US firms urged to capitalise on Cambodia’s energy sector potential

The suggestion comes in the wake of ITA statement assessing Cambodia’s energy landscape and its trajectory towards cleaner and more reliable power.

The International Trade Administration (ITA) has called on American companies to explore expanding their presence in Cambodia’s fast-growing energy sector, highlighting major opportunities in power generation, transmission equipment, energy storage, efficiency technologies, and off-grid solar solutions.

The recommendation comes as part of a recently released ITA statement assessing Cambodia’s energy landscape and its trajectory towards cleaner and more reliable power.

The ITA, a branch of the US Department of Commerce, works to support American businesses abroad by promoting exports, ensuring fair trade, and easing entry into foreign markets.

In its latest findings, the agency noted that Cambodia continues to face some of the highest electricity prices in the region, driven by limited high-voltage transmission infrastructure and dependence on imported diesel.

Power in provincial areas remains both costlier and less reliable compared to Phnom Penh, and many remote communities still rely on portable generators as their primary electricity source.

Although the Cambodian government previously set a target to electrify all villages by 2020 and connect 90 percent of households to grid-quality electricity by 2030, challenges remain.

By the end of 2024, 120 villages—less than one percent of the total—still lacked electrification due to difficult terrain, while household-level access reached about 88.4 percent.

“Cambodia’s power sector is structured around two main types of licensees: Independent Power Producers, which generate and sell electricity under Power Purchase Agreements, and Consolidated Licensees, which oversee generation, transmission, distribution, and retail operations,” the ITA said.

“Hydropower and coal remain the country’s dominant energy sources, supplemented by solar, fuel oil, and biomass. Cambodia also imports electricity from Thailand, Vietnam, and Laos, particularly during the dry season when hydropower output declines.

“By 2024, Cambodia’s installed power capacity reached 5,044 megawatts (MW), with an additional 672MW imported. Hydropower produced 1,796 MW, coal delivered 1,300MW, fuel oil accounted for 400 MW, and solar contributed 827 MW. The Electricity Authority of Cambodia projects total installed capacity will rise to 6,044 MW in 2025.”

The government’s long-term Power Development Master Plan for 2022-2040 outlines a significant shift away from coal, calling for no new coal-fired power investments after 2024.

Instead, the plan prioritises domestic and imported renewable energy as the foundation of Cambodia’s clean energy transition.

Rooftop solar has emerged as a key component of this effort. Cambodia introduced national guidelines for rooftop solar installations in 2023, updated them in 2024, and set a 2025 installation quota of 30 megawatts.

The policy includes tiered compensation tariffs ranging from $0.037 to $0.060 per kilowatt hour for medium and large systems, while very small installations are exempt from compensation charges.

The government aims to raise renewable energy’s share of the national mix to 70 percent by 2030, up from the current level of more than 62 percent.

In September 2024, the Council of Ministers approved 23 energy projects worth $5.79 billion for implementation through 2029, including 12 solar plants, six wind farms, mixed biomass-solar projects, an LNG power facility, a hydropower plant, and two large-scale energy storage stations.

Storage is increasingly regarded as a strategic national priority, with upcoming battery and pumped-hydro systems expected to provide 2,000 MW of capacity.

Despite Cambodia’s ambitions, funding constraints persist. The government estimates it will need $9 billion to expand generation capacity and the national grid, with $2.5 billion already approved through 2025.

Given these gaps, the ITA encouraged US companies to monitor opportunities posted by Electricité du Cambodge, the World Bank, and the Asian Development Bank, noting continued demand for diesel generators, off-grid systems, and modern renewable technologies.

Source: Khmer Times