Cambodia presents the ideal conditions for a prosperous solar sector, including plenty of daylight hours, increasing levels of energy consumption due to rising living standards and a lack of cheap energy options.
Khmer Times’ May Kunmakara sits down with Warren Lee, business development manager for Southeast Asia at Jinko Solar, a firm based in Shanghai. They discuss the company’s investment plans in the Kingdom’s nascent solar energy market.
KT: Why should people invest in Cambodia’s solar energy sector?
Mr Lee: I think Cambodia has great potential in the solar energy sector. In addition to excellent solar irradiation, local electricity demand is still increasing while the cost of electricity is relatively high due to a reliance on imported coal.
The current share of solar energy in the market is so tiny it is almost non-existent. However, there has been a dramatic drop in the cost of setting up solar installations. This, coupled with improved capacity in the managing grid and innovations in financing, has led us to a point in which the government is aware of the opportunities here – aware that there are a lot of opportunities for what they would call a ‘win-win’ strategy.
With the government’s support, we can experience high growth, make a contribution to energy transition, and keep lowering prices so that we can move towards a more environmentally friendly system.
The Cambodian government is cautiously weighing all its options, but it is determined to give access to power to all Cambodians, preferably ‘on grid’, in the near future. The government is very determined to seize opportunities in the sector to promote inclusive growth.
KT: The Asian Development Bank plans to spend more than $100 million to build a solar park in Cambodia. What do you think about this project?
Mr Lee: This project will help Cambodia bring clean, affordable, and locally-sourced power to meet its growing energy needs. ADB will also be advising on the structuring of a national solar park programme and a competitive process of procuring power, including developing a feasibility study, a bankable public-private partnership (PPP) model, and organising a competitive tender process to select a suitable private sector sponsor for power generation. Moreover, ADB will provide climate financing.
All this will serve as an example for solar PPPs in Cambodia and in other parts of Southeast Asia.
KT: High electricity costs is one of the main barriers to attracting foreign direct investment in Cambodia. What can be done to reduce electricity costs?
Mr Lee: Grid parity has become the norm across the world, especially in regions blessed with abundant solar resource and heavy reliance on imported coal or gas to generate electricity. So solar investments in Cambodia are very promising and have the potential to bring down electricity costs.
KT: Since last month, the country has been experiencing power cuts. The government says the energy shortage is the result of having high temperatures and little rain, which means hydropower dams are not able to generate as much energy as it is required. Do you think solar energy investments could reduce the chance that this happens again in the future?
Mr Lee: Yes, I do believe solar could be the solution. Like wind, water is a seasonable resource. In summer, when demand for electricity is at its peak, resources like wind or water tend to be at its lowest point. Compared to water or wind, however, solar energy is more consistent, stable and reliable.
KT: What plans does your company have for Cambodia?
Mr Lee: Jinko Solar, as the world largest solar module supplier, will be actively engaged in providing high quality and efficient solar products as well as premium pre and after sales service.
KT: Do you have plans to promote the use of solar energy in the industrial sector, particularly in garments?
Mr Lee: Commercial and industrial rooftop installations have been widely adopted across the world. Rooftop installations are an ideal way of generating and consuming power because the time that you generate electricity exactly matches the time that you use it.