ALTERNATIVES FOR POWER GENERATION IN THE GREATER MEKONG...

ALTERNATIVES FOR POWER GENERATION IN THE GREATER MEKONG SUB-REGION

Volume2:

Power Sector Vision for the KingdomofCambodia

Final

20 March 2016

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DisclaimerThis report has been prepared by Intelligent Energy Systems Pty Ltd (IES) and

MekongEconomics (MKE) in relationtoprovisionofservices toWorldWideFund

forNature(WWF).Thisreportissuppliedingoodfaithandreflectstheknowledge,

expertiseandexperienceof IESandMKE. Inconducting theresearchandanalysis

forthisreportIESandMKEhaveendeavouredtousewhatitconsidersisthebest

information available at the date of publication. IES and MKE make no

representationsorwarrantiesas to theaccuracyof theassumptionsorestimates

onwhichtheforecastsandcalculationsarebased.

IESandMKEmakenorepresentationorwarrantythatanycalculation,projection,

assumption or estimate contained in this report should or will be achieved. The

reliance that the Recipient places upon the calculations and projections in this

reportisamatterfortheRecipient’sowncommercialjudgementandIESacceptsno

responsibilitywhatsoeverforanylossoccasionedbyanypersonactingorrefraining

fromactionasaresultofrelianceonthisreport.

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AcronymsAD AnaerobicDigestion

ADB AsianDevelopmentBank

ASEAN AssociationofSoutheastAsianNations

ASES AdvancedSustainableEnergySector

BAU BusinessAsUsual

BNEF BloombergNewEnergyFinance

BTU/Btu BritishThermalUnit

CAGR CompoundAnnualGrowthRate

CAPEX CapitalExpenditure

CCGT CombinedCycleGasTurbine

CCS CarbonCaptureandStorage

COD CommercialOperationsDate

CSP ConcentratedSolarPower

DNI DirectNormalIrradiation

DTU TechnicalUniversityofDenmark

EAC ElectricityAuthorityofCambodia

EDC ElectriciteDuCambodge

EE EnergyEfficiency

EIA EnergyInformationAdministration

FOB FreeonBoard

FOM FixedOperatingandMaintenance

HV HighVoltage

GDP GrossDomesticProduct

GHI GlobalHorizontalIrradiance

GMS GreaterMekongSubregion

GT GasTurbine

HFO HeavyFuelOil

ICT InformationandCommunicationTechnology

IEA InternationalEnergyAgency

IES IntelligentEnergySystemsPtyLtd

IPP IndependentPowerProducer

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IRENA InternationalRenewableEnergyAgency

LCOE OverallLevelisedCostofElectricity

LNG LiquefiedNaturalGas

MERRA ModernEra-RetrospectiveAnalysis

MKE MekongEconomics

MIME MinistryofIndustry,MiningandEnergy

MME MinistryofMinesandEnergy

MOIT MinistryofIndustryandTrade(Vietnam)

MV MediumVoltage

NASA NationalAeronauticsandSpaceAdministration(the

UnitedStates)

NPV NetPresentValue

NREL NationalRenewableEnergyLaboratory(theUnitedStates)

OECD OrganisationforEconomicCo-operationandDevelopment

OPEC OrganisationofthePetroleumExportingCountries

OPEX OperationalExpenditure

PDR People’sDemocraticRepublic(ofLaos)

PEA ProvincialElectricityAuthority(Thailand)

PEC ProvincialElectricityCompany

PRC People’sRepublicofChina

PV Photovoltaic

RE RenewableEnergy

REE RuralElectricityEnterprise

RGC RoyalGovernmentofCambodia

ROR RunofRiver

SCADA/EMS SupervisoryControlandDataAcquisition/Energy

ManagementSystem

SES SustainableEnergySector

SWERA SolarandWindEnergyResourceAssessment

SWH SolarWaterHeating

UN UnitedNations

USD UnitedStatesDollar

VOM VariableOperatingandMaintenance

WEO WorldEnergyOutlook

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WWF WorldWideFundforNature

WWF-

GMPO

WWF–GreaterMekongProgrammeOffice

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TableofContents1 Introduction 9

1.1 ReportStructure 9

2 Background:Cambodia’sElectricitySector 11

2.1 IndustryStructure 11

2.2 PowerSystem 11

2.3 InstalledCapacity 12

2.4 ElectricityDemand 14

2.5 GenerationSupply 15

2.6 PowerImports 17

3 DevelopmentOptionsforCambodia’sElectricitySector 19

3.1 NaturalGasResources 19

3.2 CoalResources 20

3.3 NuclearEnergy 21

3.4 HydroPower 21

3.5 WindPower 22

3.6 SolarPower 26

3.7 BiomassandBiogass 29

3.8 OceanEnergy 29

3.9 RenewableEnergyPotentialandSeasonality 29

4 CambodiaDevelopmentScenarios 31

4.1 Scenarios 31

4.2 TechnologyCostAssumptions 34

4.3 FuelPricingOutlook 36

4.4 CambodiaRealGDPGrowthOutlook 38

4.5 PopulationGrowth 40

4.6 CommittedGenerationProjectsinBAU,SESandASESScenarios 40

4.7 ImportsandExports 41

4.8 Technical-EconomicPowerSystemModelling 42

5 BusinessasUsualScenario 45

5.1 BusinessasUsualScenario 45

5.2 DemandGrowth 45

5.3 InstalledCapacityDevelopment 47

5.4 ProjectedGenerationMix 50

5.5 GridtoGridPowerFlows 53

5.6 GenerationFleetStructure 53

5.7 ReserveMarginandGenerationTrends 55

5.8 ElectrificationandOffGrid 57

6 SustainableEnergySectorScenario 58

6.1 SustainableEnergySectorScenario 58

6.2 DemandGrowth 58






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6.8 ElectrificationandOffGrid 72

7 AdvancedSustainableEnergySectorScenario 74

7.1 AdvancedSustainableEnergySectorScenario 74

7.2 DemandGrowth 74






7.8 ElectrificationandOff-Grid 86

8 AnalysisofScenarios 89

8.1 EnergyandPeakDemand 89

8.2 EnergyIntensity 91

8.3 GenerationMixComparison 92

8.4 CarbonEmissions 94

8.5 HydroPowerDevelopments 95

8.6 AnalysisofBioenergy 95

8.7 SecurityofSupplyIndicators 97

8.8 InterregionalPowerFlows 100

9 EconomicImplications 102

9.1 OverallLevelisedCostofElectricity(LCOE) 102

9.2 LCOEComposition 103

9.3 OffgridCostComparison 105

9.4 CumulativeCapitalInvestment 106

9.5 OperatingCosts,AmortisedCapitalCostsandEnergyEfficiencyCosts 110

9.6 FuelPriceSensitivity 116

9.7 ImpactofaCarbonPrice 117

9.8 RenewableTechnologyCostSensitivity 118

9.9 JobsCreation 119

10 Conclusions 122

10.1ComparisonofScenarios 122

10.2EconomicImplications 124

10.3IdentifiedBarriersfortheSESandASES 125

10.4Recommendations 126

AppendixA TechnologyCosts 129

AppendixB FuelPrices 133

AppendixC MethodologyforJobsCreation 134

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1 IntroductionIntelligent Energy Systems Pty Ltd (“IES”) and Mekong Economics (“MKE”) havebeen retained byWWF – GreaterMekong ProgrammeOffice (“WWF-GMPO”) toundertakeaprojectcalled“Produceacomprehensivereportoutliningalternativesfor power generation in the Greater Mekong Sub-region”. This is to developscenarios for the countries of the GreaterMekong Sub-region (GMS) that are asconsistentaspossiblewithWWF’sGlobalEnergyVisiontothePowerSectorsofallGreater Mekong Subregion countries. The objectives of WWF’s vision are: (i)contributetoreductionofglobalgreenhouseemissions(cutby>80%of1990levelsby2050);(ii)reducedependencyonunsustainablehydroandnuclear;(iii)enhanceenergyaccess; (iv) takeadvantageofnewtechnologiesandsolutions; (v)enhancepower sector planning frameworks for the region:multi-stakeholder participatoryprocess;and(vi)developenhancementsforenergypolicyframeworks.

Thepurposeofthisreportistoprovidedetailedcountry-leveldescriptionsofthreescenariosfortheKingdomofCambodia’s(Cambodia’s)powersector:

• BusinessasUsual (BAU)powergenerationdevelopmentpathwhich isbasedoncurrentpowerplanningpractices,currentpolicyobjectives,

• Sustainable Energy Sector (SES) scenario, where measures are taken tomaximally deploy renewable energy 1 and energy efficiency measures toachieveanear-100%renewableenergypowersector;and

• Advanced Sustainable Energy Sector (ASES) scenario,which assumes amorerapid advancement and deployment of new and renewable technologies ascomparedtotheSES.

The scenarios were based on public data, independent assessments of resourcepotentials, information obtained from published reports and power systemmodellingoftheGMSregionfortheperiod2015to2050.Allprojectionspresentedinthisreportcommenceintheyear2015.

1.1 ReportStructure

Thisreporthasbeenstructuredinthefollowingway:

• Section2setsoutrecentoutcomesforCambodia’selectricityindustry;

• Section3summarisesthemaindevelopmentoptionscoveringbothrenewableenergyandfossilfuels;

• Section4providesabriefsummaryofthescenariosthatweremodelledandasummaryofsomekeyassumptions;

• Section5setsoutthekeyresultsforthebusinessasusualscenario;

1Proposed but not committed fossil fuel based projects are not developed. Committed and existing fossil fuelbasedprojectsareretiredattheendoftheir lifetimeandnotreplacedwithotherfossil fuelprojects. A leastcostcombinationofrenewableenergygenerationisdevelopedtomeetdemand.

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• Section6setsoutthekeyresultsforthesustainableenergysectorscenario;

• Section7 sets out the key results for an advanced sustainable energy sectorscenario;

• Section 8 provides comparative analysis of the scenarios based on thecomputationofanumberofsimplemetricsthatfacilitatecomparison;

• Section9providesanalysisofeconomicimplicationsforeachscenario;and

• Section10providesthemainconclusionsfromthemodelling.

Thefollowingappendicesprovidesomeadditionalinformationforthescenarios:

• AppendixAcontainsthetechnologycostassumptionsthatwereused;

• AppendixBprovidesthefuelpriceprojectionsthatwereused;and

• Appendix C sets out some information on the methodology used forestimatingjobscreationforeachscenario.

Note that unless otherwise stated, all currency in the report is Real 2014UnitedStatesDollars(USD).

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2 Background:Cambodia’sElectricitySector

2.1 IndustryStructure

Anoverall structural representationofCambodia’selectricitysector isprovided inFigure 1. The governing bodies and rule making institutions are the RoyalGovernment of Cambodia (RGC), Electricity Authority of Cambodia (EAC) andMinistryofMinesandEnergy(MME).

The Electricite Du Cambodge (EDC) is the state-owned entity responsible fordevelopinggeneration,transmissionanddistributionrequirementsthroughoutthecountry.TheEDCisownedbytheMMEandtheMinistryofEconomicsandFinance.

Otherserviceprovidersincludeprivateentities(IPPs)inprovincialtowns,ProvincialElectricityCompanies(PECs)insmalltownsandRuralElectricityEnterprises(REEs).REEsgenerallyoperatesmalldieselgeneratorsfortheirownusewithinmini-grids.

Figure1 StructureofCambodia’sElectricitySector

Source:CountryReportPresentation,Ritouch,May2011

2.2 PowerSystem

ArepresentationofCambodia’spowersystemisillustratedinFigure2.Thediagramhighlightsthepresentstateofthecountry'snationalpowersystemintermsofthe

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locations of key generation resources and the 115/220 kV transmission lines thatinterconnectthenationalsystemandtheirpaths.

Figure2 CambodiaElectricitySystem(2014)

Cambodia’stransmissionsysteminitiallyconsistedof24isolatedprovincialsupplygrids,whichhavegraduallybeenintegratedintothesinglemaingridoverthepast10 years with all provinces expected to be connected by 2020. Cambodia’selectricitypricesareoneofthehighest intheASEANregionasthepowersectorrelieson importeddiesel to satisfydemand forelectricity.Other featuresof theCambodianpowersystem(asofend2014)include:

• Totalinstalledgenerationcapacity:1,511MW;

• Totalelectricitysupplied:4,861GWh;

• Totalelectricitydemand:4,144GWh;

• Peakdemand(systemwide):927MW;

• ImportstoDomesticGenerationRatio:37%to63%;and

• Villageelectrificationratesofapproximately62%.

2.3 InstalledCapacity

Figure3showstheinstalledcapacityonanational levelbytypeofgenerationforthe period from2004 to 2014. This illustrates that Cambodia’s power generationcapabilityremainedquitelimited(oflessthan400MW)andentirelydependenton

Demand Centre

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dieselandfueloiluntilafter2010.From2011to2014,total installedcapacityhasincreased significantly and has become more diversified with hydro and coalprojectsplaying roles in the capacitymix. Figure4 illustrates the capacitymix inpercentagebyendof2014.This shows thathydropowerhasbecomeCambodia’sdominant generation technology, accounting for 62% of the total 1,511 MWinstalledcapacity.Itisfollowedbydiesel/heavyfueloil(HFO)at19%,coal-firedat18%andbiomassat1%.

Figure3 CambodiaPowerGenerationInstalledCapacity(2004-14)

Source:EACStatistics(2015)

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Figure4 CambodiaCapacityFuelMix(2014)


2.4 ElectricityDemand

Figure5graphs theelectricity supplied toCambodia (that isgeneratedwithin thecountry aswell as imported fromneighbouring countries) and theelectricity thathasbeensoldtoendusersinCambodia.Annualaveragegrowthratesfrom2004to2014 are also plotted on the chart. Over the period shown, national electricitydemand inCambodiahas increasednearly six-fold, fromsome704GWh to4,144GWh,withacompoundannualgrowthrate(CAGR)of19.4%,whichisquitehighfora power system. Such rapidly growing demand has been attributed to: (1)Cambodia’seconomicgrowthasmeasuredbyannualGDPgrowthrateswhichhavebeen in range from 7% to 8%, (2) urban population growth, and (3) increasedelectrificationrates.Some70%ofCambodia’snationaldemandisconcentratedinPhnomPenh.Demand isexpectedtocontinuetorise in linewithageneralpolicydirectionofincreasingaccesstoelectricitywithaccessbeingprovidedtoruralareasand also the expansion of the transmission system in order to reduce deliveredelectricitycosts2.

The residential sector has traditionally consumed the highest proportion of totalelectricityconsumptioninthecountry.ThisisillustratedinFigure6,whereitcanbeseenthatfor2012theresidentialshareofelectricityconsumptionwassome50%ofthe total,while consumption attributable to the commercial and services sectorsmadeupsome28%withtheindustrialsectormakinguptheremaining18%.

2For example, if an isolated grid that is poweredmainly by expensive diesel generation is interconnected to thenationalsystemwhichcanpoolgenerationfromavarietyofsources,includingsayhydroandsolargeneration,thentheneed for runningdiesel units to supply electricity canbe avoidedhence the total cost of supplying electricityreduced.

Hydro62%

Diesel/HFO19%

Coal18%

Biomass1%

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Figure5 ElectricityDemandTrends(2004-14)


Figure6 ElectricityDemandSharesbyCategory(2012)

Source:IEA(2014)

2.5 GenerationSupply

Figure 7 showsCambodia’s annual electricity generation from2004 to 2014. Thisillustrates that as a result of recent significant capacity additions, the domesticpower supply almostdoubled in2014 to reacha total of 3,058GWh. Theoverall

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sharesof generationby fuel type areplotted for 2014 in Figure8.Aswas earlierobserved for the capacity mix, the generation mix reflects the dominance ofhydropower in Cambodia’s power system, with hydro generation accounting fornearly61%ofthetotal.Thiswasfollowedbycoal-basedgenerationat28%,dieselandHFOatsome11%andbiomassmakinguptheremainderat0.5%.Itshouldbenoted that total generation from generators in Cambodia is lower than the totalelectricity supplied because Cambodia currently has a reliance on power importsfromneighbouringcountries(showninFigure9).

Figure7 TotalElectricityGeneration(2000-2014)

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Figure8 DomesticGenerationMixProportionbyFuelType(2014)


2.6 PowerImports

Cambodia’sNationalGridreceivesimportedelectricitysupplyfromVietNamat230kVand22kV,Thailandat115kVand22kVandLaosat22kVinterconnections.TheMinistryofMinesandEnergy(MME)hasinplaceanagreementwiththeMinistryofIndustryandTrade(MOIT)inVietNamforpowerpurchasesfromVietNamthrougha number of cross-border transmission lines. Supply from Thailand via theProvincial Electricity Authority of Thailand (PEA) is sold to some of the ProvincialElectricity Companies (PECs) in areas near the Cambodia and Thailand border.MostoftheseimportsarenotconnectedtoCambodia’snationalsystem. ImportsfromLaoPDRaremanagedviaEDCandsuppliedtotheSteungTrengarea.

