Cambodia's natural resources
Cambodia's natural resources are pivotal in addressing the country's energy needs, particularly in the context of its developing economy and rapidly urbanizing population. Primarily, rural communities depend on firewood for cooking, with about two million households relying on this traditional energy source, though it poses health risks and contributes to deforestation. Urban areas have seen a significant increase in electricity access, reaching approximately 92% of the population by 2022, primarily through diesel generators and imported fossil fuels, which makes Cambodia vulnerable to fluctuations in global oil prices.
The country has potential for renewable energy development, particularly in hydropower and solar energy, with current contributions to the energy mix being 45% and 4.5% respectively. The discovery of offshore oil in 2005 raises prospects for economic growth and energy independence, but extraction remains unrealized. Despite opportunities, Cambodia faces challenges such as ensuring affordable access to energy in rural areas, managing resources sustainably to avoid exacerbating poverty, and navigating the complexities of energy investment. The government's renewable energy action plan aims to enhance the use of alternative energies, highlighting the need for a balanced approach to energy development that respects both environmental sustainability and economic opportunity.
Cambodia's natural resources
Official Name: Kingdom of Cambodia.
Summary: Cambodia depends on wood for primary energy needs in rural areas, but is facing growing demand in rapidly expanding urban areas for modern energy services that are currently provided through imported gas and diesel.
After ending decades of isolation, war, and conflict in 1998, Cambodia has worked to ensure stability and improve living conditions for its citizens. This period has seen rapid economic growth and changing lifestyles, most notably an increase in urban residents. An estimated 16.5 percent live below the national poverty line.
Poverty, coupled with Cambodia’s majority rural population (around 75 percent), creates challenges in expanding modern energy services to a scattered populace with limited income. Rural Cambodians rely predominantly on firewood for cooking. Electricity demand is centered in urban areas, where it is supplied with diesel generators. About 92 percent of the population had electricity by 2022. Cambodia imports fossil fuels, making it vulnerable to fluctuating global oil prices. The discovery in 2005 of oil off Cambodia’s coast may contribute much needed revenue to the country, though by the 2020s this resource remained untapped.
Firewood and Charcoal
Firewood is Cambodia’s primary energy source, particularly in rural areas and among the poor. As of 2022, two million households used firewood for cooking. The country also imported 93,504 Kg of wood charcoal, mostly from China, in 2022. The use of firewood and charcoal can exacerbate deforestation and biodiversity loss. Burning firewood for cooking is known to result in upper respiratory diseases when done in an open fire pit. Carbon dioxide, a greenhouse gas, is also released when wood is burned.
Meeting Urban (and Modern) Energy Needs
At the start of the twenty-first century, about 16 percent of Cambodians had access to electricity. Availability improved rapidly over the next two decades, about by 2022, about 92 percent of Cambodians had access to electricity. In rural areas, the percentage was lower, coming in about 88 percent.
Liquefied petroleum gas (LPG) is used by about half of Phnom Penh’s population for cooking. LPG is expensive and difficult to transport, making it difficult to rely upon in outlying rural areas. Urban areas are more reliant upon gas and electricity for both cooking and lighting. More than 49 percent of the electricity is generated from fossil fuels.
Alternative Energies
Cambodia’s energy provision is dispersed; there is no national grid, but rather 24 isolated grids that serve cities and regions throughout the country. Thus, there is potential to develop localized renewable and alternative energy strategies. The government has a renewable energy action plan to increase the access to and use of renewable energies. Cambodia has the potential to develop hydropower, solar power, and wind energy. Hydropower and solar power are currently used and provide 45 percent and 4.5 percent of total installed capacity, respectively. Both present opportunities for further development, particularly hydropower from the Mekong River and its tributaries. Despite the hydropower potential, it is difficult and expensive to develop and distribute from the point of generation and is thus unlikely to be a panacea for Cambodia’s growing energy needs. Biofuel as a substitute for fossil fuel for transportation or electricity generation is the latest investment trend. Converting land to growing biofuels could negatively impact food supply and forest cover if not managed properly. Other options are byproducts of industrial processing, such as cashew nut shells. Household-scale technologies, such as biogas digesters, also have been built.
Future Oil Production
In January 2005, Chevron announced the discovery of oil and natural gas off Cambodia’s coast. Initial projections slated production to begin in 2009, but more than a decade later, extraction had not begun. Oil development could create an economic boom, provide much-needed revenue, alleviate poverty, improve quality of life, and reduce reliance on foreign oil. However, critics have argued that the oil reserves may be limited, corruption could increase and weaken democracy, and the revenues could widen the gap between rich and poor if not managed properly and transparently. Furthermore, fossil fuels contribute to poor air quality and rates of carbon dioxide emissions that fuel global climate change.
Challenges
Developing Cambodia’s energy sector faces multiple challenges including making rural access to modern energy services affordable, developing cost-efficient energy resources in pace with the growing industrial and commercial sector needs, reducing dependence on expensive imported fossil fuels to generate expensive electricity, and increasing energy supply through increased investment and production. Investment by companies in China and other Asian countries could boost production of biofuels made from cashew nut shells and other byproducts.
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