Energy costs in Cambodia are one of the highest in the region and savings potential has hardly been exploited so far. The result is disadvantages for the competitiveness of Cambodian export industries. Energy-intensive sectors such as rice processing and the textile industry are particularly affected. The latter accounts for almost 80 percent of exports, with an estimated total value of eight billion US dollars per year. Producers working for international fashion brands are experiencing increasing pressure, as buyers expect textile manufacturers to comply with sustainability standards. The adoptation of energy efficiency technologies can reduce energy consumption, thus energy expense and alongside reduce emissions.

Less energy consumption means competitive advantages

Using outdated technology with high energy demand combined with high energy costs leads to inefficiencies. Neighbouring countries with more efficient industries and cheaper energy costs become more attractive for brands. Thus, Cambodian industries must keep-up with the market demand. At the same time, Cambodia's hunger for energy is growing. In industry alone, electricity consumption increased more than tenfold between 2009 and 2019, and this trend is continuing.

Energy demand is to be significantly reduced

The government wants to address the energy demand with its National Energy Efficiency Policy (NEEP). By 2030, total energy consumption is to be reduced by 19 percent, and in industry by as much as 20 percent. Among other things, retrofits in the commercial and industrial sectors, saving technologies and services are to contribute to this. So far, however, there are only a few specialist companies on site that can provide the necessary services.

To reap the benefits of energy-efficient management in the near future, Cambodian companies will be able to draw on foreign expertise. Above all, cooperation with German partners is a good idea, as Germany is a front runner in energy efficient technologies and has a lot of experience and up-to-date know-how in the areas of energy efficiency, climate-friendly energy, and storage technologies. Numerous companies have specialized in these sectors. Many are interested in investing in Cambodia and sharing their knowledge. Cambodian companies can benefit from cooperation with German energy efficiency experts by reducing costs and improving their competitive position.

Using German specialist knowledge

The Project Development Programme (PDP) is helpful in establishing contact with German specialist companies and in international project partnerships. Using German expertise for global climate protection is one of the main objectives of the programme within the framework of the German Energy Solutions Initiative of the German Federal Ministry for Economic Affairs and Climate Action (BMWK). PDP teams are represented in the programme's partner countries, and there is also a PDP office in Cambodia.

PDP strengthens local partners in saving energy and expanding renewable energies through information, training, consulting, technical and financial analyses as well as project pre-developments. On request, the team establishes contacts with qualified technology and service partners. "We advise our partners neutrally and free of charge on optimum Energy Efficiency technologies based on each company's requirements," emphasizes Vabotra Chea, advisor and country representative of the project development programme in Cambodia. In the Kingdom of Cambodia, PDP has already implemented photovoltaic projects in the order of more than two megawatts together with German and local partners, and more are planned.

German Training Week presents expertise

For the first time this year, the PDP team organized a German Training Week (GTW) in Phnom Penh. It presented an opportunity to explore the legal, technical and financial framework conditions of energy efficiency projects to more than 30 participants from ministries, the energy sector, industry and commerce in Cambodia. Representatives of German specialist companies for energy efficiency were employed as workshop leaders. In this way, the Cambodian participants were able to get an impression of the German expertise and already forge initial contact to possible project partners.

40 percent savings potential

A current sector analysis of the project development programme shows in detail the potential of energy efficiency measures for industry and commerce in Cambodia. It sheds light on the political, economic and technical prerequisites for greater energy efficiency. The study focuses on the garment and textile industry, rice processing, the construction sector and ice cream production. These industries were selected for their economic importance and their high energy requirements. They would particularly benefit from energy-saving technologies and concepts. For each of the industrial sectors considered, the analysis provides concrete information on energy efficiency applications.

The authors of the study see great opportunities for reducing consumption and costs: Industry, commerce and buildings in Cambodia can save up to 40 percent of electrical and thermal energy. So far, this potential has hardly been exploited at all due to a lack of know-how, capacities and up-to-date technologies.

Energy efficiency is likely to be boosted by the government's NEEP initiative. It creates additional incentives for investment and aims to create planning security. It is intended to help attract foreign expertise.

"In coming years, we expect more projects and activities to happen in the area of energy efficiency in Cambodia," says PDP Country Representative Vabotra Chea. He therefore advises those responsible in industry and commerce to deal with the topic in good time to achieve competitive advantages and reduce costs: "Energy efficiency should be a top priority for companies. Our experience shows that companies benefit from an analysis of their energy consumption and improvement measures in the short term. Companies that do not take measures, on the other hand, will have a hard time in the long term."