Figure9illustratesthevariationsinelectricityimportsfrom2004to2014.Overthelast year, 1,803GWh or 37% of Cambodia’s total electricity demandwasmet bypower transfers fromVietNam, Thailand and Lao PDR. The largest proportion ofimported electricity was recorded in 2011, withmore than 64% of the domesticdemandsuppliedfromoverseassources.VietNamisthelargestpowerexportertoCambodia,delivering70%ofthecountry’stotalimportedelectricity,withThailandsupplyinganother29%andLaoPDRtheremaining1%.

Hydro60.5%

Diesel/HFO10.7%

Coal28.2%

Biomass0.5%

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Figure9 CambodiaElectricityImports(2004-14)


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3 DevelopmentOptionsforCambodia’sElectricitySector

3.1 NaturalGasResources

Cambodia currently imports all of its oil and natural gas needs from Singapore,ThailandandVietNam.

There is an estimated 140 billion cubic meters of gas reserves in Cambodiaincludingitsoffshorebasins3.In2005itwasannouncedgaswasfoundinonewelllocated in Block A (see Figure 10). To date no gas (and oil) production hascommencedduetotheuncertainlegalframeworkandinsufficientservicecapacityandinfrastructuretosupporttheprocessing.Thegovernmenthowevercontinuespushing towards oil and gas production, hoping for it to happen sooner ratherthanlatertoreduceenergyrelianceonothercountries.

3IEEJ, “Sustainable Development of Energy and Electricity Policy in Cambodia”, 21 June 2015, available:

https://eneken.ieej.or.jp/data/6231.pdf.

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Figure10 Cambodia’sOilandGasExplorationBlocks

3.2 CoalResources

EstimatesofcoalreservesinCambodiaarelow.Coalreservesareknowntoexistin the Stung Treng province located in northern Cambodia (shown in Figure 11)andasofearly2013,14exploration licenseshavebeen issued tocompanies forlocalcoalexploration4.Cambodia’sfirst120MWcoal-firedpowerplant,suppliedwith imported coal, commenced operation in February 2014 in Steung HavDistrict,SihanoukvilleProvince.

4CurrentSituationoftheMiningIndustryinCambodia,MIME,2013

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Figure11 CambodiaCoalMap

3.3 NuclearEnergy

Therearenocurrentplanstoincorporatenucleartechnologyintothecapacitymix.

3.4 HydroPower

Cambodia has an estimated hydro potential of 10,000MW, with currently lessthan 10% developed. Approximately 50% of these resources are located in theMekongRiverBasin,40%on tributariesof theMekongRiver,and the remaining10% in the south-western coastal areas. Hydro has been a focus of recentdevelopments with previous studies highlighting 42 potential hydropowerprojects,withatotalinstalledcapacityof1,825MW,beingcapableofgeneratingaround9,000GWh/yearof electricity5. Figure12 indicatespossible locations forhydropowerdevelopmentthroughoutthecountry.

By end of 2014, approximately 830 MW of installed hydropower capacity hadbeen in operation, approximately 800MWwas under construction and another198MWbeingconsideredforfeasibility.

5http://www.reegle.info/policy-and-regulatory-overviews/KH,accessed10April2015

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Figure12 PossibleHydroSitesinCambodia

Source:PowerDevelopmentPlan,MIME

3.5 WindPower

Cambodiadoesnothavevastwindresources.Onaveragethewindspeedsacrossthecountryareunder3m/s.Thetechnicalpotentialrepresentsanupperlimitandshows1,380MWcategorisedatorabovegoodwindspeeds6.

Nevertheless, some parts of Cambodia may present opportunities for winddevelopments.Thesewindresourceareasaregenerallyfoundinthesouthernpartof the great lake Tonle Sap, themountainous districts in the southwest and thecoastal regions (Sihanoukville, Kampot, Kep and Koh Kong regions) and have anannualaveragewindspeedof5m/sorgreater.AlthoughthepotentialinCambodiaissmall relativetotheotherGMScountrieswindmaybeviablegivenCambodia’srelatively lowenergy levelsand technicalmaturityofwind technology.Windpilotprojects, in part financed by the government of Belgium and the EuropeanCommission,arecurrentlyinplaceinthecountry.

Figure 13 shows average monthly wind speed measurements for Cambodia asreportedbyNASAAtmosphereScienceDataCentreforthelocationsthathavethe

6Studywasbasedonglobalwindsandwerenotsupportedbygroundmeasurements

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highest average wind speeds throughout the year. This shows that a number oflocations inCambodiarecordhighwindspeedsduringtheperiodofNovembertoFebruary.

Basedonanalysisofmonthlywindspeedmeasurementstakenatdifferentlocationsin Cambodia,when the locationswith the bestwind potential are shaded over amap of Cambodia, as illustrated in Figure 14, we can see that in the main thelocations are along the country’s eastern region and south-west coastal area. Adifferent source of wind speed measurements based on higher resolutioninformation is illustrated in Figure 15. This figure shows 3TIER’s Global WindDataset7which provides average annual wind speed at 80 meters above groundlevel. This is largely consistent with the lower resolution information that wasprocessedtoproduceFigure14,withgreatestpotentialshowninthenortheastofthe country and a belt ofwind potential from the south coast towards thewestborder of Thailand. Figure 16 shows anothermapofwind speeds at 50mabovegroundlevelwithafocusonoffshorewindspeeds.Thisshowsthattheredoesnotappeartobehighoffshorewindpotential.

Figure 17 shows the DTU Global Wind Atlas8onshore and 30 km offshore windclimatedatasetwhichaccountsforhighresolutionterraineffectsfor100maboveground level. Accordingtothe IRENAglobalatlasdescription:“thiswasproducedusingmicroscalemodellingintheWindAtlasAnalysisandApplicationProgramandcapture small scale spatial variability of winds speeds due to high resolutionorography (terrain elevation), surface roughness and surface roughness changeeffects.ThelayerssharedthroughtheIRENAGlobalAtlasareservedat1kmspatialresolution.ThefullAtlascontainsdataatahigherspatialresolutionof250m,andsomeoftheIRENAGlobalAtlastoolsaccessthesedataforaggregatedstatistics.”

7Source:3TIERdatasetwasaccessedviatheIRENAGlobalAtlasServer:http://irena.masdar.ac.ae/.8See:http://globalwindatlas.com/.

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Figure13 MonthlyWindSpeedsforSelectedLocationsinCambodia(m/s)

Source:NASAAtmosphereScienceDataCentre,obtainedviatheSWERAGeospatialToolkit

Figure14 LocationsinCambodiawithGreatestWindPotential

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Figure15 3TIER’sGlobalWindDataset5kmonshorewindspeedat80mheight9

Source:3TIER’sGlobalWindDataset(accessedviaIRENAGlobalAtlas)

Figure16 Global Wind 50m Height from MERRA by Sander and Partner10averagedfor1980to2011(OffshoreWindPotential)

Source:MERRAbySanderandPartner(accessedviaIRENAGlobalAtlas)

9Averageforperiod1980.10Meanwindspeedat50mbasedonvaluesforeachhourduringtheperiod1980-2011.

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Figure17 AverageWindSpeed1kmat100mAGLDTU(2015)

Source:IRENAGlobalAtlasandGlobalWindAtlas(2015)

3.6 SolarPower

Cambodia is considered to have high solar energy potential, which has beenestimatedtobeatleast8,074MW11accordingtothelatestADBstudy12ontheGMSrenewable energy development opportunities in 2015. An earlier study onrenewable energy options for Cambodia’s rural electrification had also indicatedthat significant parts of the country have average direct normal irradiation (DNI)levels in excess of 5 kWh per square meter per day. Despite these favourableconditions for solar energydevelopmentboth forDNI andGHI (GlobalHorizontalIrradiance)basedtechnologies,thecurrentinstalledcapacityinCambodiaforsolarphotovoltaicsremainsataverylowleveloflessthan2MW.Figure 18 plots monthly average DNI levels for selected sights with the highestannual average DNI levels in Cambodia. This shows the monthly variationthroughouttheyearforsolarDNIandisaproxyforexpectedgenerationfromsolarforms of electricity generation. This highlights that November through to AprilexhibitexcellentsolarconditionsandthatthesewouldbesuitableforphotovoltaicsandwouldlikelybeabletosupportConcentratedSolarPower(CSP)technology.Themap shading the locations of solar for Cambodia is provided in Figure 19,

11Represents thetechnicalpotential taking intoaccountwaterbodies,protectedareas,orareasunsuitable forPVdevelopmentbecauseofslopeandelevation.IESestimatestheactualpotentialtobesignificantlyhigher.12 Source: http://www.adb.org/publications/renewable-energy-developments-and-potential-gms, accessed: 10February2016.

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highlightingthewaterbodies. Figure20plotsmeasurementsofGlobalHorizontalIrradiancebasedon a high resolutiondatasetwhich largely shows consistentGHImeasurements throughout the country with higher concentration towards thenortheastregionofthecountryandconsistentwiththeDNImeasurements.

Figure18 MonthlyDNILevelsforSelectedLocationsinCambodia

Source:NASAAtmosphereScienceDataCentre,obtainedviatheSWERAGeospatialToolkit

Figure19 MainLocationswithSolarPowerPotentialinCambodiaforDNI

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Figure20 3TIER’sGlobalSolarDataset(3kminW/m^2)forGHI

Source:3TIER’sGlobalSolarDataset(accessedviaIRENAGlobalAtlas)

Figure21 3TIER’sGlobalSolarDataset(3kminW/m^2)forGHIandCambodia’sTransmissionNetwork(2013)

Source:3TIER’sGlobalSolarDataset(accessedviaIRENAGlobalAtlas)

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3.7 BiomassandBiogass

Cambodia has significant biomass resources such as that from forests, plantationforests,ricehusksandpalmtrees.Biomasscanbeusedforpowerrequirementsorconverted intoother fuels.The2015ADBstudyestimatedCambodia’s theoreticalbiomass energy generation potential at 15,025 GWh/year and technical biogaspotentialfromlivestockmanureisestimatedat13,590,766kWh/day.

Biomass-basedenergy generation inCambodiahas gainedmomentumduring thelast 2-3 years with biomass gasification technologies being in use for captiveconsumptionaswellaselectricitygenerationandsupplycompanies;however,theenergyefficiencyislowandimplementedprojectsremainsmallinscale.

ExamplesofabiomassprojectincludetheBattambangricehuskgasificationprojectcapable of generating 200 kW from processing 2 tonnes of rice per hour. Thispresents future biomass opportunities as Cambodia increases its rice exportpotentialsuchastheoperationofthecogenerationpowerplantattheGoldenRicemill inKampongSpeu(25t/hprocessingcapacity).Several largescaleprojectsareplannedatvarioussugarcaneandpalmoilplantations.Therearealsovariousothersmallerbiomasspilotprojectsatricemills,icefactories,brickfactoriesandgarmentfactories,ofaround40projectswithcapacitiesbetween150kWand700kW.

3.8 OceanEnergy

There are no studies of ocean/marine energy in Cambodia highlighting anysignificantpotentialtodeveloptidalorwavetechnologiesintothegenerationmix.

3.9 RenewableEnergyPotentialandSeasonality

TherenewableenergypotentialwehaveassessedandwillassumeinthemodellingofthepowersectorscenariosinthisreportforCambodiahasbeensummarisedinTable1.ThenumberspresentedherehavebeendrawnfrommultiplesourcesandinformedbyIESanalysisofIRENA’sGlobalAtlasdata.

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Table1 Summary of Estimated Renewable Energy Potential (CompiledfromVariousSourcesandAnalysis)

RenewableEnergyResource Potential(MW) Sourceandcomments

Hydro(Large) 10,000 Seesection3.4.

Hydro(Small) 700 WorldSmallHydropowerDevelopmentReport(2013).

PumpStorage 0 Lackofstudiesavailable.

Solar Atleast11,000IESassessmentbasedonDNIandGHIresourcemapsandassociateddataasdescribedinsection3.6.

WindOnshore 500andupPowerSectorVisionfortheMekongRegion:theBlueCircle(2015).

WindOffshoreEvidenceforpotential,

butassumed0MWRefertoresourcemapsinsection3.5.

Biomass 2,392 IESprojectionsbasedondatafromRenewableEnergyDevelopmentsandPotentialintheGreaterMekongSubregion(ADB,2015).Biogas 1,591

Geothermal 0 Lackofstudiesavailable.

Ocean 0 Lackofstudiesavailable.

Figure 22 plots the seasonal variation of renewable energy generation profiles inCambodia for solar and wind. This shows that unlike some of the other GMScountries, seasonal patterns of expected solar and wind generation tend to becorrelatedthroughSeptembertoMay,althoughthereisamonsoonalwindpatternthattendstocoincidewiththerainyseason.Similarly,totheotherGMScountries,there is anti-correlation in seasonal patterns of the wet season and when solarirradiationreachesitspeak.Throughmid-JunetoOctoberlowsolarirradiationandwind speeds would be complemented by higher levels of generation fromhydropower during thewet season. Thus solar, wind and hydro are likely to begoodcomplementarytechnologiesinCambodia.

Figure22 SeasonalSolarandWindProfilesandWetSeason

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4 CambodiaDevelopmentScenariosInthissection,wedefinethethreescenariosforCambodia’selectricitysectorthatwe havemodelled: the Business as Usual (BAU), Sustainable Energy Sector (SES),and Advanced SES (ASES) scenarios. We also set out the assumptionsmade fortechnology costs (section 4.2) and fuel prices (section 4.3) before providing thedetailsforanumberofCambodia-specificassumptions–inparticular:ourassumedeconomic outlook for Cambodia, a list of generation projects that we considercommitted13and comments on the status of power import projects. FurtherassumptionsforeachscenarioareprovidedinSection5,Section6andSection7.

4.1 Scenarios

The three development scenarios (BAU, SES and ASES) for Cambodia areconceptuallyillustratedinFigure23.

Figure23 GMSPowerSectorScenarios

TheBAU scenario is characterisedbyelectricity industrydevelopments consistentwiththecurrentstateofplanningwithintheGMScountriesandreflectiveofgrowthrates in electricity demand consistent with an IES view based on currentdevelopments, existing renewable energy targets, where relevant, aspirationaltargets for electrification rates, and energy efficiency gains that are largelyconsistentwiththepoliciesseenintheregion.

13That is, construction is already in progress, the project is near to commissioning or it is in an irreversible /advancedstateoftheplanningprocess.

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Incontrast,theSESseekstotransitionelectricitydemandtowardsthebestpracticebenchmarksofotherdevelopedcountries in termsofenergyefficiency,maximisetherenewableenergydevelopment,ceasethedevelopmentoffossilfuelresources,and make sustainable and prudent use of undeveloped conventional hydroresources.Whererelevant,itleveragesadvancesinoff-gridtechnologiestoprovideaccess to electricity to communities that are located far from the grid. The SEStakesadvantageofexisting,technicallyprovenandcommerciallyviablerenewableenergytechnologies.

TheASESassumesthatthepowersectorisabletomorerapidlytransitiontowardsa100% renewable energy technology mix under an assumption that renewableenergytechnologiescanbedeployedmorerapidlythan intheSESscenarioand ithas renewable energy technology costs decliningmore rapidly compared to BAUandSESscenarios.AsummaryofthekeyfeaturesofthethreescenariosisgiveninTable214.

Table2 KeyFeaturesofBAU,SESandASES

Scenario Demand SupplyBAU Demandisforecasttogrowin

linewithhistoricalelectricityconsumptiontrendsandprojectedGDPgrowthratesusingtechniquesthatarelargelythesameaswhatistypicallydoneingovernmentplans.Electricvehicleuptakeisassumedtoreach15%acrossallcarsandmotorcyclesby2050(1.1m).

Generatornewentryfollowsthatofpowerdevelopmentplansforthecountryincludinglimitedlevelsofrenewableenergy.

SES • AssumesatransitiontowardsenergyefficiencybenchmarkfortheindustrialsectorofHongKong15andofSingaporeforthecommercialsectorbyyear2050.

• Fortheresidentialsector,itwasassumedthatresidential

• Assumesnofurthercoalandgasnewentrybeyondwhatisalreadyunderstoodtobecommitted.

• Amodestamountoflargescalehydro(between4,000to5,000MWintotal)isdeployedinLaoPDRandMyanmaraboveandbeyondwhatisunderstoodtobe

14Note thatwe summarise thekeydrivershere. For furtherdetails,please refer to the separate IESassumptionsdocument.15Based on our analysis of comparators in Asia, Hong Kong had the lowest energy to GDP intensity for industrialsectorwhileSingaporehadthelowestforthecommercialsector.

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Scenario Demand Supplydemandperelectrifiedcapitagrowsto750kWhpaby2050,38%lessthanintheBAU.

• Demand-responsemeasuresassumedtobephasedinfrom2021withsome15%ofdemandbeingflexible16by2050.

• SlowergridelectrificationratesforthenationalgridsinCambodiaandMyanmarcomparedtotheBAU,butdeploymentofoff-gridsolutionsthatachievesimilarlevelsofelectricityaccess.

• Mini-grids(off-gridnetworks)areassumedtoconnecttothenationalsysteminthelonger-termforreliability/mutualsupportreasons.

