Cambodia chooses coal in rush for power – government approves two more coal power plants

Cambodia Construction News
A 700-megawatt coal-fired power station run by a joint venture project between Cambodia International Investment Development Group (CIIDG) and the Chinese-based Erdos Hongjun Electric Power in Sinhanouk Province. Image: Cambodian Ministry of Mines and Energy

Cambodia chooses coal in rush for power – government approves two more coal power plants

Critics say the government’s approval of two more coal power plants bucks the trend towards renewables in Southeast Asia.

From the top of a low hill, farmer Pich Sophat points to an area scarred by excavators. Remnants of a house can still be seen in the centre of land being cleared for Cambodia’s Botum Sakor coal-fired power plant.

A newly excavated ditch marking the site boundary cuts through the next village and on down to the sea in the Bay of Kompong Som. The same ditch runs through 63-year-old Sophat’s plantation, slicing a chunk off the land he has farmed for 28 years in Thmor Sor commune.

“I am not sure what is going to happen in the future,” he says. “Even if there is impact, there is nothing I can do about it. The project is going to move forward now.”

The US$1.34 billion Botum Sakor coal plant will have a generating capacity of 700 megawatts (MW) and be built by the Cambodian Royal Group and Sinosteel Equipment and Engineering Company, a subsidiary of China’s state-owned Sinosteel Corporation.

Earlier this month, Sinosteel Group was bought by China Baowu Steel Group. It is unclear what impact this development will have on the project.

New coal power approvals
Botum Sakor is one of two coal plants Cambodia’s government has approved this year in response to severe power outages in 2019. The country currently has the second-lowest electrification rate in Southeast Asia, according to the International Energy Agency. However, critics say the government’s choice of coal bucks the growing trend towards renewables in the region.

Sophat and his fellow villagers are worried that air and water pollution will hurt their livelihoods. He says neither the developers nor the local authorities consulted him before approving the power plant, though he lives less than a kilometre from the site.

Cambodia already has three operational thermal power plants, all in Preah Sihanouk province, with generating capacity of 640 MW. Two more are under construction there, adding an additional 800 MW. The government has greenlighted another new plant in Oddar Meanchey province, as well as Botum Sakor.

Botum Sakor has provoked strong responses because, prior to its approval, the Ministry of Environment re-classified 168.8 hectares of Botum Sakor National Park as private property.


Damaging switch
“In the last five years, Cambodia’s economy and resulting energy demand has been growing really quickly, over 20 per cent annually,” said Bridget McIntosh, Cambodia Country Director of EnergyLab, an NGO focused on clean energy. “In 2018, electricity produced was roughly a third from fossil fuels and two-thirds renewable, mostly hydropower.”

The government decided to expand power supply fast after a spate of blackouts in 2019, and opted for thermal power.

“Although there were already coal projects under construction, by the end of 2019 the generation mix was over half coal and heavy fuel oil, and the rest hydropower or renewables,” McIntosh added. “After the power shortages, there was excellent progress on new solar projects, but there was also a rush to sign more coal projects: 410 MW of solar vs 4,100 MW of new coal. By 2030, Cambodia’s electricity mix is set to be 75 per cent fossil fuels and only 25 per cent renewables.”

By contrast, neighbouring Vietnam added 4.5 GW of solar power to its capacity in the first half of 2019 alone, more than the other ASEAN countries combined. Thailand, on the other side of Cambodia, aims to add 10 GW of rooftop solar and 2.7 GW of floating solar by 2037 under its current Power Development Plan.

“It’s interesting, as Vietnam has signalled that they will cancel about 17,000 MW of coal projects because of delays and difficulties in getting financing,” McIntosh added.

Hydropower dilemma
Another reason for Cambodia’s move toward coal was the government’s decision in March to postpone the development of any hydropower dams on the Mekong River for a decade in response to stresses on the river’s flow as well as domestic and international pressure.

Two major hydropower plants had been planned on the river’s main channel at the China-backed Sambor dam and the Vietnam-financed Stung Treng, but both have faced fierce opposition over their expected impact on water levels, fish stocks and local communities.

The 10-year halt on such projects has been lauded and is good for the Mekong River, but it has left the Cambodian government in a quandary.

“People talk a lot about Cambodia making larger investments in thermal power plants versus renewable energy, but this must be considered from an economic viewpoint, for which the priority is reliable power,” said Bradley Abbott, energy lead at the Global Green Growth Institute (GGGI) Cambodia.

“Renewable energy sources like solar ought to be part of a well-designed sustainable energy strategy which prioritises energy efficiency,” he added. “This is primary, because, unlike solar or wind, it can directly reduce investment in firm generation sources like a thermal power plant.”

GGGI Cambodia, while agreeing with the importance of decarbonising energy production, places great emphasis on improved energy efficiency and management as the foundation of a sustainable power sector that will allow Cambodia to compete with peer export economies like Bangladesh and Vietnam.

They also note that improved efficiency can be just as beneficial in reducing climate change impacts as renewable energy development.

“Reducing power demand through energy efficiency is typically one-third the cost of increasing power generation capacity, so this should be at the base of the power sector development pyramid,” Abbott said.

