Intended and Unintended Outcomes of RE Projects in Laos and Cambodia: Stories from the field

1. Intended and Unintended Outcomes of RE Projects in Laos and Cambodia: Stories from the field Hanna Kaisti, Finland Futures Research Center Seminar on Energy Policy, Climate Change and Ecological Democracy in the Mekong Region, 3 November, 2008

2. Content • Cambodia – current situation, government targets and how to get there • Three examples of RE projects in Cambodia • Laos – current situation and targets. • “Is there other than large hydro power?” • Challenges yes, but what are the solutions?

3. Cambodia • Wood and char coal main source of energy • Overall electrifiration rate ~ 20 % • 87% of electricity used in Phnom Penh, 5 % in Siem Riep, 8 % in rest of the country • Electricity is expensive • Now 200 megawatts

4. Government targets • By 2013: 70 % of people have access to grid quality electricity • By 2020: electricity in all villages

5. How to achieve the targets? 1) Electricity import from neighbouring countries; 2) develop hydro power; 3) develop other renewable energy sources Funding: Donors, government lending, private investors

6. Future plans in Cambodia • ”900 megawatts in 2012” (Tun Lean, MIME) • Connection grids from Thailand, Vietnam & Laos (ADB projects) ~ 180 MW • 3 new hydropower plants ~330 MW • Coal power plant, Sihanoukville 200 MW Also: Transmission lines needed to connect all provinces in Cambodia. Now no national electricity grid but 21 isolated systems

7. Government’s long term plans: Hydropower! • ”In Cambodia 10 000 MW hydro power potential” (Heng Kungleang, MIME) • At the moment 13 project feasibility study permissions to analyse hydro power sites

8. For large hydro, investments come from China Fear that there will be lower environmental & social standards than in WB projects

9. RE projects in Cambodia Donor funded RE projects include: • Solar home systems • Domestic biogas • Wood gasification project • Improved cooking stoves to save fuel wood Wind is not seen as potential except in the coast

10. Domestic biogas programme • SNV (the Netherlands) has biogas programmes both in Cambodia and in Laos • Uses dung and other organic matter • Target in Cambodia 17.500 households, in Laos smaller scale

11. Suitable for better-off families with cattle or pigs • 2 (big) cows or 5 pigs is the bare minimum • To operate a small biogas plant 20 kg dung is needed • According to the SNV 25% of rural population in Cambodia has technical potential to install a biodigester

12. Biogas plant can function more than 20 years, only little maintenance • Gas used mainly for cooking ( + lighting), slurry as organic fertilizer • Investment costs 300 – 400 euros; villagers’ share: 15-50%

13. Have you ever been inside of a biodigester?! (this one was empty, fortunately!)

14. Wood gasification project • Community energy cooperative in Anlong Tamey village • SME Cambodia, UNDP, Canada Fund... • Initial cost of required equipment covered by grants • Cooperative members pay 2-5 USD / month for electricity • Source of biomass: locally farmed trees + corn cores

15. 200 kg of wood + 200 kg of corn per day • Problems: during wet season 10 000 kg of wood per month is bought from outside (180 USD) • Village needs more electricity than the gasifier can provide: constant power cuts • Has not really increased livelihood options

16. Fuelwood saving project: Improved cooking stoves • Geres (France) • Improved cooking stoves, reforestation, developing sustainable char coal from agricultural waste • A small project

17. Most households use wood or charcoal for cooking, even in urban areas “Charcoal is illegal but still 100.000 tons of charcoal are used in Phnom Penh alone. And they are not replanting the trees. They will be soon finished.” Rogier van Mansvelt, WB consultant

18. Improved stoves saves wood and charcoal • Stoves are a bit more expensive than the traditional stove (1.25 $ - 3. 75$) • Widely used in cities (30% of all stoves) but not in rural areas

19. The production costs are higher than in the traditional one -> less profit for the producer -> problem in Phnom Penh: donors’ subsidies are distorting the markets

20. Laos • Wood and char coal main source of energy • Electrification rate 58 %, in rural areas 20 % • Electricity is cheaper than in Cambodia • Plans to increase the electricity export to Thailand, Vietnam, Laos, China in the near future • Electricity from large hydro power plants is seen as the most important commodity

21. Government targests • 70% electrification rate by 2010 • 90% electrification rate by 2020 Plus the agreements with Thailand and Vietnam to export 7000 MW “ Until 2010 it will be difficult to reach these targets, but after Nam Theun 2 is completed we will have more money to invest in the gird extension.The money will come from selling the electricity from Nam Theun 2.” (Bouathep Malaykham, MEM)

23. “We will have many-many hydro power plants in the future, more than 50 medium and big ones, all over the country.” (Bouathep Malaykham, MEM)

24. Large hydro plant investors from France, Thailand, Vietnam, China… • Long agreements to export electricity • Electricity mostly exported, profits will also go to the investors “Power trade is good for Laos. It is an opportunity. And, besides, what other income do we have? Tourism?” (Prof. Khamphone Nathavong, NUOL)

25. Rural electrification programme(Anousak Phongsavath, Rural electrification division, MEM) • World Bank: grid extension and off-grid programme (solar home systems) • Asian Development Bank: grid extension • Nedo (Japan): Houay Xe hybdid system

26. Solar Home System in Laos • World Bank’s programme (lending to government) • 9000 households now • Different sizes – 50 watt solar panel costs 3$ per month: Enough for 3 lamps, TV and CD (2-3 hours per day)

28. Problems • Batteries: expensive to buy a new one every 2-3 years • Maintenance • Theft of panels in the public sites

29. Paying for the panel or for the service? • Payment obligatory irrespective of use – difficulties for the poorest families • E.g. slash and burn cultivators go away from the villages for months but still pay for electricity they do not use

30. Conclusions: What are the challenges for Cambodia and Laos? • In the near future Laos will be an electricity exporter and Cambodia importer • High dependency on donors and foreing investors • There are many different (failed) pilot projects: donor projects, government’s own pilot projects, research projects… Analysis needed why projects tend to fail • Often no means for upscaling • Lack of information sharing and coordination between different RE projects • Short donor projects can also destroy well-working systems (cf. Improved cooking stove case)

31. Livelihood aspects should be integrated to the energy projects – how the electricity can be used to generate income or other well-being? • RE needs subsidies: investment, operational & maintenance costs high • Needs capacity-building

32. Main source of energy is still wood but donors and governments not very interested in fuel wood saving initiatives -> improved stoves needed also in the rural areas

33. What is needed? • Good planning and information sharing • Context-specific planning, not blue print solutions • Capacity-building • Energy projects need long term maintenance and follow-up • Not an end itself: Energy projects need to be connected to another (livelihood increasing) projects

34. Pro-poor or pro-middle class approach in electrification projects? Both needed • Fuelwood saving & replantation projects in the rural areas as well • Information how much wood is consumned • And what else….? Discussion may begin!

35. Thank You! E-mail: hanna.kaisti@tse.fi