• ElectricvehicleuptakeaspertheBAU.

committedhydrodevelopments17.

• SupplyisthendevelopedbyaleastcostcombinationofrenewablegenerationsourceslimitedbyestimatesofpotentialratesofdeploymentandjudgmentsonwhentechnologieswouldbefeasibleforimplementationtodeliverapowersystemwiththesamelevelofreliabilityastheBAU.

• Technologiesusedinclude:solarphotovoltaics,biomass,biogasandmunicipalwasteplants,CSPwithstorage,onshoreandoffshorewind,utilityscalebatteries,geothermalandoceanenergy.

• TransmissionlimitsbetweenregionsareupgradedasrequiredtosupportpowersectordevelopmentintheGMSasanintegratedwhole,andthetransmissionplanallowedtobedifferentcomparedtothetransmissionplanoftheBAU.

ASES TheASESdemandassumptionsareessentiallyasensitivitytotheSES:• Anadditional10%energyefficiencyappliedtotheSESdemands(excludingtransport).

• Flexibledemandassumedtoreach25%by2050.

• Uptakeofelectricvehiclesdoubledby2050.

ASESsupplyassumptionsarealsoimplementedasasensitivitytotheSES,withthefollowingthemaindifferences:• AllowratesofrenewableenergydeploymenttobemorerapidascomparedtotheBAUandSES.

• Technologycostreductionsareacceleratedforrenewableenergytechnologies.

• Implementamorerapid

16Flexible demand is demand that can be rescheduled at short notice andwould be implemented by a variety ofsmartgridanddemandresponsetechnologies.17This is important to all countries because the GMS is modelled as an interconnected region with significantconventionalbaseloadcapacityretiringaround2030.

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Scenario Demand Supply• ElectrificationratesinCambodiaandMyanmarremainconstantaftersolarPVandbatterystoragereachparitywithgridextensioncosts.

programmeofretirementsforfossilfuelbasedpowerstations.

• Energypolicytargetsof70%renewablegenerationby2030,90%by2040and100%by2050acrosstheregionareinplace.

• Assumethattechnical/operationalissueswithpowersystemoperationandcontrolforaveryhighlevelofrenewableenergyareaddressed18.

4.2 TechnologyCostAssumptions

Technology capital cost estimates from a variety of sources were collected andnormalised tobeonaconsistentanduniformbasis19. Mid-pointswere taken foreachtechnologythatisrelevanttotheGMSregion.Thedatapointscollatedreflectovernight, turnkey engineering procurement construction capital costs and areexclusive of fixed operating and maintenance costs, variable operating andmaintenancecostsandfuelcosts. Thecapitalcostsbytechnologyassumedinthestudy are presented in Figure 24 for the BAU and SES scenarios. For the ASESscenario,weassumedthatthetechnologycostsofrenewabletechnologiesdeclinesmorerapidly.ThesetechnologycostassumptionsarelistedinFigure25.Notethatthetechnologycapitalcostspresentedheredonotincludelandcosts,transmissionequipment costs,nordecommissioning costsandarequotedonaRealUSD2014basis.

CommentsonthevarioustechnologiesarediscussedbelowinrelationtotheBAUandSEStechnologycosts:

• Conventional thermal technology costs areassumed todecreaseat a rateof0.05%pa citingmaturation of the technologieswith no significant scope forcostimprovement.CoalCarbonCaptureandStorage(CCS)costsarebasedonSupercriticalPulverisedblackcoaltechnologywithdecreasesovertimebasedontheAustralianEnergyTechnologyAssessment2013ModelUpdatereport.

• Onshorewindcostswerebasedon thecurrent installedpricesseen inChinaand Indiawith future costs decreasing at a rate of 0.6% pa. Future offshorewind costs are also assumed to decrease at a rate of 0.6% pa starting at$2,900/kW.

18Inparticular:(1)sufficientreal-timemonitoringforbothsupplyanddemandsideoftheindustry,(2)appropriateforecasting for solar and wind and centralised real-time control systems in place to manage a more distributedsupplyside,storagesandflexibledemandresources,and(3)powersystemsdesignedtobeabletomanagevoltage,frequency and stability issues that may arise from having a power system that is dominated by asynchronoustechnologies.19WestandardisedonReal2014USDwithalltechnologiescostsnormalisedtoreflectturnkeycapitalcosts.

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• Largeandsmall-scalehydrocostsareassumedtoincreaseovertimereflectingeasyandmorecost-efficienthydroopportunitiesbeingdeveloped inthefirstinstance. IRENA reported no cost improvements for hydro over the periodfrom 2010 to 2014. Adjustments are made in the case of Lao PDR andMyanmarwheresignificanthydroresourcesaredevelopedintheBAUcase20.

• Solar PV costs are based on the more mature crystalline silicon technologywhich accounts for up to 90% of solar PV installations (IRENA, 2015), andforecasttocontinuetodrop(2.3%pa)albeitataslowerpacethaninpreviousyears.

• Utility scalebattery costsarequotedona$/kWhbasis, andcostprojectionsbasedon a report byDeutscheBank (2015)which took into account severalforecasts from Bloomberg New Energy Finance (BNEF), Energy InformationAdministration(EIA)andNavigant.

• Solarthermal(CSP)capitalcostsareprojectedtofallat2.8%paonthebasisoftheIRENA2015CSPoveralllevelisedcostofelectricityLCOEprojections.Whileglobally there are many CSP installations in place, the technology has nottakenoffand thecostofCSP technologyover thepast5yearshasnotbeenobservedtohavefallenasrapidlyassolarPV.

• BiomasscapitalcostsarebasedoncostsobservedintheAsiaregionwhicharesignificantly less than those observed in OECD countries. Capital costs wereassumed to fall at 0.1% pa. Biogas capital costs were based on anaerobicdigestion(AD)andassumedtodeclineatthesamerateasbiomass.

• Ocean energy (wave and tidal) technologieswere based on learning rates inthe ‘Ocean Energy: Cost of Energy and Cost Reduction Opportunities’ (SIOcean,2013)reportassumingglobalinstallationcapacitiesincreaseto20GWby205021.

• Capital costs are all discounted at 8% pa across all technologies over theprojectlifetimes.Decommissioningcostswerenotfactoredintothestudy.

• Fortechnologiesthatrunonimportedcoalandnaturalgas,wehavefactoredin the additional capital cost of developing import / fuel managementinfrastructureinthemodelling.

For reference,AppendixA tabulatesall technologycostassumptionsused in themodelling.

20Capitalcostsforlargescalehydroprojectsareassumedtoincreaseto$3,000/kWby2050consistentwithhavingthemosteconomicallyfeasiblehydroresourcesdevelopedaheadoflesseconomicallyfeasibleresources.21Waveandtidalcostsareaveraged.

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Figure24 ProjectedCapitalCostsbyTechnologyforBAUandSES

*BatterycostsarequotedonaReal2014USD$/kWhbasis.

Figure25 ProjectedCapitalCostsbyTechnologyforASES

*BatterycostsarequotedonaReal2014USD$/kWhbasis.

4.3 FuelPricingOutlook

IES has developed a global fuel price outlook which was based on short-termcontracts traded on global commodity exchanges before reverting towards long-term global fuel price forecasts based on the IEA’s 2015 World Energy Outlook

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(WEO)450 scenario22anda setof relationshipsbetweendifferent fuels thathavebeeninferredfromhistoricalrelationsbetweendifferenttypesoffuels.Asummaryof the fuel prices expressed on an energy-equivalent and free on board (FOB)basis23($US/MMBtuHHV)ispresentedinFigure26.

The30%fallfrom2014to2015forthevariousfuelswastheresultofacontinuedweakening of global energy demand combined with increased stockpiling ofreserves. Brent crude prices fell from $155/bbl in mid-2014 to $50/bbl in early2015. The Organisation of the Petroleum Exporting Countries (OPEC) at theNovember 2014 meeting did not reduce production causing oil prices to slump.However, fuel prices are then assumed to return from the current low levels toformerlyobservedlevelswithina10yeartimeframebasedonthetimerequiredforthere to be a correction in present oversupply conditions to satisfy softeneddemandforoilandgas24.

To understand the implications of a lower and higher global fuel prices we alsoperformfuelpricesensitivityanalysis.Oneofthescenariosisbasedona50%fuelcost increase25to put the study’s fuel prices in the range of the IEA’s CurrentPolicies scenario26which could be argued to be closer to the fuel pricing outlookthatcouldbeanticipatedinaBAUoutlook,whiletheSESandASESscenarioscouldbe argued to have fuel prices more consistent with the IEA’s 450 scenario. Wediscuss the implications of fuel pricing on theBAU and SESwithin the context ofelectricitypricinginsection9.

For reference, we provide the base fuel pricing outlook for each year that wasusedinthefuelpricemodellinginAppendixB.

22TheIEA’s450scenarioisanenergypathwayconsistentwiththegoaloflimitingglobalincreaseintemperatureto2°C by limiting the concentration of greenhouse gases in the atmosphere to 450 parts per million CO2; furtherinformationavailablehere:https://www.iea.org/media/weowebsite/energymodel/Methodology_450_Scenario.pdf.23For coal that is assumed tobe imported to the region (mostof it)wehave included shippingandporthandlingcosts.24Reference:FactsGlobalEnergy/AustralianInstituteofEnergy,F.Fesharaki,“ANewWorldOilOrderEmergingin2016 and Beyond?”, February 2016, suggest a rebound in prices levels over a 5 to 7 year period as the most“probable”scenario.25Includingbiomassprices.26TheIEA’scurrentpoliciesscenarioassumesnochangesinpolicyfromtheyearofWEOpublication.

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Figure26 IESBaseCaseFuelPriceProjectionsto2050(FOB)

4.4 CambodiaRealGDPGrowthOutlook

RealGrossDomesticProduct(GDP)growthisassumedtomaintaina7%pato2035which is roughly in line with its 10-year historical average growth as Cambodiarepositionsitseconomytowardsindustrialactivitywiththeaimofgraduatingfromits developing country status. It is also consistent with the country’s presentoutlook. Post-2035towards2050,GDPgrowth isassumedtodeclinetowardstheworld average of 1.96%27pa seen in Figure 27. The trend down is assumed toreflect the economic development cycle converging towards those seen indevelopedcountries today. Thisassumption isheldconstantacross theBAU,SESandASESscenarios.

271.96% reflects theprevious5 yearGDPgrowthof the top10GDPcountries in theworldexcludingBrazil, ChinaandRussia.

0

5

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15

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252012

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Price

($Re

al201

4US

D/MMBtu)

CrudeOil DatedBrent FuelOil DieselOil ImportedCoal AsianLNG Uranium

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Figure27 CambodiaGDPProjection

The GDP composition in Cambodia is weighted towards industry in line with thecountry’seconomicdirection.TheindustryshareofGDPinCambodiaisassumedtoincrease from 26% in 2014 to 60% in 2035 and maintain that share to 2050.Agriculture,whichinCambodiaishighlylabourintensivebutwithlowGDPyields,isforecasttoshrinkto15%by2050.TheGDPcompositionispresentedinFigure28.ThisassumptionisheldconstantacrosstheBAU,SESandASESscenarios.

Figure28 CambodiaGDPComposition

0.0%

1.0%

2.0%

3.0%

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6.0%

7.0%

8.0%

2015

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2029

2031

2033

2035

2037

2039

2041

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2049

GDPGrow

th(real)

33.5%

20.0%

15.0%

25.6%

60.0%

60.0%

40.8% 20.0%

25.0%

0%10%20%30%40%50%60%70%80%90%100%

2014 2035 2050

Agriculture Industry Services

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4.5 PopulationGrowth

PopulationwasassumedtogrowinlinewiththeUNMediumFertilityscenarioandisheldconstantacrossallscenarios28.

4.6 CommittedGenerationProjectsinBAU,SESandASESScenarios

Committed generation projects are the ones that are under construction or at astage of development that is sufficiently advanced for decision for the project tocome online to not be reversed. Table 3 lists the set of committed generationprojectsweunderstandforCambodia.Thisisbasedoninformationfromthemostrecent published Power Development Plan for Cambodia combined with IESresearchon the current statusof variousprojects. The table shows theproject’sname,itsunderstoodcapacityandthedateitisexpectedtobecommissionedby.

• RusseiChrum,StungTatayandStungAtayareallhydrounitscommissionedinthelast12months;

• C.I.I.D.GErdosHongjunElectricPowerCounits2-4refertothecommittedcoalunitsinSihanoukvilletobecommissionedbythestartof2018andsuppliedbycoalinthearea;and

• Sihanoukville Imported Coal is the 1,200MW project between the RGC andCheungShengGlobalHoldingsandrunoffimportedcoal.Constructiononunit1 is expected to be complete by 2018 and the unit 4 by 2024. We haveassumed this is a committed project and only units 1 and 2 (600 MWcombined)arecommittedintheSESandASESscenarios.

Table3 Cambodia’sCommittedGenerationProjects

No. Country Capacity(MW)29 Type COD301 RusseiChrumHydroelectric 338 Hydro 2015

2 StungTatayHydroelectric 246 Hydro 2015

3 StungAtayHydroplant 120 Hydro 2015

4 C.I.I.D.GErdosHongjunElectricPowerCo.,Ltd#2&3 240 Coal 2016

5 C.I.I.D.GErdosHongjunElectricPowerCo.,Ltd#4 135 Coal 2018

6 SihanoukvilleImportedCoal#1 300 Coal 2018




28UNDepartmentofEconomicandSocialAffairs,WorldPopulationProspects:The2012Revision.29Capacity figures presented here are pro-rated based on the intended power flows between the countries as oftheyearofcommissioning.30CommercialOperationDate.

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4.7 ImportsandExports

A simplified representation of Cambodia within the GMS and potentialinterconnectionstoothercountries ispresented inFigure2931.Thefigureshowsthe assumed topology of the GMS as well as to countries outside the region,People’s Republic of China (PRC) and Malaysia. Initially, not all transmissionconnections shown in the diagram are in place. However, over the modellingperiod the transmission connections are expanded as required to allow powerexchange between regions tominimise costs and take advantage of diversity indemand and resource availabilities. Each scenario therefore effectively has adifferenttransmissiondevelopmentplan32.

Figure29 RegionalTransmissionSystemModelofGMS

Apart from generation plants in Cambodia, the National Grid gets electricitysupplyfromVietnamat230kV,Thailandat115kVandLaosat22kV33. In2013,

31Currently,there isminimalphysical interconnectionbetweeneachGMScountry. Themodelshowsthetopologythatwehaveusedinthemodellinginordertogainanunderstandingofinterregionalpowerflowsandtodevelopaverysimplehigh-leveltransmissiondevelopmentplan.32Weonlyconsiderahigh-leveltransmissiondevelopmentplanbasedontheregionalmodelshowninordertogaininsightoninterregionalpowerflows.

33SeveralconnectionsfromVietnamandThailandareat22kV.

THAILAND

MYANMAR

CAMBODIA

VIETNAM

LAOPDR

HanoiLuangPrabang

Vientiane

Mandalay

Yangon

HoChiMinhCity

PhnomPenh

Bangkok Angkor

SiemReap

Vientiane

ChiangMaiMM

TH

LAO

CAM

VN-S

VN-C

VN-N

PRC

MAL

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56% of Cambodia’s total electricity demand was met by power transfers fromThailand, LaoPDRandVietnam.Table4 shows the imports splitbyhighvoltage(HV) and medium voltage (MV) transmission lines. The interconnectors are forimportsintoCambodia.TheMMEhasinplaceanagreementwiththeMinistryofIndustry of Vietnam for power purchases from Viet Nam into Cambodia acrossseveral transmission points. Supply from Thailand via the Provincial ElectricityAuthorityofThailand is sold to someof thePECs inareasaround theCambodiaand Thailand border. Imports from Laos are through EDC and supplied to theSteung Treng area. Imports have been reduced substantially since then due tonewhydroplantscomingonlineinCambodia.

Table4 CambodiaElectricityGenerationandImports(2012-13)

SourceofElectricity

EnergyinMillionkWh

Proportionofenergyin%

for20132012 2013

GenerationinCambodia 1,423 1,770 44.7%

ImportfromVietnamatHV 1,220 1,329 32.8%

ImportfromVietnamatMV 341 362 8.9%

ImportfromThailandatHV 392 417 10.3%

ImportfromThailandatMV 143 163 4.0%

ImportfromLaosatMV 9 11 0.3%

Total 3,527 4,052 100.0%

Source:ReportonPowerSectorfortheYear2013,ElectricityAuthorityofCambodia(2014)

4.8 Technical-EconomicPowerSystemModelling

TechnicalandeconomicmodellingoftheGMSwasdoneinthePROPHETelectricityplanningandsimulationmodels.Itdevelopsaleastcostgenerationbasedplanandwas used to simulate the operation of the GMS region as an integrated powersystem.

Abriefoverviewofthevariousaspectsisprovidedbelow:

• PlanningModule: The PlanningModule of Prophet allows for intertemporalconstraintssuchasenergy limits tobepreservedwhensimulatingthepowersystemanddevelopments.Italsodevelopsaleastcostsetofnewentrantstosatisfydemandoverthe35yearmodellinghorizon.