Industrial and environmental groups, meanwhile, have been highly critical of the increase in coal power. On 11 August, global clothing companies with a major manufacturing presence in Cambodia, including H&M, Adidas, Puma and Nike, sent a letter to the government calling for further investment in renewable energy and a move away from coal power.

“Countries that today prioritise RE [renewable energy] and a green future will avoid wasting money on outdated technologies that will soon be obsolete and expensive,” the letter, which was shared with China Dialogue, reads. “It also signals to industries such as those we represent that Cambodia has a clear long-term vision for retaining and growing its industrial sector to better meet the demands of the future through stability, predictability, trust and confidence.”


Coal fears in Koh Kong
Those living near the Botum Sakor site are worried that pollution will damage fishing and farming. No environmental impact assessment (EIA) of the project has been made public.

Sophat says compensation was set at between $3 and $15 per square metre, depending on a plot’s proximity to the sea. He feels relatively fortunate as he lost only 1 per cent of his five-hectare plantation. His sister, Phorng Rom, 66, and brother-in-law, Kann Prum, 56, lost three hectares of land, on which they grew coconut, cashew nut, agarwood, neem trees and durian.

Like Sophat, they would prefer to see the coal plant located elsewhere.

“In February or March, we heard the news about construction of a coal plant. We tried to speak to the company and the people who came to study the land, [but to no avail]. We did not completely oppose this project, we wanted to request that it be built far from the village, 20 or 30 kilometres away,” Prum says.

He sees an uncertain future, due to the combination of a lower income from the smaller plantation concession and the impact of the Covid-19 pandemic on the family’s noodle shop. He has switched to rearing chickens on their remaining two hectares of land, and expects his income to drop in the coming months.

Both men have heard from other people about the public health risks created by existing coal plants across the bay in Preah Sihanouk Province’s Stung Hav district. Villagers there have developed skin rashes, says Prum.

In August 2019, China Dialogue reported that villagers in the district’s Ou Tres village suffered from coughing, skin rashes and food dirtied by soot after coal ash fell on the community from a processing plant nearby.

The ash, which, to reduce air pollution, is removed from a coal plant in the process of generating power, contains heavy metals and needs to be handled and stored carefully. However, in Stung Hav it is being trucked from the two coal plants to the processing plant next to the village in order to produce cement for Cambodia’s real estate boom.

Ty Sokun, who lives nearby, has been a fisherman all his life. “I learned from fellow fishermen in Stung Hav that there are fewer fish in the area after the construction of the coal plants,” he says. Local fishermen fear they will eventually be forced to move away to earn a living: “There is no point in staying if we cannot fish anymore, because fishing is all we know.”

The Stung Hav coal plant releases warm water (39-40C) into the sea, said Sok Sokhom, director of the Cambodian National Research Organization, who joined one of the consultation meetings with communities and civil society organisations and the plant’s representative prior to its construction.

“During the presentation, the company representative said there will be mitigation measures so that it will not affect the fish. But since the coal plants in Stung Hav began operations, there has been no monitoring or assessment of how the plants have impacted the environment and the people. It is not known,” he said.

Ik Kourn, chief of Thmor Sor commune in Botum Sakor, said that about 60 per cent of the villagers are fishermen, while roughly 30 per cent are farmers and the remaining 10 per cent are vendors and traders.

Prum says fishing underpins many local businesses, such as market stalls and delivery drivers who transport the catch to Phnom Penh and elsewhere.

Kourn says a consulting firm independently studied the social and environmental impacts of the coal plant in January and February, and from February to May, another consulting firm worked with the Ministry of Environment and Ministry of Economy and Finance to evaluate compensation for land and property.

The studies have not been made available to the public. Some 58 households are affected, according to local media. A villager who asked to remain anonymous because they have yet to agree their compensation said payments per square metre ignored the value of the crops.

Kourn denies the power plant will release coal waste into the sea, saying it will be stored and sold to cement producers in Kampot. Work is expected to begin in 2021 and the plant is due to be connected to the grid in 2023.


Official promises
Phay Siphan, a government spokesperson, told China Dialogue that the Botum Sakor plant will employ “clean coal” technology to avoid air pollution and that sea water temperatures would not be altered: “This coal plant will make sure that the heated water will be cooled before it reaches the sea.”

As no technical details related to this project have been released, these claims are unverified.

However, Cambodia is somewhat behind on this technology, as evidenced by one of its operating thermal power plants near Sihanoukville, which had been dismantled in China before it was shipped south because it no longer met China’s environmental regulations.

Neth Pheaktra, a spokesperson for the Ministry of Environment, pledged the ministry would “pay the highest attention” to the environmental impact assessment report to avoid environmental damage: “If there are impacts, they will be minimised.”

Royal Group did not respond to multiple requests for comment.

Ultimately, Botum Sokor and Cambodia’s other thermal power plants speak to far more than a simple coal versus solar debate, says Karolien Casaer, country representative of GGGI Cambodia.

“I think we’re all still a bit hungover from the 2019 blackout, which was a reality check and a reminder that we need alternative energy sources,” she said. “We’d never agree to a coal power investment, but it’s a complex situation for the government to manage, and it’s about more than coal or solar, it’s about energy management, it’s about innovative business models, it’s a much more complex picture than that.”