolsiri, a senior adviser at the National Economic and Social Development Board in Thailand, “we have to have regional economic integration to help each other.”