• Transmission:ThepowersystemwasmodelledbasedontheconfigurationasperFigure29withfixed/scheduledflows(redlines)topowersystemsoutsidetheGMSnotbeingexplicitlymodelledwhilepowertransferswithintheGMScountrieswereoptimisedasneededtoallowsupplyanddemandtobalance.Thisisimportantwithrespecttomodellingdiversityindemandinthedifferent

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regionsandgeographical variation ingenerationpatterns fromsupply-drivenrenewableenergy (solarandwind)andseasonalvariationof inflows into thehydrostorages(seeFigure29).

• Economics:Capitalandoperatingcostsrelatingtogenerationplantsaspertheassumptions covered in this report allow the Planning Module to modelgenerationand transmissiondevelopment ina leastcostmanner. On topofthis,resourceconstraintshadtobeformulatedtoreflectactuallimitssuchasthemaximum renewable resource and development rates available to eachcountry.

• Demand:Demand profiles were constructed from energy and peak demandforecasts for electricitybasedon regressionmodels thatweredeveloped foreach sector of the electricity industry (commercial, industrial, residential,agricultural and transport). The monthly and intraday construction of theprofileswereperformed in Prophet basedonhistorical data and/or externaldatasourcesindicatingtheseasonalprofileofdemandforeachcountry.

• Flexibledemand:wasmodelledasaMWandGWh/monthquantitiesthatcanbe scheduled as necessary to reduce system costs. Thismeans that demandtendstobeshiftedfromperiodswhensupplyanddemandwouldotherwisebetighttoothertimes.Thetechnologyforreschedulingdemandwasassumedtobeinplacefrom2020intheSESandASESscenarios.

• Supply: The approach taken for modelling generation supply technologiesvariedaccordingtothetechnologytype.Thisisdiscussedfurtherbelow:- Conventional thermal plant: is modelled as capacity limited plants, with

fueltakeorpaycontractsappliedtogeneratorswhererelevantandotherfuel supply constraints in place also where relevant – for example, gassupply limitsapplied toLNG facilitiesoroffshoregas fields. Examplesofsuchplantsincludecoal,biomass,gas,anddieselgenerators.

- Energylimitedplants:suchaslarge-scalehydroswithreservoirs/storagesandCSPhavemonthlyenergy limitscorresponding toseasonalvariationsin energy inflows. The equivalent capacity factors are based on externalreportsforhydroandresourcedataforCSP(seenextpoint).

- Supply-drivengeneration forms: Seasonalprofiles forwind, solarand runofriverhydroswithoutreservoirsweredevelopedonanhourlybasis.Forwind and solar theywere derived frommonthly resource data collectedfrom a variety of sources including National Aeronautics and SpaceAdministration(NASA),NationalRenewableEnergyLaboratory(NREL)andaccessed via the Solar andWind Energy Resource Atlas (SWERA) Toolkitand International Renewable Energy Agency (IRENA) Global Atlas.Resource amounts were matched against actual generation data forknown plants to develop equivalent monthly capacity factors at varioushigh resource pockets in each country. Several traces were built fromknowngenerationtracestoprovidediversificationbenefits.

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- PumpStorageandbatterystorage:thesearemodelledinasimilarwaytoflexibledemandinthatdemandcanbeshiftedwithacapacityandenergylimit but the scheduled demand is stored for generation later with anappropriateenergyconversionefficiency(pumpedstoragesassumedtobe70%andbatterystoragesystemsat85%).

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5 BusinessasUsualScenario

5.1 BusinessasUsualScenario

TheBAUscenarioassumesindustrydevelopmentsconsistentwiththecurrentstateof planning in Cambodia and reflective of growth rates in electricity demandconsistent with an IES view of base development, existing renewable energytargets, where relevant, aspirational targets for electrification rates, and energyefficiencygainsthatarelargelyconsistentwiththepoliciesseenintheregion.

5.2 DemandGrowth

Cambodia’s on-grid electricity demand (including transmission and distributionlosses34) is plotted in Figure 30. Cambodia’s electricity demand is forecast toincreaseata rateof8.7%paover the35-yearperiod to2050withhighergrowthrates in the earlier years relating to industrial sector growth followed by aslowdownpost-2040astheeconomytrendstowardslong-termglobalGDPgrowthrates.

The industrial sector is forecast to grow the fastest at 11.9% followed by theresidential sector at 6.5%, commercial sector at 5.6%andagriculture at 3.2%perannumastheGDPcompositionshiftstowardscommerce/servicesandindustrywithincreases inresidentialelectricitypercapitaconsumption. Thetransportsector isforecasttohit2.8TWhby2050asthenumberofcarsanduptakeofelectriccarsandmotorbikesincreaseto15%uptake.Cambodiaelectricitydemandisforecasttoreach almost 88 TWh by 2050. Peak demand is plotted below in Figure 31 andshowspeakdemandgrowingat8.5%pareaching13.4GWby2050.Theloadfactoris assumed to trend towards 75% by 2040mainly driven by additional industrialloadsimpactingthedemandbase.

Key drivers for demand growth and the demand projections are summarised inTable5.

34Note that unless otherwise stated, all other demand charts and statistics include transmission and distributionlosses.

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Figure30 CambodiaProjectedElectricityDemand(2015-50,BAU)

Figure31 CambodiaProjectedpeakDemand(BAU)

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Table5 CambodiaDemandandDemandDrivers(BAU)

No. Aspect 2015-30 2030-40 2040-501 DemandGrowth(pa) 14.3% 6.4% 2.3%2 GDPGrowth(Real,pa) 7.0% 6.5% 3.5%3 CentralGridElectrificationRate

(population)68.5% 97.1% 98.7%

4 PopulationGrowth 1.37% 0.94% 0.71%5 PerCapitaConsumption(kWh) 710 1,768 3,1286 ElectricityElasticity* 11.96 2.49 1.777 ElectricityIntensity(kWh/USD) 0.264 0.385 0.520

*Electricityelasticityiscalculatedaselectricitydemandgrowthdividedbythepopulationgrowthoverthesame

period

5.3 InstalledCapacityDevelopment

TheBAUinstalledcapacity(MW)forCambodiaisplottedinFigure32andFigure33bycapacitysharesforselectedyears:2010,2015,2020,2030,2040and2050.Theformershowsinstalledgenerationcapacitybythemaingenerationtypecategories.WeprovidecorrespondingstatisticsinTable6andTable7.Notethattheinstalledcapacitynumbersexcludeprojectsthathavebeendevelopedbutarededicatedtosupplyingpowertoneighbouringcountriesandwhereappropriatethecapacityhasbeende-ratedtoreflectsupplyagreements35.

Installedcapacityin2015increasesfrom2,216MWto18,605MWwithlarge-scalehydrogenerationaccountingfor40%oftotal installedcapacity in2050.Coal-firedcapacityincreasesfrom268MWin2015to5,843MWby2050.Fromaround2020,additional renewable capacity is developed to achieve a 9% generation share(excluding large hydro) by 2050 comprised mostly of solar PV, which has a 17%capacitysharein2050.

35Thisonlyappliestoasmallnumberofexistingandcommittedprojects.

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Figure32 CambodiaInstalledCapacity(BAU,MW)

Figure33 CambodiaInstalledCapacityMixPercentages(BAU,%)

0

2,000

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6,000

8,000

10,000

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16,000

18,000

20,000

2010

2012

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2028

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2050

CapacityM

W

Coal Hydro Gas Wind Diesel/FO Bio Solar

ProjectedBAU

4%12%

35%26% 28% 31%

4%

74%

46%

47% 43% 40%

5% 10% 8%

91%

13%

8%4%

11%17% 15% 17%

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Table6 CambodiaCapacitybyType(BAU,MW)

Resource 2010 2015 2020 2030 2040 2050Coal 13 268 1,243 2,093 4,093 5,843

CCS 0 0 0 0 0 0

Diesel 327 291 291 291 291 291

FuelOil 0 0 0 0 0 0

Gas 0 0 0 375 1,500 1,500

Nuclear 0 0 0 0 0 0

Hydro 13 1,634 1,634 3,738 6,268 7,518

OnshoreWind 0 0 0 50 100 150

OffshoreWind 0 0 0 0 0 0

Biomass 0 23 23 73 123 123

Biogas 0 0 0 0 0 0

Solar 0 0 380 1,380 2,180 3,180

CSP 0 0 0 0 0 0

Battery 0 0 0 0 0 0

HydroROR 0 0 0 0 0 0

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Ocean 0 0 0 0 0 0

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Table7 CambodiaCapacitySharebyType(BAU,%)

Resource 2010 2015 2020 2030 2040 2050Coal 4% 12% 35% 26% 28% 31%CCS 0% 0% 0% 0% 0% 0%Diesel 91% 13% 8% 4% 2% 2%FuelOil 0% 0% 0% 0% 0% 0%Gas 0% 0% 0% 5% 10% 8%Nuclear 0% 0% 0% 0% 0% 0%Hydro 4% 74% 46% 47% 43% 40%OnshoreWind 0% 0% 0% 1% 1% 1%OffshoreWind 0% 0% 0% 0% 0% 0%Biomass 0% 1% 1% 1% 1% 1%Biogas 0% 0% 0% 0% 0% 0%Solar 0% 0% 11% 17% 15% 17%CSP 0% 0% 0% 0% 0% 0%Battery 0% 0% 0% 0% 0% 0%HydroROR 0% 0% 0% 0% 0% 0%Geothermal 0% 0% 0% 0% 0% 0%PumpStorage 0% 0% 0% 0% 0% 0%Ocean 0% 0% 0% 0% 0% 0%Offgrid 0% 0% 0% 0% 0% 0%

FINAL


5.4 ProjectedGenerationMix

Figure34plotsthegenerationmix(onanasgeneratedbasis36)overtimeintheBAUcase and Figure 35 plots the corresponding percentage shares. Coal-firedgenerationinitiallystartsat587GWhandgrowsto43.6TWhby2050.Large-scalehydro initially supplied themajority of Cambodia’s on-grid demand requirementsbutwiththeadditionalcoalandrenewabledevelopments,declinesto35%by2050.Renewabletechnologiesaccountfor9%ofgenerationby2050.

36Unless otherwise stated, all generation charts and statistics in this report are presented on an “as generated”basis,meaningthatgenerationtocovergenerator’sauxiliaryconsumptionaccountedfor.

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Figure34 CambodiaGenerationMix(BAU,GWh)

Figure35 CambodiaGenerationMixPercentages(BAU,%)

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Table8 CambodiaGenerationbyType(BAU,GWh)

Resource 2010 2015 2020 2030 2040 2050Coal 32 587 6,158 15,642 30,056 43,551CCS 0 0 0 0 0 0Diesel 898 0 0 0 0 0FuelOil 0 0 0 0 0 0Gas 0 0 0 657 2,628 2,628Nuclear 0 0 0 0 0 0Hydro 31 4,038 6,295 14,404 24,152 28,968OnshoreWind 0 0 0 137 276 411OffshoreWind 0 0 0 0 0 0Biomass 0 0 0 473 808 806Biogas 0 0 0 0 0 0Solar 0 0 724 2,623 4,157 6,043CSP 0 0 0 0 0 0Battery 0 0 0 0 0 0HydroROR 0 0 0 0 0 0Geothermal 0 0 0 0 0 0PumpStorage 0 0 0 0 0 0Ocean 0 0 0 0 0 0Offgrid 0 0 0 0 0 0

Table9 CambodiaGenerationsharebyType(BAU,%)


FINAL


5.5 GridtoGridPowerFlows

Figure 36 plots the imports and exports in the BAU with the dotted linerepresenting the net interchange. Overall, power exchanges between CambodiaandneighbouringcountriesintheBAUarerelativelylowtoabout2030.From2030Cambodiabeginstoimportincreasinglyfromneighbouringcountriesuptoaround8,000GWhayear.ThisislargelyaconsequenceofCambodiahavingahighshareofhydro in its power system and power flows from neighbouring countries tend tooccurtocomplementseasonalityinhydrologicalinflows.

Figure36 CambodiaImportsandExports(BAU)

5.6 GenerationFleetStructure

Figure 37 shows the installed generation capacity by the main categories ofgeneration:thermal,renewableandlarge-scalehydro.Thisprovidesgreaterinsightinto the basic structure of installed capacity under the BAU, highlighting thatCambodia’s BAU projection is heavily dominated by hydro followed by coal-firedgeneration. Figure 38 shows the on-grid composition of generation by majorcategories: thermal, large hydro and renewable. As could be anticipated,generationcloselyreflectstheBAU’sinstalledcapacitymix.

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Figure37 CambodiaInstalledCapacitybyGenerationType(BAU)

Figure38 CambodiaGenerationMixbyGenerationType(BAU)

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To facilitate comparisonwith the SES andASES, Figure 39plots installed capacitywith capacity being distinguished between the following basic categories: (1)dispatchable capacity, (2) non-dispatchable capacity; and (3) semi-dispatchablecapacity 37 . This provides some insight into the operational flexibility of thegeneration fleet tomatchdemanduncertainty. Thedispatchablecategoryrelatestogenerationthatcanbecontrolledanddispatchedatshortnoticetorampupordown,non-dispatchablemeansthatthegenerationisnotabletorespondreadilytodispatchinstructionswhilethesemi-dispatchablecategorymeansthattheresourcecanrespondwithinlimits,andinparticulariscapableofbeingbackedoffshouldtheneedarise to forexample, avoidoverloading thenetworkor “spill” energy in theeventthatanovergenerationsituationemerges;solarphotovoltaicsandwindfarmswithappropriatelyinstalledcontrolsystemscanbeclassifiedinthiscategory.IntheBAU,thedispatchablepercentagestartsat100%withonlycoalandhydro;then,asrenewablesareaddedtothesystem,itstillremainsabove82%by2050.

Figure39 CambodiaInstalledCapacitybyDispatchStatus(BAU)

5.7 ReserveMarginandGenerationTrends

Figure40plots the reservemarginbasedonnameplatecapacityandannualpeakdemand.TheCambodiareservemarginintheBAUhoversaround40%.

37 Wind and solar are classified as semi-dispatchable, geothermal and hydro run-of-river is classified as non-dispatchableandallothertechnologiesareclassifiedasdispatchable.

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Figure40 CambodiaReserveMargin(BAU)

To obtain a better understanding of the broad mix of generation capacity andgenerationmix, Figure 41 and Figure 42 show shares in installed capacity and ingenerationgroupedbythemaincategories:thermal,largehydro,renewableenergy(RE)andlargehydroplusrenewableenergy.

Figure41 CambodiaCapacitySharesbyGenerationType(BAU)

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Figure42plotsthegenerationsharesbyseveraldifferentcategoriesofgeneration.The thermal generation share increases to over 50% and renewable energyincluding large-scale hydro gradually declines to 35% andmaintains that level asmorerenewableplantsenterthesystem.

Figure42 CambodiaGenerationSharesbyGenerationType(BAU)

5.8 ElectrificationandOffGrid

Cambodia’s grid-based electrification rate for its urban and rural population isassumedtoreachcloseto100%by2030intheBAU.

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6 SustainableEnergySectorScenario

6.1 SustainableEnergySectorScenario

The SES seeks to transition electricity demand towards the best practicebenchmarksofotherdevelopedcountriesintermsofenergyefficiency,maximisethe renewable energy development, cease the development of fossil fuelresources, andmake sustainable and prudent use of undeveloped conventionalhydroresources.Whererelevant,itleveragesadvancesinoff-gridtechnologiestoprovideaccesstoelectricitytoremotecommunities.TheSEStakesadvantageofexisting, technically proven and commercially viable renewable energytechnologies.

6.2 DemandGrowth

Figure43plotsCambodia’sforecastenergyconsumptionfrom2015to2050withthe BAU energy trajectory charted as a comparison. The significant savings aredue to additional energy efficiency assumptions that the various sectors wouldachieveenergyintensitybenchmarksofcomparabledevelopedcountriesinAsia38.TheSESdemandgrowsataslowerrateof7.8%paovertheperiodto2050withthecommercialsectorgrowingat4.5%pa,industrygrowingat11.3%paandtheresidentialsectorgrowingat4.8%pa. Theagriculturalsectorgrowsat2.3%andtheuptakeof electric transport optionsoccur from2025onwards and grows to2,772GWhaccountingfor4.4%oftotaldemandby2050or15%ofallvehiclesandmotorcycles. Anoff-griddemandgrowingupto420GWhin2030thendroppingto 255 GWh by 2050 is driven by granting off-grid electricity access to non-electrified households in the interim as grid-electrification follows. Off griddemand is relatively small as it reflects off-grid per capita demand beingsignificantly lower than grid connected demands and only reflects a portion ofdemandthat issupportedbyoff-gridgenerationasopposedtofullpotentialoff-griddemand.

