Mediterranean Action Plan

III. – NATIONAL STUDY
BOSNIA & HERZEGOVINA - – National study
1. Introduction – Short summary of the situation in energy sector
Bosnia and Herzegovina (BiH) has experienced massive economic and political changes since the
collapse of the former Yugoslavia in 1992. Currently, the country is largely decentralized and consists
of two state-like entities, the Federation of BiH (Federation), and the Republika Srpska (RS) and
District Brčko. The Federation is further decentralized and made of ten cantons.
The complexity of political and organizational structures extends to the energy sector where
the state-like entities own and oversee three electric power companies, an oil refinery,
natural gas transmission and distribution utilities, and coal mines. District heating facilities fall
under the responsibility of municipal (RS) and cantonal governments (Federation). This is a
unique arrangement that has emerged as a consequence of the complex political situation.
Some of the major problems facing the energy sector in BiH today include an unclear
authority over energy issues, the absence of a long-term energy strategy on the state level,
and the absence of energy statistics and laws. BiH is lacking the legal and political basis for
efficient decision-making and for delegation of responsibilities for energy and energy
efficiency to different levels of government.
According to available data, production and consumption of energy and the condition of
energy infrastructure have not yet reached the pre-war level. With the existing level of energy
intensity, more than 20 percent of national GDP is spent on energy, a clear indicator that
significantly more attention has to be paid to energy efficiency.
BiH satisfies its electric power needs in total with the production of electricity from its own
power stations (10.8 TWh in 2002), using for that its available hydro potential and coal
resources. The situation of domestic consumption enables also the export of part of
generated electricity, which in 2002 was 1.1 TWh. About 60% of electricity has been
generated in thermo power plants, and the other 40% in hydro power plants. The available
hydro potentials have been estimated to possible annual production of approx. 22,000 GWh,
while the coal reserves are over four billions of tons. The production of electric energy on
today’s level is sufficient for satisfying B&H own needs in short-term time period.
The overall power production system is in the process of separating on production,
transmission and distribution of electricity, in accordance with the European standards.
By adoption of the Law on establishment of the Independent System Operator for
transmission system in BiH and by adoption of the Law on establishment of the Electricity
Transmission Company in BiH, the legal framework on State level has been realized for the
regulation of the transmission segment. These laws have enabled the establishment of nonprofit
and independent system operator for the management of power transmission system
operation in BiH (NOS), as well as the establishment of the Electricity Transmission
Company ('Elektroprijenos BiH'). Regarding the work of the regulatory body, there is State
Power Regulatory Commission in B&H (DERK), with the head office in Tuzla, and the Entity
Power Regulatory Commissions with the head office in Mostar (FBiH) and Trebinje (RS).
Also, the activities on preparation of the Energy Strategy in BiH have been started, and The
Council of Ministers has already adopted the Terms of Reference for the Strategy of BiH.
In coalmines in BiH, about nine millions of tons of brown coal and lignite has been produced,
which is less then 60% of pre-war production. The coal has been used in greatest extent
(over 70%) for the needs of electricity production in thermo power plants (TPP). We can say
that the available coal reserves in BiH are sufficient for the insurance of future needs for
electricity generation.
BiH imports the natural gas from Russia, and the post-war level of gas consumption is up to
200 millions of m3.
The natural gas price in BiH on distribution level is the largest in South East Europe.
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