Heng KunleangDeputy Director

Energy Development DepartmentMinistry of Industry, Mines and Energy

Taipei, April 4-7, 2005

ETSAP Annex IX Technical ConferenceEnergy Models Users’ Group, Global and

Regional Energy Modelling

Analysis of Power Supply Options for the Interconnected Grid

Country Profile of Energy Sector• Territory: 181,035 sq. km • Borders: THL-West, VN-East, LAO PDR-North,

Gulf-south• Population: 12 million• GDP US$ 280 per capita

• Lowest energy consumption : 45 kWh/capita• Highest electricity price in the region• High potential of hydroelectricity:

10,000 MW in northern and 1,000 MW in WesternLong distance between sources and load center: Difficult to developed

Country Profile of Power Sector (continued)

• Main Energy consumption: Wood• Electrification rate:

– Connect to the grid: 15%• Urban: 53.6%, Rural: 8.6%• Tariff: US¢ 9 – 25 per kWh

– Rural generation and battery: 35%• Tariff: US¢ 40 – 80 per kWh

• Principal generation Fuel Oil (DO and HFO)• Main consumption sector: Household

Installed electricity capacity in 2000, MW

Medium Speed Diesel

34%

High Speed Diesel

27%

Steam13%

Hydro1%

Low Speed Diesel

25%

Average Daily Load Curve by Month

30

40

50

60

70

80

90

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

January February March April May June July August September October November December

Source: EDC 2004

Current Structure of Electricity Sector

Cambodia's Electricity BusinessEDCPEU PECIPP

Ownership of EDCPolicy; Planning; Development; Technical standardTariff, license, Review the Planned Investments,finances and performance; Enforce the regulations, rules and standards

Royal Government of Cambodia

Ministry of Industry, Mines and Energy

Ministry of Economic and Finance

OwnerPolicy maker

Electricity Authority of Cambodia

Regulation

To provide an adequate supply of energy throughout Cambodia at reasonable and affordable price,

To ensure a reliable and secured electricity supply at reasonable prices, which facilitates the investments in Cambodia and developments of the national economy,

To encourage exploration and environmentally and socially acceptable development of energy resources needed for supply to all sectors of Cambodia economy,

To encourage the efficient use of energy and to minimize the detrimental environmental effects resulted from energy supply and consumption.

Power Sector Policy

Cambodian Power Development Plan (2004-2008)

Promoting Private sector Participation in these development is needed

• 2004: Commissioning 10 MW HFO in Siem Reap (Japanese Grant Aid).• 2005: Develop an IPP-KEP of 32 MW• Import from Thailand for North-Western Grid• 2006: Expect to add 10 MW HFO (Japanese Grant Aid).

• 2007: Import from Vietnam 80 MW for the first step from Thailand 20 MW

• 2008: Commissiong of Kirirom III 13 MW Hydropower Plant

Representation of electricity system

Grid interconnection

Grid expansion to rural areas

HV imports/exports

MV imports

Phnom Penh

North-westNorth-east

South-west

Rural areas Rural areas

Rural areas

Rural areas

Vietnam

Vietnam

Thailand

Electricity Demand Forecast - GWh

0

2000

4000

6000

8000

10000

12000

14000

16000

2000 2005 2010 2015 2020 2025 2030 2035

Year

North West (isolated) North East (isolated)South West (isolated) Phnom Penh (isolated)interconnected system

Seasonal and Diurnal Time Definitions

08:0000:00OctoberMayOff peak - WetW-N

22:0018:00OctoberMayPeak - WetW-D

08:0000:00AprilNovemberOff peak - DryS-N

22:0018:00AprilNovemberPeak - DryS-D

00:0022:00

18:0008:00AprilNovemberPartial peak - DryI-N

00:0022:00

18:0008:00OctoberMayPartial peak - WetI-D

ToFrom ToFrom

TimeSeasonDescriptionTime

Slice

MARKAL Representation of the Electricity System

Thailand

Vietnam Transmission Electricity

Distribution Electricity

InterconnectedConsumer Electricity

Transmission Grid

Distribution Grid

Interconnected Consumer Demand

HV Generation

MV Generation

On-Grid Rural

Demand

Rural Supply Options

North West Electricity

North WestDemand

North EastDemand

South WestDemand

Phnom PenhDemand

North East Electricity

South West Electricity

Phnom Penh Electricity

Off-Grid Rural

Demand

Rural Supply Options

North East Generation (isolated)

North West Generation (isolated)

South West Generation (isolated)

Phnom Penh

Generation (isolated)

LV Generation

Laos

MARKAL Modelling of Electricity TradeEXP-ID Export , wet shoulderEXP-IN Export, dry shoulder