Figure44plotsthepeakdemandofCambodia.Thefirmbluelinerepresentspeakdemand in Cambodia before any flexible demand side resources have beenscheduled39. Flexibledemand response is “dispatched” in themodel in linewiththe least cost dispatch of all resources in the power system. The dashed linerepresents what peak demand became as a consequence of scheduling (“time-shifting”) commercial, industrial and residential loads tominimise system costs.From2020,theamountofflexibledemandwasassumedtogrowto10%oftotal

38Cambodia’s industrial intensitywastrendedtowardslevelscommensuratewithHongKong(2014)by2050.HongKonghadthelowestintensitybasedontheintensitymetricofabasketofcomparablecountries.39Flexibledemandresponse is “dispatched” in themodel in linewith the leastcostdispatchofall resources. Thesolidlinerepresentspeakdemandasputinthemodel,whilethedashedlinerepresentswhatpeakdemandendedup being as a consequence of shifting demand from one period of time to another. This includes scheduling ofloads associated with battery storage devices and rescheduling (time-shifting) commercial, industrial andresidentialloads.

FINAL


demandacross all sectors by 2050. The load factor associatedwith the SESwasalsoassumedtoreach80%(comparedto75%undertheBAUcase)by2030asafurtherconsequenceofenhanceddemandsidemanagementmeasuresrelativetotheBAU.


Figure43 CambodiaProjectedElectricityDemand(2015-50,SES)

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Figure44 CambodiaProjectedElectricityDemand(SES,GridConnected)

Table10 CambodiaDemandandDemandDrivers(SES)

No. Aspect 2015-30 2030-40 2040-501 DemandGrowth(pa) 12.0% 6.2% 1.8%2 GDPGrowth(Real,pa) 7.0% 6.5% 3.5%3 CentralGridElectrificationRate

(population)54.6% 78.6% 85.6%



period


Figure 45 plots the installed capacity developments under the SES and Figure 46plots the corresponding percentage shares. Table 11 and Table 12 provide thestatisticaldetailsoftheinstalledcapacityandcapacitysharesbytypeincludingtheestimated2010levels.

Committed and existing plants are assumed to come online as per the BAU butaren’treplacedwhenretired.Plannedandproposedthermalandlarge-scalehydrodevelopmentsareassumedtonotoccurandallothergenerationrequirementsareinsteadmetbyrenewabletechnologies.Coalandgasfired-generationintheearlier

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years isverysimilar to theBAUduetocommittedprojects.Over time,hydroandcoal capacity shares drop from 86% in 2015 to 13% in 2050 as more and morerenewablegeneration,predominantlysolarPV,comesonline.

Timing of renewable energy developments are based on the maturity of thetechnology and judgments of when it could be readily deployed in Cambodia.Additionaldemand in the SES ispredominantlymetby renewableswith18.7GWrequired to meet 2050 electricity demand from a current capacity base around1,656 MW (large-scale and grid connected). Solar PV is to account for 9 GW,biomass2GW,CSP1.5GW,andwindcapacityof650MWby2050.Batterystoragewith an equivalent capability of 3 GW is developed to support the significantamountofsolarPVandoff-peakload.Smallamountsofrun-of-riverhydroarealsodevelopedinthelaterstages.Thereis340MWofoff-gridcapacityinstalledintheSES.

FINAL


Figure45 CambodiaInstalledCapacitybyType(SES,MW)

Figure46 CambodiaCapacityShares(SES,%)

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Table11 CambodiaCapacitybyType(SES,MW)

Resource 2010 2015 2020 2030 2040 2050Coal 13 268 1,243 1,243 1,243 975CCS 0 0 0 0 0 0Diesel 327 291 291 291 0 0FuelOil 0 0 0 0 0 0Gas 0 0 0 0 0 0Nuclear 0 0 0 0 0 0Hydro 13 1,634 1,634 1,634 1,634 1,634OnshoreWind 0 0 0 150 450 650OffshoreWind 0 0 0 0 0 0Biomass 0 23 73 423 1,023 1,823Biogas 0 0 0 0 0 0Solar 0 0 656 2,856 6,256 9,256CSP 0 0 0 450 1,200 1,500Battery 0 0 0 0 1,300 3,191HydroROR 0 0 0 0 300 600Geothermal 0 0 0 0 0 0PumpStorage 0 0 0 0 0 0Ocean 0 0 0 0 0 0Offgrid 0 0 20 323 327 340

Table12 CambodiaCapacitySharebyType(SES,%)


FINAL



GridgenerationisplottedinFigure47andFigure4840.ThecorrespondingstatisticsforsnapshotyearsareprovidedinTable14andTable15.

Cambodia’sgenerationmixintheearlieryearsto2020issimilartotheBAUcaseascommittednewentry is commissioned. Thermal and largehydroprojects outsidewhat is deemedexistingor committed (with theexceptionof somehydro) is notdeveloped and renewable technology is used tomeet the remaining incrementaldemand.

Coal and large scale hydro decline to a 13% and 12% generation share by 2050whereas solar PVaccounts for thehighest generation shareof 17.6 TWhor 33%,followed by biomass and biogas at 21% then CSP at a combined 13%. In total,Cambodia generatesmore than 53 TWh against a demand base of 62.5 TWh by2050 with the deficit power being imported from neighbouring countries.Cambodia’snet importer status is drivenby the limitedamountofnon-fossil fueland large hydro based generation resources available to the country, relative toother neighbouring countries. Off grid solutions are deployed, but serve only asmallfractionofthetotaldemand.

40Batterystorageisnotincludedasstoragetechnologiesaregenerationneutral.

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Figure47 CambodiaGenerationMix(SES,GWh)

Figure48 CambodiaGenerationShare(SES,%)

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Table13 CambodiaGenerationbyFuel(SES,GWh)

Resource 2010 2015 2020 2030 2040 2050Coal 32 587 3,686 10,182 9,510 6,847CCS 0 0 0 0 0 0Diesel 898 0 0 0 0 0FuelOil 0 0 0 0 0 0Gas 0 0 0 0 0 0Nuclear 0 0 0 0 0 0Hydro 31 4,038 6,413 6,633 6,727 6,295OnshoreWind 0 0 0 412 1,242 1,780OffshoreWind 0 0 0 0 0 0Biomass 0 0 0 2,961 7,185 11,250Biogas 0 0 0 0 0 0Solar 0 0 1,250 5,427 11,930 17,590CSP 0 0 0 1,634 5,544 7,067Battery 0 0 0 0 0 0HydroROR 0 0 0 0 1,163 2,312Geothermal 0 0 0 0 0 0PumpStorage 0 0 0 0 0 0Ocean 0 0 0 0 0 0Offgrid 0 0 26 417 238 255

Table14 CambodiaGenerationSharebyFuel(SES,%)


FINAL



Figure49plotstheimportsandexportsintheSESwiththedottedlinerepresentingthenetinterchange.CambodiaimportsandexportsmoreintheSESthantheBAUduetooptimisinggenerationacrosstheregionratherthanonacountrybycountrybasis.CambodiamainlyexportsandimportsintosouthernVietNam.Cambodiaisanet importer of power of up to 10 TWh in order to exploit the diversity in theavailabilityofrenewableenergypotentialthroughouttheregionasawhole.

Figure49 CambodiaImportsandExports(SES)


AsfortheBAU,togaininsightintothenatureofthemixofgenerationtechnologiesdeployedintheSES,wepresentanumberofadditionalcharts.Figure50andFigure51showCambodia’sinstalledcapacityandgenerationbytypefortheSES–thisisheavilybiasedtowardsrenewablegenerationforms.

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Figure50 CambodiaInstalledCapacitybyGenerationType(SES)

Figure51 CambodiaGenerationMixbyGenerationType(SES)

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Figure 52, shows the dispatchable, semi-dispatchable and non-dispatchablecomponents of installed capacity and it can be seen that semi-dispatchableincreases toaround59%of thetotalsystemcapacitycomparedtoaround18% inthe BAU by 2050. Based on operational simulations with this resource mix, itappearstobeoperationallyfeasible,andgenerationformsthatprovidestorageandflexibility in the demand side play important roles. It is clear that short-termrenewableenergysolarandwindforecastingsystemswillbeimportant,aswillreal-timeupdatesondemandthatcanbecontrolled.Furthermore,controlsystemsthatcanallowthedispatchofflexibleresourcesonbothsupplyanddemandsidesoftheindustryandacrosstheregionwillberequired.

Figure52 CambodiaInstalledCapacitybyDispatchStatus(SES)


Figure 53 plots the reserve margin under the SES. Figure 54 and Figure 55,respectively, show the installed capacity mix and generation mix for differentcategoriesofgenerationinthepowersystem.ThereservemarginisrelativehighinthebeginningduetothesizeofcommittedprojectsrelativetoCambodia’senergydemand, and declines as the projects are scheduled onlywhen demand calls foradditionalgenerationcapacity.ThereservemarginisnaturallyhigherintheSESduetothelowercapacityfactorofrenewableenergytechnologieslikesolarPVorwindcompared to conventional technologies. Renewable technologies generally have

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muchlowercapacityfactorsandrequiremorecapacitytomeetthesameamountofenergyproducedfromthermal-basedtechnologies41.

Renewable generation including large-scale hydro reaches 87% or 75% withoutlarge-scalehydro.

Figure53 CambodiaReserveMargin(SES)

41Conventional reserve margin measures, based on peak demand and capacity alone are generally not a usefulmeasures for systems with energy limited resources, high levels of renewable energy, battery storages and highlevels of controllable demand side resources, as compared to power systems that are dominated by thermalgeneratorsandinelasticdemand.

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Figure54 CambodiaInstalledCapacitySharesforSESbyGenerationType

Figure55 CambodiaGenerationSharesforSESbyGenerationType

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6.8 ElectrificationandOffGrid

Cambodia in the SES is assumed to have slightly slower grid electrification ratesthan the BAU with off-grid demand met by off-grid technologies based onjudgments aroundwhen the technology could be deployed and time required toestablish the human capacity to maintain off-grid (solar PV and battery storage)systems ahead of the transmission network being gradually extended tointerconnect all remote communities. As existing off-grid supplied regions areconnected from 2030, existing mini grids are assumed to be integrated into themaingrid.By2030,theSEShassimilarelectricityaccessratesastheBAU.

Figure 57 shows the percentage of total demand divided into grid and off-gridpotential demand. Off grid potential demand is demand that is not yet beingsatisfiedeitherbygridconnectionoranoff-gridpowersupplysolution42. In2015,85%of the total is grid-connecteddemand (red) and the rest is potential off-griddemand (blue)43. Over time, grid based demand increases due to progress withelectrificationwhilepotentialoff-griddemand is suppliedby solarPVandbatterystorage technologies. The black line represents the combined percentage ofdemand that has access to electricity either via grid connectionor via anoff-gridsolution. The cost of off-grid supply based on solar PV and battery storage isassumedtocost$171/MWhdeclining to$101/MWhby2030, reaching$74/MWhby205044.

Figure56 OffgridDemand(SES)

42It is anestimateof theamountofdemand thatwouldbepresent if thehouseholdwaseither connected to thegridorsuppliedbyanoff-gridsolution.4354%ofthepopulationiscurrentlyconnectedtothegridrepresenting85%oftotalelectricitydemand.Theother15% of total electricity demand can be attributed to off-grid potential demand that is currently not connected(eitherviathemaingridofoff-gridtechnologies)44Based on technology cost assumptions, 25%of solar PV generation stored for off-peak use and an 85%batteryefficiency.

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Figure57 OffgridPotentialDemandShare(SES)

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7 AdvancedSustainableEnergySectorScenario

7.1 AdvancedSustainableEnergySectorScenario

TheASESassumesthatthepowersectorisabletomorerapidlytransitiontowardsa 100% renewable energy technologymix under an assumption that renewableenergy is deployed more than in the SES scenario with renewable energytechnologycostsdecliningmorerapidlycomparedtoBAUandSESscenarios.

7.2 DemandGrowth

Figure58plotsCambodia’sforecastenergyconsumptionfrom2015to2050withtheBAUandSESenergytrajectorychartedwithadashedlineforcomparison.TheSES energy savings against the BAU are due to allowing Cambodia’s energydemand to transition towards energy intensity benchmarks of comparabledevelopedcountriesinAsia.TheASESappliesanadditional10%energyefficiencyagainsttheSESdemandwhichispartiallyoffsetwithadditionalelectrictransportdemandsassociatedwithhigheruptakeratesof30%by2050.

TheASESdemandgrowsataslowerrateof7.5%paovertheperiodfrom2015to2050with the commercial sector at 4.2% pa, industry growing at 10.9% pa andresidential sectorgrowingat3.8%pa. Demand fromthe transport sector in theASESisdoubledandgrowsto5,544GWhor10%oftotaldemandby2050.Offgriddemandgrowstoalmost2GWby2050.

Figure59plotsthepeakdemandofCambodia.Thefirmbluelinerepresentspeakdemand inCambodiawithoutanydemandsidemanagement impacts45.Demandside management reflects demand responses to tight supply and networkconditions. This is assumed to grow to asmuch as 17.5% of demand across allsectorsby2050,representingtheportionof flexibledemandthat isnotthroughtechnologymeans(i.e.batterystorage).TheloadfactorassociatedwiththeASESisalsoassumedtoreach80%(comparedto75%undertheBAUcase)by2030asafurtherconsequenceofenhanceddemandsidemanagementmeasuresrelativetotheBAU.


45Flexibledemandresponse is “dispatched” in themodel in linewith the leastcostdispatchofall resources. Thesolidlinerepresentspeakdemandasputinthemodel,whilethedashedlinerepresentswhatpeakdemandendedup being as a consequence of shifting demand from one period of time to another. This includes scheduling ofloads associated with battery storage devices and rescheduling (time-shifting) commercial, industrial andresidentialloads.

FINAL


Figure58 CambodiaProjectedElectricityDemand(2015-50,ASES)

Figure59 CambodiaProjectedElectricityDemand(ASES,Grid)

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Table15 CambodiaDemandandDemandDrivers(ASES)

No. Aspect 2015-30 2030-40 2040-501 DemandGrowth(pa) 10.9% 6.2% 2.2%2 GDPGrowth(Real,pa) 7.0% 6.5% 3.5%3 CentralGridelectrificationRate

(population)45.4% 54.8% 55.7%



period


Figure60plots the installedcapacitydevelopmentsunder theASESandFigure61plots the corresponding percentage shares. Table 16 and Table 17 provide thestatisticaldetailsoftheinstalledcapacityandcapacitysharesbytypeincludingthe2010levels.

The ASES retires coal plants earlier than in the SES under a 100% renewablegenerationtargetacrosstheregion.Totalinstalledcapacityincreasestoalmost24GW or 14% higher than in the SES as more conventional technologies aresubstituted out, with solar PV accounting for 45% of total installed capacity, oralmost 11 GW, supported by 5 GW equivalent of battery storage for generationdeferral.Onshorewindaccountsfor650MWor3%andlargescalehydroremainsat1,634MWaspertheSES.Offgridcapacityincreasesto1.5GWtosupport100%electricity access from 2033which closely follows electricity access46rates in theBAU.

46Electricity accessmeans access to electricity via grid connectionor via anoff-grid solution (mini-grid, solar andbatterysystemetc.)

FINAL


Figure60 CambodiaInstalledCapacitybyType(ASES)

Figure61 CambodiaCapacityShares(ASES)

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Table16 CambodiaCapacitybyType(ASES,MW)

Resource 2010 2015 2020 2030 2040 2050Coal 13 268 508 1,243 975 0CCS 0 0 0 0 0 0Diesel 327 291 291 291 0 0FuelOil 0 0 0 0 0 0Gas 0 0 0 0 0 0Nuclear 0 0 0 0 0 0Hydro 13 1,634 1,634 1,634 1,634 1,634OnshoreWind 0 0 0 150 450 650OffshoreWind 0 0 0 0 0 0Biomass 0 23 73 423 1,223 2,123Biogas 0 0 0 0 0 0Solar 0 0 656 3,456 8,056 10,756CSP 0 0 0 450 1,200 1,500Battery 0 0 0 123 3,346 5,130HydroROR 0 0 0 0 300 600Geothermal 0 0 0 0 0 0PumpStorage 0 0 0 0 0 0Ocean 0 0 0 0 0 0Offgrid 0 0 23 593 965 1,462

Table17 CambodiaCapacitySharebyFuel(ASES,%)


FINAL



ASESgridgenerationisplottedinFigure62andgenerationsharesinFigure63.Thecorrespondingstatistics forsnapshotyearsareprovided inTable18andTable19.Cambodia’sgenerationmixintheearlieryearsto2020issimilartotheBAUcaseascommitted new generation projects are commissioned and this has largely beenkept thesame. Of therenewable technologies,by2050,solarPVcontributes thehighestgenerationshareof20.4TWhor41%closelyfollowedbybiomassat20%.By2030,morethan75%ofallgenerationisfromrenewablesources(includeslarge-scalehydro)andmovestowards100%by2050.

