VZCZCXRO8566
RR RUEHAST RUEHCHI RUEHDH RUEHDT RUEHHM RUEHLN RUEHMA RUEHNH RUEHPB
RUEHPOD RUEHSL RUEHTM RUEHTRO
DE RUEHPF #0027/01 0150158
ZNR UUUUU ZZH
R 150158Z JAN 10
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC 1552
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE

UNCLAS SECTION 01 OF 02 PHNOM PENH 000027 
 
SENSITIVE 
SIPDIS 
 
STATE FOR EEB/CBA/JTHOMPSON, OES/PCI/SMIRZA, AND EAP/RSP 
DEPT PASS TO USTDA/ROSSITER 
DEPT PASS TO EPA 
BANGKOK FOR REO/HHOWARD, USAID/RDMA/SWALTER, AND USTDA/DUNN 
HO CHI MINH FOR FAS/MRIEDEL 
 
E.O. 12958: N/A 
TAGS: SENV EAGR ENRG EAID EIND CB
SUBJECT: SEARCHING FOR ENERGY IN CAMBODIA'S WASTE 
 
REF: A) 09 PHNOM PENH 283, B) 09 PHNOM PENH 747 
 
SENSITIVE BUT UNCLASSIFIED 
 
¶1. (U) SUMMARY.  Although large-scale solutions to Cambodia's energy 
issues have dominated national and regional attention, NGOs and 
investors are starting to realize the energy potential in the 
country's farms, trash bins, and landfills.  Studies estimate a 
potential generation of 18,852 GWh per year from all biomass waste 
products, even half of which is comparable to several of Cambodia's 
planned hydropower dams.  The Royal Government of Cambodia (RGC), 
NGOs, and private investors have begun to explore this potential 
through small pilot projects, such as biogas from rice husks, char 
briquettes from coconut waste, and methane capture from livestock 
and landfills.  With the right support from the U.S., for example 
through the U.S.-Lower Mekong Initiative (LMI), Cambodia could 
further develop its clean energy potential, saving money and 
greenhouse gas emissions.  END SUMMARY. 
 
CAMBODA'S ENERGY SECTOR:  WOOD AND DIESEL 
------------------------------------------ 
 
¶2. (U) Most Cambodians lack access to reliable energy supplies, 
making cooking and transportation the primary forms of energy 
consumption.  Wood alone drives 80% of Cambodian energy use, 
partially for commercial purposes but primarily through direct 
burning or charcoal combustion in domestic cooking stoves, a 
traditional Cambodian preference.  According to environmental NGO 
Geres, 90,000 tons of wood charcoal feed Phnom Penh's annual energy 
demands alone.  A 2009 Geres study found that Cambodia's garment 
industry also consumed significant quantities of wood -- over 2 
million cubic feet each month -- to produce steam for ironing and 
dyeing clothes.  This heavy use of firewood and charcoal has 
contributed to Cambodia's deforestation rates, greenhouse gas 
emissions, and instances of respiratory illness. 
 
¶3. (U) The limited availability of electricity has similarly posed 
challenges to Cambodia's economic growth, environment, and health 
sectors.  Only about 18 percent of the population is connected to 
the electricity grid, which runs on diesel generators, and only 
major urban areas have power 24 hours a day.  Rural Cambodians pay 
among the world's highest prices for their electricity at as much as 
50 to 60 cents per kilowatt-hour, compared to an average of 10 cents 
in the U.S.  RGC officials complain, rightly so, about how the cost 
of electricity is a barrier to attracting industry and investors and 
limits services that facilities like health centers can provide. 
 
CAMBODIA'S POTENTIAL FOR ENERGY FROM BIOMASS 
-------------------------------------------- 
 
¶4. (U) The RGC has emphasized large-scale energy solutions such as 
hydropower dams to address its energy issues.  According to multiple 
studies, however, biomass such as agricultural and municipal waste 
has the potential to become another significant, sustainable energy 
source; waste biomass can be used by direct combustion or can be 
converted into biogas or a range of liquid biofuels.  A 2004 study 
by the Cambodian Ministry of the Environment (MOE), the Cambodian 
Research Center for Development (CRCD), and the Institute for Global 
Environmental Studies in Japan (IGES) estimated a potential 
generation of 18,852 GWh per year from waste products alone.  (NOTE: 
This figure assumes that all waste products would be used for energy 
generation, which is unlikely.  However, according to the same 
study, the production potential of 20 proposed hydropower projects 
showed a combined annual generating potential of only 8,839.97 GWh 
per year, so even half of Cambodia's biomass potential could be 
significant in comparison.  END NOTE.) 
 
