China Country Report

The Kingdom of Cambodia is in the Lower Mekong region of Southeast Asia. The country has an area of 181,035 square kilometres and an 800-kilometre border with Thailand in the west. Lao People’s Democratic Republic (Lao PDR) lies to the north and Viet Nam to the east. The landscape is dominated by lowland plains around the Mekong River and the Tonle Sap Lake. The country has about 2.5 million hectares of arable land and more than 0.5 million hectares of pastureland. For 2 decades, until March 2020, before the coronavirus disease (COVID-19) pandemic, Cambodia’s gross domestic product (GDP) growth was strong, at about 7.7% average yearly. The government’s policy reforms have attracted foreign direct investment. Energy has been critical in supporting economic activities and growth. The impact of the pandemic on energy demand has prompted a rethinking of the future energy mix, including types of fuel to meet electricity demand and demand in other sectors. Cambodia has revised its Power Development Plan 2020–2030, which foresees a larger share of gas consumption in the power generation mix. Post–COVID-19 economic recovery is expected from 2022 onwards. Thus, energy demand is expected to rebound strongly, with liquefied natural gas (LNG) and other clean fuels playing a crucial role in the energy mix, especially in power generation, industrial use, transport, and commercial and residential use. The longer historical energy data set reflects the following energy demand–supply analysis. Total final energy consumption (TFEC) grew by 6.6% per year in 2000–2010 and by 7.9% in 2010–2019. Energy demand increased rapidly after 2010. If biomass is excluded, the rate in 2000–2010 was 9.9% and 11.2% in 2020–2019. Demand for conventional energy such as oil and especially electricity increased remarkably by 17.9% per year in 2000–2019. Total primary energy supply (TPES) increased by 5.8% per year in 2000–2010 and by 8.0% per year in 2010–2019, showing the same trend as that of TFEC. Due to the significant increase in electricity demand, Cambodia rapidly increased its hydropower and coal power generation in 2010–2019. Liquefied petroleum gas (LPG), used for cooking and as transport fuel, marked a higher increase ratio in 2000–2019. However, traditional biomass has been phasing out and, as a result, TPES without biomass increased by 11.1% in 2000–2019. Cambodia is promoting energy efficiency and conservation (EEC) in accordance with the Energy Efficiency and Conservation Master Plan for Cambodia prepared by the Economic Research Institute for ASEAN and East Asia. Using the longer historical energy data set, the energy outlook business-as-usual (BAU) model has been updated based on the latest future macroeconomic assumptions, although the results are more moderate than previous ones. The growth rate of TPES in 2019–2050 is 4.4% per year compared with 5.6% in 2018–2050 due to different GDP assumptions, which are 5.8% in the revised case and 6.4% in the previous one. Data coverage is extended from 9 years to 19 years, so that the elasticity between GDP and energy consumption has improved, from 0.875 of the previous results to 0.8 of the current ones. Longer data coverage seems to provide better energy outlook results than shorter data coverage when the econometrics approach is applied.