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Figure62 CambodiaGenerationMix(ASES,GWh)

Figure63 CambodiaGenerationMix(ASES,%)

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Table18 CambodiaGenerationbyType(ASES,GWh)

Resource 2010 2015 2020 2030 2040 2050Coal 32 587 2,722 5,522 4,459 0CCS 0 0 0 0 0 0Diesel 898 0 0 0 0 0FuelOil 0 0 0 0 0 0Gas 0 0 0 0 0 0Nuclear 0 0 0 0 0 0Hydro 31 4,038 5,632 6,018 5,925 6,485OnshoreWind 0 0 0 412 1,242 1,780OffshoreWind 0 0 0 0 0 0Biomass 0 0 0 2,961 8,532 9,954Biogas 0 0 0 0 0 0Solar 0 0 1,250 6,568 15,363 20,440CSP 0 0 0 1,634 5,544 7,067Battery 0 0 0 0 0 0HydroROR 0 0 0 0 1,163 2,312Geothermal 0 0 0 0 0 0PumpStorage 0 0 0 0 0 0Ocean 0 0 0 0 0 0Offgrid 0 0 30 765 1,246 1,887

Table19 CambodiaGenerationSharebyType(ASES,%)


FINAL



Figure 64 plots the imports and exports in the ASES with the dotted linerepresentingthenetinterchange.ThepowerflowsintheASESisgenerallysmallerin magnitude compared to the SES as there are more exports around 2025 intoThailand, a consequence of there being lower demand. Compared to the BAU,powerimportsandexportsaredifferentasaconsequenceofexploitingrenewableenergypotential in the region, asopposed to the conventional generationmixoftheBAU.

Figure64 CambodiaImportsandExports(ASES)


Togain insight into thenatureof themixof generation technologiesdeployed intheASES,wepresentanumberofadditionalcharts.Figure65andFigure66showCambodia’sinstalledcapacitybygenerationtypefortheASES–thisisclearlybiasedtowards renewable generation forms as there are no additional thermal projectsbuiltafter2015.ForCambodia,asmallamountofnon-renewableenergycontinuestofeatureinthegenerationmixintheearlieryearsbeforedecliningto0by2050.

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Figure65 CambodiaInstalledCapacitybyType(ASES)

Figure66 CambodiaGenerationMixbyType(ASES)

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Figure 67, shows the dispatchable, semi-dispatchable and non-dispatchablecomponents of installed capacity and it can be seen that semi-dispatchableincreases toaround64%of thetotalsystemcapacitycomparedtoaround18% inthe BAU by 2050. Based on operational simulations with this resource mix, itappears to be operationally feasible, and the reliance on generation forms thatprovidestorageandflexibility in thedemandsideplay importantroles. It isclearthat short-term renewable energy solar and wind forecasting systems will beimportant, as will real-time updates on demand that can be controlled.Furthermore, control systems that canallow thedispatchof flexible resourcesonbothsupplyanddemandsidesoftheindustrywillberequired.

Figure67 CambodiaInstalledCapacitybyDispatchStatus(ASES)


Figure 68 plots the reserve margin under the ASES. Figure 69 and Figure 70,respectively, show the installed capacity mix and generation mix for differentcategoriesofgenerationinthepowersystem.TheASESreservemarginstaysabove100% throughout most of the modelling period. It is worth noting conventionalreserve margin measures are generally not suited to measuring high renewableenergy systems in the same context used for thermal-based systems. Renewabletechnologiesgenerallyhavemuchlowercapacityfactorsandrequiremorecapacitytomeetthesameamountofenergyproducedfromthermal-basedtechnologies.

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Figure68 CambodiaReserveMargin(ASES)

Figure69 CambodiaInstalledCapacitySharesforASESbyGenerationType

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Figure70 CambodiaGenerationSharesforASESbyGenerationType

7.8 ElectrificationandOff-Grid

TheASES isassumedtohaveslowercentralgridelectrificationratescomparedtotheSESandBAUwithcentralgridelectrificationofhouseholdsceasingasbatterystorageandsolarPVbasedgridsbecomecheaperthanthegridcostofpowerwhichoccurs from 203047. Demands continue to grow as off-grid per capita demandincreaseswith thestateof theeconomy.By2030, theASEShas similarelectricityaccessratesastheBAU.

Figure71plots the total off-gridpotential demandand theportionof this that issuppliedviaoff-gridtechnologies.Thetotaloff-griddemandstaysrelativelyflatto2025asgridelectrificationreducestheamountofpotentialoff-griddemand.From2030, the levelised cost of off-grid generation starts to decrease to levelscommensurate with grid generation costs and grid electrification is entirelyreplacedbyoff-gridsupply.Overtime,off-griddemandandsupplyincreaseduetogrowing residential per capita demands. Off-grid supply never reaches off-gridpotentialdemandasweassumeasmallpercentageofpopulationthatwillnothaveaccesstoelectricity.

Figure72showsthepercentageofdemandsplitintogridandtotaloff-gridpotentialdemand.In2015,85%oftotalgridandpotentialoff-griddemandisgrid-based(red)

47GridelectrificationintheSESandASESisnotasstrongaprioritythanintheBAUgiventhenotionofinterimandpermanent(respectively)off-gridsupply.

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48.Over time, gridbaseddemand increasesdue toelectrificationefforts, andoff-griddemandissuppliedbysolarPVandbatterystoragetechnologies.Theblacklinerepresents thecombinedpercentageofdemandthat ismet throughgridandoff-gridmeans. The cost of off-grid supply basedon solar PV andbattery storage isassumedtocost$171/MWhdecliningto$87/MWhby2030,reaching$63/MWhby205049.

Figure71 OffgridDemand(ASES)

4854%ofthepopulationiscurrentlyconnectedtothegridrepresenting85%oftotalelectricitydemand.Theother15% of total electricity demand can be attributed to off-grid potential demand that is currently not connected(eitherviathemaingridofoff-gridtechnologies).49Based on technology cost assumptions, 25%of solar PV generation stored for off-peak use and an 85%batteryefficiency.

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FINAL


Figure72 OffgridPotentialDemandShare(ASES)

FINAL


8 AnalysisofScenariosSections 5, 6 and 7 presented projections of capacity and generationmix for theBAU,SESandASESscenariosrespectively.InordertounderstandtheimplicationsoftheSESandASESovertheBAU,wehaveformulatedasetofmetricstoassistintheircomparison.

Theseareasfollows:

• Overallenergyconsumptionperyear;

• Peakelectricitydemandperyear;

• Renewableenergypercentagecomparisons;

• Carbonemissionsmeasures;

• Hydropowerdevelopments;

• Analysisofbioenergysituation;

• Anumberofsimplesecurityofsupplymeasures;and

• Interregionalpowerflows.

8.1 EnergyandPeakDemand

Figure 73 compares the total electricity consumption of the BAU, SES and ASESwithFigure74plottingthepercentagereductioninelectricityconsumptionoftheSESrelativetotheBAUandASESrelativetotheBAU.Ascanbeseentheenergyconsumption of the SES is lower than the BAU with the main driver beingenhancementsinenergyefficiencyintheSES.ThereductioninenergyintheASESispartiallyoffsetbythedoublingofelectrictransportdemand.

Figure73 CambodiaElectricityDemandComparison

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Figure74 CambodiaPercentageReductioninElectricityDemand

Figure75comparespeakloadandshowsthesamerelativities.Thisisattributabletoimprovementsinloadfactor(80%inSESandASES).OntopofthistheSESandASES has contributions from flexible and controllable demand that allowsreductionsinpeakdemandconsumption(notshownhere).

Figure75 CambodiaPeakDemandComparison

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Figure76 CambodiaElectricityAccessRateComparison

Figure76aboveplotstheaccessratesinthethreescenariosandshowalthoughtheBAUhasoverallhigheraccessratesbymeansofelectrificationleadingupto2030,theSESandASESachievessimilaraccesstoelectricityratesviaoff-gridtechnologieswithin a few years beyond 2030. By 2030 the BAU has achieved some 99% viacentralgridconnectionwhereastheSESachieves96%accessandtheASESachieves94% with the deployment of off-grid solutions. The SES reaches full electricityaccessby2032andASESby2033.

8.2 EnergyIntensity

Figure 77 plots the per capita electricity consumption per annum across thescenarios. Electricity consumption includes all electricity consumption across thecountry. In the BAU, per capita consumption levels increase at a rate of 4.5% toreach4,066kWhpawhichissignificantlylessthanHongKongistoday50.IntheASESand SES, it increases more slowly at 3.6% pa and 3.9% pa, respectively, due tohigherenergyefficiencysavings.ItshouldbenotedthatGDPgrowthassumptionsremainconstantacrossallscenarioswiththedifferenceintheASESandSESbeingmeasurestakentoimproveenergyefficiency.

50ArguablyefficiencylevelsinHongKongcouldbeexpectedtoimproveagainstcurrentlevels.

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Figure77 CambodiaPerCapitaConsumptionComparison(kWhpa)

8.3 GenerationMixComparison

Figure78andFigure79below shows the renewable capacity andgenerationmixbetween the two scenarios. Renewable capacity (including large-scale hydro)reaches59% in theBAU,which isequivalent toa43%generationsharedrivenbysignificant large-hydro exploitation. The SES and ASES reaches 92% and 98%renewablecapacityrespectivelyby2050.

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FINAL


Figure78 CambodiaRenewableInstalledCapacityMix

Figure79 CambodiaRenewableGenerationMixComparison

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FINAL


8.4 CarbonEmissions

Figure80andFigure81showthecarbonintensityofCambodia’spowersystemandthetotalperannumcarbonemissionsrespectively.Theintensitytrajectorygoesupin theBAUasmorecoalenters thescenario reaching0.46 t-CO2e/MWhby2050.The SES gets to 0.11t-CO2e/MWh by 2050 and the ASES is almost 100% carbonemissionsfree51. Intermsoftotalcarbonemissions,theshifttowardstheSESandASESsavesupto32and38mt-CO2e,respectively,ortheequivalenttoan85%and99%savingfromtheBAU.

Figure80 CambodiaCarbonIntensityComparison

Figure81 CambodiaCarbonEmissionsComparison

51Weassumezeroemissionsfromhydroandbio-generation.

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FINAL


8.5 HydroPowerDevelopments

Table 20 lists the hydro generation projects and commissioning year under thethree scenarios. Hydro projects are assumed to be refurbished as required tomaintain operations throughout the modelling horizon. As discussed earlier,projectssuchasLowerSrePok2locatedinothercountriesbutdedicatedtoexportsare included as projects in the export markets (with capacities adjustedaccordingly). Compared to theBAU, theSESandASESmake thedevelopmentof2,885MWofhydroinCambodiaunnecessary.

Table20 HydroPowerProjectDevelopmentsinBAU,SESandASES

HydroProjectInstalledCapacity(MW)

YearCommissionedbyScenario

BAU SES ASESRusseiChrumHydroelectric 338 2015 2015 2015StungTatayHydroelectric 246 2015 2015 2015StungAtayHydroplant 120 2015 2015 2015HydroPowerLowerSesan2Co.,Ltd 400 2023

ProjectsnotdevelopedintheSESandASES

StungCheayArengHydroelectricProject

108 2025

SesanHydro 400 2025PrekLaangHydroelectricProject 90 2026StungSenHydro 40 2026LowerSrePok2 67 2027StungTreng 1000 2027SamborDam 780 2037

8.6 AnalysisofBioenergy

Figure 82 shows aprojectionof thebiomass available for theGMS (converted toGWh)andthetotalbiomassgenerationforeachscenariofortheGMS.Theshadedpink area represents the projected total technical biomass resource availability52while the solid lines show the biomass consumption used by each scenario. Theprojectedavailablebiomasswasbasedonforecastgrowthratesintheagriculturalsectors of each country. It was assumed that no more than 75% of the totalprojected available biomass resourcewas used. The remainder of the bioenergyrequirements for each scenario was then assumed to be satisfied by biogastechnologies.

Figure 83 shows a similar chart to Figure 82 for the GMS except for biogas. Thegreenshadedareainthischartrepresentstheamountofbiogasavailable(againin

52ProjectionsofbiomassavailabilitydevelopedbyIESbasedonbaselinesestablishedfrominformationonbiomassandbiogaspotentialreportedin‘RenewableEnergyDevelopmentsandPotentialintheGreaterMekongSubregion’,ADB(2015)report.

FINAL


unitsofGWh)andthecorrespondinggenerationfrombiogasineachscenario.ThisshowsthattheSESandASESaredependentonbiogaswhiletheBAUisassumedtonot deploy this technology. Based on the projections the biomass and biogasresourcesavailabletotheregioncanbeseentobesufficienttosupporttheamountofbiomassandbiogasgenerationto2050.

Figure82 ProjectedBiomassAvailabilityandConsumptionintheBAU,SESandASESscenariosfortheGMSasawhole

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Figure83 ProjectedGMSBiogasRequirements

8.7 SecurityofSupplyIndicators

Figure84plotstheenergyreservemargincalculatedasthedifferencebetweenthemaximumannualpotentialproductionfromallplantsaccountingforenergy limitsandtheannualelectricitydemandsinpercentageterms.TheenergyreservemargininCambodiastartsouthighwiththecommittedgenerationprojectsthenincreasesin2027duetoadditional imports intoCambodiabeforedecliningtowards20%asdemand grows. As noted previously, an energy reservemargin ismore suited tomeasuringsystemsthatarerenewables-based.

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Figure84 CambodiaSecurityofSupplyMeasure:EnergyReserve

Figure85chartsthepercentageofelectricitygeneratedusingdomesticresources.Thepercentagegeneratedusingdomesticfuelsourcesstartsat83%anddecreasesovertime intheBAUdueto itsrelianceoncoal.Reducedcoal imports inSESandASES increaseenergy securityand somenetelectricity import causes the securityindexintheASESandSEStohoveraround90%and80%respectively.

Figure86plotsthehighestshareofgenerationfromaparticularfuelsource.IntheBAU, thedominance isheldby large-scalehydrogeneration in the first fewyearsthen takenoverbynewcoal firedgeneration throughout the restof thehorizon.TheSESisdominatedbylarge-scalehydroupuntil2020thencoalbeforesolarPVandotherrenewablescapturegenerationshareofover40%around2030increasinguntil 2050. The ASES follows the same trend as the SESwith less coal andmorerenewable generation. Across all scenarios, it is clear that the SES and ASESgenerationmixesarealotmorediversifiedthanintheBAU.

Figure 87 plots the dependence on coal in all scenarios. The AES and SEStrajectoriesdeclineasexpectedwhereastheBAUincreasestoover50%by2050as5,843MWof coal projectsdedicated toCambodia is brought into themix tomeetincreasingdemands.

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Figure85 CambodiaSecurityofSupplyMeasure:PercentageofElectricityGeneratedbyDomesticResources

Figure86 CambodiaSecurityofSupplyMeasure:MaximumDominanceofaTechnologyinGenerationMix

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Figure87 CambodiaSecurityofSupplyMeasure:CoalShare

8.8 InterregionalPowerFlows

Figure88comparesthenetflowsinandoutofCambodia.ItisclearCambodiaisanet electricity importer, but imports in SES and ASES are limited to 10-20%depending on the scenario. Cambodia primarily imports from Thailand but alsoimportssmalleramountsfromVietNamthroughitsinterconnectionsintothesouthregionofVietNam.

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Figure88 CambodiaImportsandExports(GWh)

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9 EconomicImplicationsIn this sectionwe consider the economic implications of the three scenarios andexamineinparticular:(1)thelevelisedcostofelectricity(LCOE)generationfortheentire system, (2) investment costs, (3) total operating and capital expenditureincluding the cost of energy efficiency, (4) additional transmission costs from theBAU(sinceSESandASESincludemoreoff-griddevelopments),(5)off-gridcostsand(6) implicationsforjobcreation. Itshouldbenotedthattheanalysispresentedinthis section isdone for thepurposeof comparison, and that thepricesand costsprovided are dependent on the fuel price projections and technology costassumptionsthatwereused inthethreescenarios (seeAppendixAandAppendixB).ForjobscreationthemethodologydescribedinAppendixCwasused.

9.1 OverallLevelisedCostofElectricity(LCOE)

ThecomparisonoftheLCOE(onlyincludesgenerationcosts)isshowninFigure89.TheLCOEfortheBAUstartstodecreaseasmorelarge-scalehydroisdeployedthengradually increases as coal inputs start to rise, and large-scale hydro capitalexpenditure(CAPEX) increasesasresourceexploitationbecomesmoredifficult.By2050 the BAU trends towards $77/MWh. The ASES and SES initially decline thenincreases together to approximately $90/MWh by 2050 driven by investment inmoreexpensiverenewableenergytechnologies(batterystoragesdeployedfurtherfrom the grid, CSP and bio generation technologies) relative to conventional coaland large-scale hydro. This LCOE analysis only compares central grid connectedelectricityproductionanditdoesnotincludethecostofexternalities53.

53A detailed study on the cost of externalities is presented in the following reference: Buonocore, J.,Luckow, P.,Norris,G., Spengler, J., Biewald,B.,Fisher, J.,and Levy, J.(2016) ‘Healthand climatebenefitsofdifferentenergy-efficiencyandrenewableenergychoices’,NatureClimateChange,6,pp.100–105.

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Figure89 CambodiaLCOEforGeneration

9.2 LCOEComposition

Highintegrationlevelsofrenewableenergyallowfortheavoidanceoffuelcosts.InordertounderstandthestructureoftheLCOEfromtheprevioussectionweprovidedecomposedversionsof theLCOE inFigure90 for theBAU,Figure91 for theSESandFigure92fortheASES.Thisrevealsanimportanttrendinthestructureofthecostofelectricity:athermal-dominatedsystemhasahighportionofitscostsasfuelcosts while a renewable energy dominated power system ismore heavily biasedtowardscapitalcosts.