AGRICULTURAL CASTOFFS MADE INTO ENERGY 
-------------------------------------- 
 
¶5. (U) Through small pilot projects, NGOs and private investors have 
recently begun to explore the most appropriate mechanisms for 
biomass energy production in Cambodia.  Social enterprise SME 
Renewable Energy, for example, started in 2005 and now has 30 
clients running biogasifiers on fine grains, corn cobs, and rice 
husks, which still release greenhouse gas emissions, although at a 
reduced rate.  SME's clients include rice mills, ice plants, brick 
factories, and hotels.  SME Managing Director Rin Seyha explained to 
ESTHOff that with a little help on upfront investments, primarily in 
the form of better interest rates on business loans, enterprises 
that took advantage of energy production from biomass could realize 
substantial long-term savings.  An average 2 ton per hour rice mill 
could reduce its diesel consumption by approximately 15,800 gallons 
of fuel per year, a savings of $30,000.  SME's 30 clients have 
collectively reduced diesel consumption by up to 527,000 gallons per 
 
PHNOM PENH 00000027  002 OF 002 
 
 
year, saving them $750,000 to $1 million and over 6,000 tons of 
carbon dioxide emissions, all by using materials that were 
essentially garbage as fuel. 
 
GREEN COOKING WITH COCONUT CHARCOAL 
----------------------------------- 
 
¶6. (U) Other organizations have begun to confront the issue of 
charcoal usage for cooking.  For example, in 2004 Geres started to 
develop char briquettes from coconut waste and other industrial 
charcoal residues.  The production process is energy efficient, with 
heat from the burning process being recaptured in a funnel and used 
to dry the waste biomass.  When Phnom Penh's primary landfill, Stung 
Meanchey, closed in 2009, Geres established a new "Sustainable Green 
Fuel Enterprise" near the site to produce and commercialize the char 
briquettes. 
 
¶7. (U) The enterprise set a production target of 1,100 pounds of 
briquettes each day by the end of 2009, with plans to double 
production by 2011.  Although the price of the briquettes is 
currently slightly higher than that of traditional charcoal, Geres 
has noted that average charcoal prices have increased significantly 
from year to year (up 240% between 2007 and 2008 alone) as wood 
becomes more difficult to procure, so the briquettes will steadily 
become more competitive.  This small enterprise alone, if 
successful, will reduce Cambodia's carbon emissions by an estimated 
1,604 tons per year and employs up to 16 local residents. 
 
CAPTURING METHANE FROM FARMS AND LANDFILLS 
------------------------------------------ 
 
¶8. (U) According to the MOE, the Cambodian agriculture sector 
contributes about 18% of the country's greenhouse gas emissions. 
Methane-capture projects that would lower some of these emissions 
have been slower to take off but still represent another potential 
source of biomass energy.  One of the MOE's Clean Development 
Mechanism (CDM) projects, for example, is a methane-capture project 
at a pig farm in Kandal Province.  Under the project, the Samrong 
Thom Animal Husbandry piggery uses an anaerobic reactor digestion 
system to capture methane generated from the facility's waste water, 
which is then used to fuel a generator to supply electricity to the 
farm.  The second phase of the project will expand production to 
supply electricity to other local users through a rural electricity 
enterprise (REE). 
 
¶9. (U) A German company has also explored potential methane-capture 
schemes using organic and municipal waste at the Stung Meanchey 
landfill, which could potentially supply enough electricity to serve 
3,000 families.  A company spokesperson said that the project would 
be implemented over the next 15 years.  However, Toch Sovanna, 
Director of the Ministry of Industry, Mines, and Energy's (MIME) 
Renewable Energy Department, said that as of year's end the company 
was still looking for partners with whom to implement the project. 
 
 
COMMENT 
------- 
 
¶10. (SBU) There has been significant attention paid to Cambodia's 
large-scale energy development plans, but the kinds of energy 
solutions that deliver the most benefits to average Cambodians are 
smaller, more localized generation programs.  The LMI provides an 
opportunity for the USG to support expansion of these types of 
solutions.  For example, Post is encouraging Cambodia under the LMI 
to join the International Methane to Markets Partnership and would 
welcome Department support to expand U.S. Environmental Protection 
Agency or other USG technical support for the Partnership in 
Cambodia. 
 
¶11. (SBU) The Cambodian government may also benefit from learning 
about other countries' experiences in rolling out small-scale 
renewable energy technologies.  For example, Post invited an 
American expert on regulations that promote Very Small Power 
Producers (VSPPs) to present at the recent USG-sponsored GMS Energy 
Conference (Ref B); RGC officials subsequently expressed interest in 
exploring VSPP regulations for Cambodia.  An exchange where RGC 
energy officials could see Thailand's VSPP program in action could 
be a useful activity to advance the initiative. 
 
 
RODLEY