HV HYDRO EXP-SD Export, dry peakGEN EXP-SN Export, dry off-peak

EXP-WD Export, wet peakEXP-WN Export, wet off-peak

IMP-ID Import , wet shoulderIMP-IN Import, dry shoulderIMP-SD Import, dry peakIMP-SN Import, dry off-peakIMP-WD Import, wet peakIMP-WN Import, wet off-peak

MV GEN LV GEN

HV THERMALGEN

ILC ILCL

Constraint Constraint FIXG FIXT

EDGRID ECGRID DEMAND

IDSITS

ELINKE

ELINKI

ETGRID

ELINKH

Thermal Installed Capacity (MW) - Case - BASE - Base data - Crude 40$/bbl - No trade

0

500

1000

1500

2000

2500

2000 2005 2010 2015 2020 2025 2030 2035

Middle speed diesel (fuel oil) Private diesel Low speed diesel (Fuel oil)Middle speed diesel (diesel) Oil steam (Phnom Penh) New oil steam (Sihanoukville)OCGT (diesel) HV High speed diesel OCGT (diesel) MVCCGT (gas) CCGT (Dsl) OCGT (gas) HVOCGT (gas) MV

Hydro Installed Capacity (MW) - Case - BASE - Base data - Crude 40$/bbl - No trade

0200400600800

100012001400160018002000

2000 2005 2010 2015 2020 2025 2030 2035Kirirom hydro Stung Atay hydro Sambor hydro (storage) Lower Russey Chrum hydro

Lower Sre Pok 2 hydro Battambang 1 hydro Battambang 2 hydro Upper Russey Chrum hydro

Lower Sesan 2 hydro Kamchay hydro Battambang 3 hydro Middle Russey Chrum hydro

Stung Cheay Areng hydro Stung Metoeuk hydro Stung Tatay Sambor hydro (run of river)

Capacity Balance (MW) - Case - BASE - Base data - Crude 40$/bbl - No trade

0

500

1000

1500

2000

2500

3000

3500

4000

2000 2005 2010 2015 2020 2025 2030 2035

Thermal Hydro Import Peak Demand

Long Run Marginal Costs at Consumer LevelConsumer LRMC contributions by time slice (Usc/kWh) - Case - BASE - Base data - Crude

40$/bbl - No trade

0.00

2.00

4.00

6.00

8.00

10.00

12.00

2000 2005 2010 2015 2020 2025 2030 2035

Dry Peak Dry Shoulder Dry Off-peak Wet Peak Wet Shoulder Wet Off-peak

Electricity Imports by Time Slice (GWh) - Case - IN50 - Electricity import w ith no capacity credit

0

500

1000

1500

2000

2500

2000 2005 2010 2015 2020 2025 2030 2035Dry Peak Dry Shoulder Dry Off-peakWet Peak Wet Shoulder Wet Off-peak

Electricity Import Capacity (MW) - Case - IN50 - Electricity import w ith no capacity credit

050

100150200250300350400450500

2000 2005 2010 2015 2020 2025 2030 2035Import Maximum

Import Energy and Capacity Contributions

Hydro Installed Capacity (MW) - Case - X87 - Export energy 87%

0

1000

2000

3000

4000

5000

6000

2000 2005 2010 2015 2020 2025 2030 2035Kirirom hydro Stung Atay hydro Sambor hydro (storage) Battambang 2 hydro

Sambor hydro (run of river) Middle Russey Chrum hydro Lower Russey Chrum hydro Lower Sre Pok 2 hydro

Battambang 1 hydro Upper Russey Chrum hydro Stung Cheay Areng hydro Lower Sesan 2 hydro

Kamchay hydro Battambang 3 hydro Stung Metoeuk hydro Stung Tatay

Hydro Development Scenario for Optimum Exports

CONCLUSIONS

1. System expansion Using Existing Supply Options• Cambodia has the highest electricity generation cost in the region

• There is a substantial potential for developing local hydro, to operate in conjunction with the thermals. The hydro production is seen to be extremely seasonal, with the price of electricity still dictated by the HFO diesel plant in the dry season and the wet season peak. Due to this reason, even with the full flexibility of hydro development, the marginal electricity costs at consumer level is seen fall only to around 8 USc/kWh.

• The seasonality of hydro generation indicates a strong possible electricity export potential in the wet season.

CONCLUSIONS (Cont.)2. Electricity Trade Options

• Due to the strong seasonality of hydro generation, electricity imports are only viable in the dry season and exports only in the wet season.

• With the import capacity limit of 15% of total generation, for maximum imports during dry season only, the long run average incremental value of imports is about 7.8 USc/kWh with only HFO diesels providing the thermal alternative in local generation. This means that Cambodia stands to gain for any negotiated import price of less than this amount for maximum imports during the dry season from 2010.

• The long run incremental cost of electricity exports for a 3000 MW export capacity with maximum exports during the wet season only is around 1.7 USc/kWh. This means that Cambodia stands to gain for any negotiatedexport price of more than this amount for maximum exports during the wet season from 2020.

Thank you for your attention