The capital costs in the BAU increases slightly from 2030 because of increasinglarge-hydroCAPEXandfuelcostsincreaseascoalshareofgenerationincreasesovertime.TheSESandASEScoststructuresareverysimilarduetothesimilargenerationdevelopments with the SES – the CAPEX in both gradually increases with theinvestmentintobatterystorage,biogasandCSPtechnology.

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Figure90 CambodiaLCOECompositioninBAU

Figure91 CambodiaLCOECompositioninSES

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Figure92 CambodiaLCOECompositioninASES

9.3 OffgridCostComparison

Figure 93 below compares the cost of providing 100% electricity access by 2050across the three scenarios to households who currently do not have access toelectricity.TheBAUisassumedtoachievecloseto100%electrificationby2030andthecosts relatetocentralgridelectrificationandgridgenerationcosts tosupporttheelectrifiedloads54.TheASEShasaslowercentralgridelectrificationratewhichceasesaround2030whenoff-gridsolarandbatterystoragebecomeseconomicandisusedtosupplyelectricitytoalloff-griddemand.TheASESlinecomprisesmainlyinvestmentcostsrelatingtoresidentialsolarPVandbatterystorageandasmallergrid electrification cost component. The SES assumes a 100% central gridelectrification target albeit slower than in theBAUwithoff-griddemand suppliedwith solar PV and battery technology in the interim. The differences are mainlydrivenbythedifferenceinelectricitydemandspercapitabetweenthescenarios.

54 Myanmar National Electrification Program Roadmap and Investment Prospectus, Castalia Strategic Advisors(2014). Electrification costs were based on Myanmar’s cost estimates of 100% electrification (7.2 millionhouseholdsby2030)costing$5.8billionandpro-ratedbasedonCambodiapopulationfigures.

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Figure93 GridElectrificationandoff-gridCosts

9.4 CumulativeCapitalInvestment

ThefollowingsectiondetailstheinvestmentcostsofmeetingdemandinCambodiataking into account exports and imports. Figure 94 shows the cumulativeinvestmentingenerationCAPEX,gridelectrification,off-gridinvestmentandenergyefficiency inmillionsofReal 2014USD. Figure94 shows theBAU requiring theleast capital investment by the end of themodelling horizon primarily driven bycheaper thermal generation. The SES and ASES includes investment in energyefficiencymeasuresandgreater investments inCSP,biogasandbatterystoragetodefergenerationpost-2035withtheinvestmentinbothcaseshigherthanBAUdueto more expensive renewable technology. The lower demand in SES and ASESowingtoenergyefficiencygainshasaclearimpactoninvestments.

ThebreakdownofcostsbytypearepresentedinFigure95,Figure96andFigure97.OffgridcostsreflectsinvestmentinsolarPVandbatterystoragesystemstoprovidesimilarelectricityaccessintheSESandASES.

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Figure94 CambodiaCumulativeInvestment(Real2014USD)

Figure95 CambodiaCumulativeInvestmentbyType(BAU,Real2014USD)

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Figure96 CambodiaCumulativeInvestmentbyType(SES,Real2014USD)

Figure97 CambodiaCumulativeInvestmentbyType(ASES,Real2014USD)

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Figure98,Figure99andFigure100plotthecumulativeinvestmentsplitforimportsand exports. By 2050, $42 billion is required to develop the BAU generationrequirements. In the SES, $39 billion is required to develop generation projects(andenergyefficiency) inCambodiaandanadditional$8billionspentonprojectsoutsideof Cambodia. TheASES also requires $42billion in total butwithonly $4billion(halfofthatcomparedtoSES) invested inneighbouringcountriestoexportsurplusresourcepotentialintoCambodia.

Figure98 CambodiaCumulativeInvestmentofBAU(Real2014USD)

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Figure99 CambodiaCumulativeInvestmentofSES(Real2014USD)

Figure100 CambodiaCumulativeInvestmentofASES(Real2014USD)

9.5 OperatingCosts,AmortisedCapitalCostsandEnergyEfficiencyCosts

Figure101plotsthetotalgenerationCAPEX,OPEX,gridelectrification,off-gridandenergy efficiency costs as a proportionof total forecastGDP. Capital expenditure

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hasbeenamortisedoverthelifeoftheprojecttoderiveannualcapexfigures.TheBAUrisesto6.1%ofGDPmainlydrivenbytherampupinnewentrywithrespecttoincreasingdemandsinCambodiaandfuelcosts.TheBAUrequiresthehighestcostoutlayoutofthethreescenarios.Figure102,Figure103,andFigure104plotstheannualtotalsystemcostforeachofthescenarios.

Figure101 TotalCAPEX,OPEXandEnergyEfficiencyoverGDP

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Figure102 TotalSystemCostbyType(BAU)

Figure103 TotalSystemCostbyType(SES)

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Figure104 TotalSystemCostbyType(ASES)

Figure 105 and Figure 106 plots the difference in amortised CAPEX, OPEX, gridelectrification,off-gridandenergyefficiencycostsbetween theSESandBAU,andASES and BAU respectively. The costs have also been adjusted for exports andimports. Positive amounts represent an additional investment required in eithertheSESorASESandnegativeamountscorrespondtocostsavings.Thetransmissioncategoryreferstocostsrelatingtoelectrification.

FortheSESagainstBAUcase,fuelsavingsofbetween$500millionand$1.1billionayear occur post-2035whenmore coal capacity comes online. The SES also has areducedCAPEXofupto$200millioncomparedtotheBAUprimarilyduetolowerdemands.Anadditional$470millioninenergyefficiencyandupto$55minoff-gridcostsareneededintheSESresultinginnetsavingsof$720mby2050.

TheASESexperiencescostsavingssimilartothecomparisonabovewithimmediateCAPEXsavingsduetothereduceddemand.Fuelcostsavingsarearound50%higherthanintheSESagainstBAUduetoearlierretirementofcoalunitsoffsetwithcapexsavingsofupto$360millionayear.Thesavingsareoffsetbyslightlyhigheroff-gridandenergyefficiencycostsrelativetotheBAUby$500millionby2050producinganetsavingof$1.2billionayearby2050.

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Figure105 DifferenceinCAPEX,OPEXandEnergyEfficiencyCosts(SESandBAU)

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Figure106 DifferenceinCAPEX,OPEXandEnergyEfficiencyCosts(ASESandBAU)

Figure107andTable21presentthenetpresentvalueofthepowersystemcostsbycomponent using an 8% and 15% discount rate. Similar to the conclusions frompreviouscharts,theBAUhasthehighestcostfollowedbySESthentheASES.TheBAU is comprisedof ahigherpercentageof fuel costs,whereas theASEShas thehighest percentage relating to capital costs. The total net present value (NPV)differencebetweentheBAUandASESisapproximately$5billion.

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Figure107 NPVofSystemCosts(Real2014USD)over2015to2050period

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FuelCost 6,930 4,398 2,988 2,216 1,504 1,069

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FOM 1,382 1,362 1,327 566 542 499

VOM 724 780 675 242 246 211

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EnergyEfficiency 0 975 1,338 0 296 417

Offgrid 0 278 508 0 95 154

Total 24,487 22,139 19,698 9,166 8,328 7,263

9.6 FuelPriceSensitivity

Figure108plotstheLCOEoftheBAU,SESandASESasdiscussedinsection9.2.Inaddition,itplotstheLCOEfora50%increasetoallfuelprices55,whichreflectsthedifferencebetweenIEA’scrudeoilpricingunderthe450ScenarioandtheCurrentPoliciesScenario($95/bbland$150/bblrespectively).ItcanbeseenthattheLCOEof the BAU rises more ($8/MWh on average) against a fuel price increasecomparedwithsmaller increases intheSESandASES($6/MWhand$5/MWh) in55Coalprices,naturalgasprices,uraniumprices,biomassprices,biogasprices,dieselandfueloil.

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2050. The small spread between the scenarios is due to the significant hydrogenerationintheBAUwhichisreplacedwithbioenergygenerationintheSESandASES.

Figure108 CambodiaFuelPriceSensitivity+/-50%fuelprices($/MWh)

9.7 ImpactofaCarbonPrice

Inasimilarwaytotheprevioussection,Figure109plotstheLCOEundertheBAU,SES and ASES and the LCOE under a carbon price scenario. The carbon scenarioputsa$20/t-CO2impostthroughouttheentiremodelledperiod.ThisisintendedtoshowthesensitivityoftheBAU,SESandASEStoacarbonprice.Inasimilarwaytothe previous section, this shows that LCOE in the SES and ASES is insensitive tocarbonpricesby2050whilefortheBAU,itaddsaroundanadditional$10Real2014USD/MWhtotheLCOEbecauseofitscoalgeneration.

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Figure109 CambodiaCarbonSensitivities($/MWh)

9.8 RenewableTechnologyCostSensitivity

Figure 110 shows the LCOE sensitivity to 20% and 40% decreases in renewabletechnology costs.Asexpected theASES followedby theSES is themost sensitivewithpotentialdeclinesofupto$23/MWh.Theresultsalsoshowthata20%dropintheassumedrenewabletechnologyCAPEXwillbringtheLCOEinlinewiththeBAU.

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Figure110 CambodiaRenewableTechnologyCostSensitivities($/MWh)

9.9 JobsCreation

To assess the implications for Job Creation for each scenario we applied themethodology used by the Climate Institute of Australia. The methodology issummarisedinAppendixC.Thenumbersofjobscreatedforeachofthescenariosare shown in Figure 111, Figure 112 and Figure 113. The job categories showninclude:manufacturing,construction,operationsandmaintenanceandfuelsupplymanagement.Figure114providesacomparisonoftotaljobscreatedforBAU,SESandASES.Thekeyobservationsare:

• Acrossall scenarios,manufacturingandconstructionaccount formostof thejobs with a much smaller share attributable to O&M and fuel supply. Jobcreation peaks towards 2035 across all scenarios due to the demand profileshape.

• TheBAU job creationprofilepeaks at around25,000 jobs. The fall in jobs in2027isduetoaperiodofminimaldevelopmentfrom2027to2030.

• SESjobcreationpeakstowards50,000oralmosttwicethatintheBAU.Thisisentirelydrivenby renewableenergydevelopments that requiremore jobs inthemanufacturingandconstructionphases.SeeAppendixCforassumptions.

• TheASESjobcreationpeaksat72,000jobs,oralmostthreetimesthatoftheBAU driven by evenmore renewable energy projects required as the regionmovestowardsa100%renewablegenerationtargetby2050.

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• Different skills are required between the scenarios, BAUhas peopleworkingon conventional coal, hydro and gas, whereas the SES and ASES has peoplemainlyworkingonsolar&batterystoragesystems.

• Note that themanufacturing and fuel supply jobs shown to be createdmaynot be created within Cambodia withmanufacturing of equipment and fuelmanagement(forimportedfuels)occurringinothercountries.

Figure111 JobCreationbyCategory(BAU)

Figure112 JobCreationbyCategory(SES)

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Figure113 JobCreationbyCategory(ASES)

Figure114 TotalJobCreationComparisonBAU,SESandASES

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10 ConclusionsIn this report we have presented the findings of power system modelling ofCambodia’spowersystemforaBusinessasUsual(BAU),SustainableEnergySector(SES)andAdvancedSES(ASES)scenariosforCambodia.TheBAUoutlookassumedthat future power sector developmentswould be basedon continued large scalehydrodevelopment,coalandlaternaturalgas.TheSESandASEShavebothtakenmeasurestodeployamaximalamountofrenewableenergyandenergyefficiencymeasures inordertoprovidesomealternativescenariosforthecountry. TheSESandASESbothalsoassumeamorerapidprogramofcross-borderinterconnectionin theGMS,which allows the region tomore fully exploit diversity in demand aswell as geographically dispersed areaswith high renewable energy potential. TheASES assumes that the power sector is able tomore rapidly transition towards a100% renewable energy technology mix under an assumption that renewableenergy is deployed more than in the SES scenario with renewable energytechnologycostsdecliningmorerapidlycomparedtoBAUandSESscenarios.

10.1 ComparisonofScenarios

Thefollowingarethekeyconclusionsthathavebeendrawnfromtheanalysis:

• TheSESdeliversanenergyefficiencygainbeyondtheBAUcaseofabout29%comparedtotheBAU.TheASESdeliversefficiencygainsofaround37%.

• Cambodia, presentlywith low electrification rates, in the BAU achieves near100% grid electrification by 2030. The SES and ASES provide access toelectricityviaalternativeapproachesasfollows:

- TheSESdeploysoff-grid solutions (mini gridsbasedon solar andbatterysystems) with longer-term interconnection, thereby deferring grid-electrificationinvestmentcapitalcosts;while

- TheASES alsodeploys off-grid solutions, but given themore acceleratedcost declines in the ASES (compared to both BAU and SES) does notinterconnectthedistributedgridstothecentralsystem.

By2030theBAUhasachievedsome99%viacentralgridconnectionwhereastheSESachieves96%accessandtheASESachieves94%withthedeploymentofoff-gridsolutions.TheSESreaches99%by2032andASESby2033.

• By 2030, the SES and ASES are able to achieve a power system that canrespectivelydeliversome63%and77%ofgenerationfromrenewableenergy(includinglarge-scalehydro).Thiscomparesto52%intheBAU.

• By2050, the SESandASESare able to achieveapower system thatdelivers87%and99%ofgenerationfromrenewableenergyresources(includinglarge-

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scale hydro). In contrast, 44% of the generation in the BAU is provided byrenewableenergyresourcesby205056.

• By2050,theSESandASESavoidsaround32and38milliontonsofgreenhousegasemissionsperyearcomparedtotheBAU.ComparedtotheSES,by2050,thecountryhasavoideddevelopingsome4,868MWofcoaland1,500MWofgas,and5,843MWofcoaland1,500MWofgas fortheASES. ThustheSESandASESwouldbeabletomitigateagainstexternalitiesandpotentialhealthrisks associated with these technologies57. All scenarios achieve very lowcarbon intensities given Cambodia’s dependence on large-scale hydro in theBAU.

• The SES and ASES compared to the BAU have not needed to develop some2,885MWoflargescalehydroprojects.

• Basedonsomesimplemeasuresforenergysecurity:

- Under theASES and SES, Cambodia benefits fromamore diversemix oftechnologiesandisnotasdependentonasinglesourceofprimaryenergyastheBAU;forexample,theBAUishighlydependentonlarge-scalehydroand coal, while the SES diversifies supply across a range of renewableenergy technologies with no generation type accounting for more than35%ofthegenerationshare;

- The SES and ASES has 78% and 87% of its electricity generated fromdomestically controlled andmanaged resources compared to theBAUat50%. Under each of the scenarios power is imported from Thailandbecause of mismatches in renewable resource profiles furthering theargumentforstrong interconnectionamongsttheGMScountriesunderasustainableenergyscenario;and

- TheASESandSESachievesareliablepowersystemthroughcoordinationonboth the supplyanddemandsideof the industry,with similarenergyreserve margins as the BAU. Though as a measure of energy supplystorage and flexibility the ASES and SES overall is lower than the BAU,which means that the BAU would be more resilient against extremeevents. This enhances the need to pursue an integrated regional powersystemthroughcross-bordertrading.WhilemodellinghasshownthattheASESandSESisoperationallyfeasible(evenwithlessdirectlydispatchableresourcesintheSEScomparedtotheBAU),stresstestingofboththeSESandASESscenariosagainstmoresignificantthreatstotheoperationofthepowersystemwould likelynotbehandledaswellcomparedtotheBAU.Moreworktounderstandanddevelopappropriatemitigationmeasuresisrequired.

56Large-scalehydroisincluded57Further information on health impacts related to coal projects is provided in the Harvard University study:Cropper et. al. “The Health Effects of Coal Electricity Generation in India”, 2012, available from:http://www.rff.org/files/sharepoint/WorkImages/Download/RFF-DP-12-25.pdf.

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10.2 EconomicImplications

10.2.1 ElectricityCostsBased on the outcomes of modelling the BAU, SES and ASES scenarios, we alsoexamined the following issues in relation to electricity costs: (1) levelised cost ofelectricity, (2) investment requirements, (3) job requirements, (4) sensitivity ofelectricitypricestofuelpriceshocks,and(5)theimplicationsofapriceoncarbonequivalent emissions for electricity prices. Based on this analysis we draw thefollowingconclusions:

• Theoveralllevelisedcost(LCOE)oftheBAUcomparedtotheSESandASESforCambodia is shown to be lower, with the BAU tending towards $77/MWhwhile SES and ASES trend towards $90/MWh. Note that the LCOE analysiscompares only central grid connected electricity production and does notincludethecostofexternalities.

• Wemakethefollowingobservationsbasedonsensitivityanalysis:

- Withtechnologycostsofrenewableenergytechnologiesbeing20%lower,theLCOEsofSES,ASESandBAUarelargelythesame;

- Acarbonpriceof$20/t-CO2alsoresultsinlargelythesameLCOEs;and

- TheLCOEoftheBAUismoresensitivetofuelpricevariations.

• For theSESagainstBAUcase, fuel savingsofbetween$500millionand$1.1billionayearoccurpost-2035whenmorecoalcapacitycomesonline.TheSESalsohasareducedCAPEXofupto$200millioncomparedtotheBAUprimarilyduetolowerdemands.Anadditional$470millioninenergyefficiencyandupto$55minoff-gridcostsareneededintheSESresultinginnetsavingsof$720mby2050.

• The ASES experiences cost savings similar to the comparison above withimmediateCAPEX savings due to the reduceddemand. Fuel cost savings arearound50%higher than in the SES against BAUdue to earlier retirement ofcoalunitsoffsetwithcapexsavingsofupto$360millionayear. Thesavingsareoffsetbyslightlyhigheroff-gridandenergyefficiencycostsrelativetotheBAUby$500millionby2050producinganetsavingof$1.2billionayearby2050.

10.2.2 InvestmentImplications

From2015to2050,theoverallinvestmentforeachscenarioissimilar:$42billionintheBAUcomparedto$48billionintheSESand$47billionintheASES(Real2014USD). However, the important difference is that the composition of theinvestmentsarequitedifferent.TheBAUdirectsmostinvestment(80%)tocoalandhydroprojects,whileintheSES(andASES)some55%(57%)isdirectedtosolarandbatterysystemtechnologies,withothersignificantinvestmentsinenergyefficiencymeasures,bioenergy,windandoff-grid.Clearly,comparedtotheBAU,theSESand

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ASESwillrequireinvestmentsacrossamorediverserangeoftechnologiesandsuchtechnologieswilltendtobesmalleranddistributedratherthanbeinglargeinscale.

10.2.3 JobCreationThe SES and ASES scenarios both result in quite different technology mixes forCambodia compared to the BAU. Each has quite different implications for theworkforcethatwouldberequiredtosupporteachscenario. Basedonanalysisoftherequiredjobsweestimatethat58:

• TheBAU from2015 to2050wouldbeaccompaniedby thecreationof some722,727 jobs years59(27%manufacturing, 57% construction, 11% operationsandmaintenance,and4%fuelsupply);

• The SES would involve the creation of some 1,049,428 job years (23% inmanufacturing,65% inconstruction,10% inoperationsandmaintenanceand1%infuelsupply);and

• The ASES would involve the creation of 1,292,960 job years (23% inmanufacturing,67% inconstruction,10% inoperationsandmaintenanceand0.4%infuelsupply).

For the SES, Cambodia will need to develop a skilled workforce capacity ofsupportingsome3206MWofsolartechnologiesby2030and10,756MWby2050.EnhancingthecapabilityandqualityofexistingsolarPVenterpriseswillbecrucialinordertoincreasethelikelihoodofthenewpermanentjobsbeingoccupiedbylocalworkers.Engagingwithlowskilledtomediumskilledlabourersandcraftsmaninabottomup approach is strongly recommended in order to absorb existing labourandfuturelabourthatwillbeinneedofemployment.

10.3 IdentifiedBarriersfortheSESandASES

ThefollowingaresomebarriersspecifictoCambodiawereidentifiedinthecountryassessmentreport:

• Heavy reliance on the Mekong Basin flow and Cambodia’s downstreamlocationputsCambodianhydropoweratadistinctdisadvantageinthefuture.

• Lackofacomprehensiverenewableenergypolicy.Itcouldbearguedthatthehigh costs of generation from importing fuel oil encourages the use ofrenewableenergy technologiesas costs godownbut theGovernment is stillrequired to form a comprehensive renewable energy policy to encouragemoreforeigndirectinvestment.

• The banking and finance sector supporting small and medium businessesremain in a relatively early stage of development. Smaller financing

58BasedontheemploymentfactorspresentedinAppendixC.59Ajobyear isonejobforonepersonforoneyear. Weusethismeasuretomakecomparisonseasieracrosseachscenarioasthenumberofjobscreatedfluctuatesfromyeartoyear.

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institutionsoperate in rural areas toprovide short-termcredit butwithhighinterestrates.Mostofthesetechnologiesrequireasignificantoutlayofcapitalandrequirethebankingsectortoprovidethatnecessarysupport.

• Cambodia’smanagementandplanningsystemscouldneedimprovement,withthe country still drawing up relevant laws and building out necessaryinfrastructure. There is also a lack of technical and operational expertisewithin the government and the local private sector in this areawhich limitsdevelopmentopportunities.

• There are no significant incentives put in place to encourage investment inrenewable energy technology. Given the objectives of the RGC to ensureelectricity access and equity, an entirely commercial approachwould not bepossible.Assuchthereshouldbeincentivesputinplacetoachieveabalancebetweenthetwofactorsovertheshort-term.Thegovernmentitselfdoesnothave an allocated budget towards renewable energy, and given the nationalbudget is partly dependent on foreign aid, this leaves the private sectorresponsibleforfunding.

• Thereisalackofaccurateorupdatedrenewableenergyresourcestudies.Theincreaseduseofhydropowerposessignificantenvironmentalrisksparticularlyin the case forCambodiawith sucha significantproportionof itspopulationdependentonagriculture.

• There isa lackofawarenessof the importanceofenergyefficiency includingthe knowledge base of staff and shops offering such services. This is alsorelated to thebroadereducation levelsof thenation. Lackofawarenesscanalsobeattributedtoinadequatedatamonitoringandanalysisforperformancereportingtoproperlyquantifythebenefit.

10.4 Recommendations

The followingarekeyrecommendations toreducethebarriersand“enable” theSESandASES:

• Formationofmore comprehensive energy policies to create an environmentthat is appropriate for investment in renewable energy technologies andenergy efficiency measures. Investor confidence in renewable energyinvestment will be enhanced by having a transparent regulatory frameworkthat provides certainty to investors and appropriately considers theramificationsofhighlevelsofrenewableenergyinthegenerationmix.

• Formation of electricity pricing policies and mechanisms that encourageefficient behavior and investment in generation technologies, transmissionanddistributionequipmentandenduseenergyconsumption.

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• Conductmoredetailedassessmentsofrenewableenergypotentialandmaketheresultspubliclyavailabletoenableprospectiveinvestorstounderstandthepotential, identify the best opportunities and subsequently take steps toexploreinvestmentanddeployment.

• Knowledge transfer and capability building in the renewable energytechnologies and energy efficiency for policy makers, staff working in theenergyindustry,aswellaswithineducationinstitutionstoensurethehumancapacityisbeingdevelopedtosupportanationalpowersystemthathasahighshareofgenerationfromrenewableenergy.

• Investments in ICTsystemstoallowforgreater real-timemonitoring,controland forecastingofCambodia’snationalpowersystem, includingSCADA/EMS,and smart-grid technology and renewable energy forecasting systems andtools.Thiswillenableefficientreal-timedispatchandcontrolofallresourcesin Cambodia’s national power system and will create an environment moreconducive for the management of high levels of renewable energy in thegenerationmix.

• Takemeasures to encourage cross-border power trade in the region, as thisworks to the advantage of exploiting scattered renewable energy resourcepotentialsanddiversityinelectricitydemand.Inparticular:

- Develop an overarching transmission plan that has been informed bydetailedassessmentsandplanstoleveragerenewableenergypotentialinthe region and diversity in demand and hydrological conditions. ForCambodia, we see that under the SES and ASES the country is both animporter and exporter of electricity while we project in the BAU in thelonger-runitismainlyanimporter.

- Enhance technical standards and transmission codes in each country toallowforbetterinteroperationofnationalpowersystems.

- Establish dispatch protocols to better coordinate real-time dispatch ofpowersystemsintheregiontomakethebestuseofreal-timeinformationandcontinuouslyupdateddemandandrenewablegenerationforecasts.

- Develop a framework to encourage energy trade in the region, and inparticulartowardsamodelthatcansupportmultilateralpowertradingviaaregionalpowermarketorexchange(forexample).

• Takemeasurestoimprovepowerplanningintheregionto:

- explicitlyaccountforprojectexternalitiesandrisks,

- evaluateamorediverserangeofscenariosincludingthosewithhighlevelsofrenewableenergy,

- takeintoconsiderationenergyefficiencyplans,

- take into consideration overarching plans to have tighter power systemintegrationwithintheregion,and

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- carefullyevaluatetheeconomicsofoff-gridagainstgridconnectionwherethisisrelevant.

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AppendixA TechnologyCostsTable 22 sets out the technology cost assumptions that were used in themodellingpresented in this report for theBAUandSESscenarios. Table23setsoutthetechnologycostsusedintheASES. Thetechnologycostsofcoalandgasdo not include overheads associatedwith infrastructure to develop facilities forstoring/managingfuelsupplies.Thesecostswerehoweveraccountedforinthemodelling.

Figure 115 and Figure 116 presents the levelised cost of new entry generationbasedonassumedcapacityfactors.LCOElevelspresentedinSection9arebasedonweightedaverageLCOE’sandmodelledoutputandwilldifferfromtheLCOE’spresented here. The LCOE for battery storage is combined with solar PVtechnologyassuming75%ofgenerationisstoredforoff-peakgeneration.

Table22 TechnologyCostsAssumptionsforBAUandSESScenarios

TechnologyCapitalCost(Unit:Real2014USD/kW)Technology 2015 2030 2040 2050GenericCoal 2,492 2,474 2,462 2,450CoalwithCCS 5,756 5,180 4,893 4,605CCGT 942 935 930 926GT 778 772 768 764WindOnshore 1,450 1,305 1,240 1,175WindOffshore 2,900 2,610 2,480 2,349HydroLarge 2,100 2,200 2,275 2,350HydroSmall 2,300 2,350 2,400 2,450PumpedStorage 3,340 3,499 3,618 3,738PVNoTracking 2,243 1,250 1,050 850PVwithTracking 2,630 1,466 1,231 997PVThinFilm 1,523 1,175 1,131 1,086BatteryStorage-Small 600 375 338 300Battery-UtilityScale 500 225 213 200Solar Thermal withStorage

8,513 5,500 4,750 4,000

Solar Thermal NoStorage

5,226 4,170 3,937 3,703

Biomass 1,800 1,765 1,745 1,725Geothermal 4,216 4,216 4,216 4,216Ocean 9,887 8,500 7,188 5,875Biogas(AD) 4,548 4,460 4,409 4,359

*Batterytechnologyquotedona$/kWhbasis

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Figure115 LevelisedCostofNewEntry(BAU&SES,$/MWh)

0

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100

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200

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2017

2019

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Levelised

CostofGen

eraj

on($

/MWh)

Hydro Wind Coal

Gas Bio Solar

CSP PV+Bavery[75%] HydroROR

Geothermal PumpStorage

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Table23 TechnologyCostsAssumptionsforASESScenarios

TechnologyCapitalCost(Unit:Real2014USD/kW)Technology 2015 2030 2040 2050GenericCoal 2,492 2,462 2,450 2,437CoalwithCCS 5,756 4,893 4,605 4,334CCGT 942 930 926 921GT 778 768 764 761WindOnshore 1,450 1,240 1,175 1,113WindOffshore 2,900 2,480 2,349 2,225HydroLarge 2,100 2,275 2,350 2,427HydroSmall 2,300 2,400 2,450 2,501PumpedStorage 3,340 3,618 3,738 3,861PVNoTracking 2,243 1,050 850 688PVwithTracking 2,630 1,231 997 807PVThinFilm 1,523 1,131 1,086 1,043BatteryStorage-Small 600 338 300 267Battery-UtilityScale 500 213 200 188Solar Thermal withStorage

8,513 4,750 4,000 3,368

Solar Thermal NoStorage

5,226 3,937 3,703 3,483

Biomass 1,800 1,745 1,725 1,705Geothermal 4,215 4,215 4,216 4,215Wave 9,886 7,187 5,875 4,802Biogas(AD) 4,548 4,358 4,308 4,259

*Batterytechnologyquotedona$/kWhbasis

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Figure116 LevelisedCostofNewEntry(ASES,$/MWh)

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CSP PV+Bavery[75%] HydroROR

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AppendixB FuelPricesTable24setsouttheFreeonBoard(FOB)fuelpriceassumptionsthatwereusedin themodellingpresented in this report. This fuel price setwas common to allthreescenarios.

Table24 FuelPriceAssumptions(FOB)(Real2014USD/GJ)

Year Coal Gas Diesel Uranium FuelOil Biomass Biogas2015 2.39 10.08 13.34 0.72 9.13 2.57 1.002016 2.51 11.88 15.24 0.76 10.49 2.62 1.002017 2.63 12.91 15.28 0.80 11.68 2.67 1.002018 2.74 13.72 16.41 0.80 12.43 2.72 1.002019 2.86 14.47 17.53 0.80 13.18 2.78 1.002020 2.98 15.16 18.64 0.80 13.93 2.83 1.002021 3.10 15.81 19.73 0.80 14.65 2.89 1.002022 3.21 16.46 20.80 0.80 15.36 2.95 1.002023 3.33 17.10 21.86 0.80 16.06 3.01 1.002024 3.45 17.72 22.90 0.80 16.76 3.07 1.002025 3.56 18.34 23.93 0.80 17.44 3.13 1.002026 3.56 18.29 23.86 0.80 17.39 3.19 1.002027 3.56 18.24 23.79 0.80 17.34 3.25 1.002028 3.56 18.19 23.72 0.80 17.29 3.32 1.002029 3.56 18.14 23.65 0.80 17.24 3.39 1.002030 3.56 18.09 23.58 0.80 17.19 3.45 1.002031 3.56 18.06 23.53 0.80 17.15 3.52 1.002032 3.56 18.02 23.49 0.80 17.12 3.59 1.002033 3.56 17.99 23.44 0.80 17.08 3.67 1.002034 3.56 17.96 23.40 0.80 17.05 3.74 1.002035 3.56 17.92 23.35 0.80 17.02 3.81 1.002036 3.56 17.89 23.30 0.80 16.98 3.89 1.002037 3.56 17.86 23.26 0.80 16.95 3.97 1.002038 3.56 17.83 23.21 0.80 16.92 4.05 1.002039 3.56 17.79 23.16 0.80 16.88 4.13 1.002040 3.56 17.76 23.12 0.80 16.85 4.21 1.002041 3.56 17.76 23.12 0.80 16.85 4.29 1.002042 3.56 17.76 23.12 0.80 16.85 4.38 1.002043 3.56 17.76 23.12 0.80 16.85 4.47 1.002044 3.56 17.76 23.12 0.80 16.85 4.56 1.002045 3.56 17.76 23.12 0.80 16.85 4.65 1.002046 3.56 17.76 23.12 0.80 16.85 4.74 1.002047 3.56 17.76 23.12 0.80 16.85 4.84 1.002048 3.56 17.76 23.12 0.80 16.85 4.93 1.002049 3.56 17.76 23.12 0.80 16.85 5.03 1.002050 3.56 17.76 23.12 0.80 16.85 5.13 1.00

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AppendixC MethodologyforJobsCreationThis section briefly summarises the methodology that we adopted for jobscreation.ThemethodologythatwehaveadoptedhasbeenbasedonanapproachdevelopedbytheInstituteforSustainableFuturesattheUniversityofTechnology,Sydney and used by the Climate Institute of Australia60. In essence the jobscreatedindifferenteconomicsectors(manufacturing,construction,operations&maintenance and fuel sourcing and management) can be determined by thefollowingwiththeinformationbasedonthenumbersprovidedinTable25.

Wehaveappliedthismethodologytotheresultsineachscenariodiscussedinthisreportinordertomakeestimatesofthejobscreationimpactsandallowcomparisonstobemade.

60Adescriptionofthemethodologycanbefoundinthefollowingreference:TheClimateInstitute,“CleanEnergyJobsinRegionalAustraliaMethodology”,2011,available:http://www.climateinstitute.org.au/verve/_resources/cleanenergyjobs_methodology.pdf.

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Table25 EmploymentFactorsforDifferentTechnologies

Annualdeclineappliedtoemployment

multiplier

Constructio

ntim

e

Constructio

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Man

ufacturin

g

Ope

ratio

ns&

mainten

ance

Fuel

Technology 2010-20 2020-30 years perMW perMW perMW perGWh

Blackcoal 0.5% 0.5% 5 6.2 1.5 0.2 0.04

(includeinO&M)

Browncoal 0.5% 0.5% 5 6.2 1.5 0.4

Gas 0.5% 0.5% 2 1.4 0.1 0.1 0.04

Hydro 0.2% 0.2% 5 3.0 3.5 0.2

Wind 0.5% 0.5% 2 2.5 12.5 0.2

Bioenergy 0.5% 0.5% 2 2.0 0.1 1.0

Geothermal 1.5% 0.5% 5 3.1 3.3 0.7

Solarthermalgeneration

1.5% 1.0% 5 6.0 4.0 0.3

SWH 1.0% 1.0% 1 10.9 3.0 0.0

PV 1.0% 1.0% 1 29.0 9.0 0.4

ALTERNATIVES FOR POWER GENERATION IN THE GREATER MEKONG...

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