The Federation of Bosnia and Herzegovina, once a stable producer of electricity, is now occasionally becoming a net importer, which, according to experts and officials, is unacceptable.
The decline in electricity production by as much as 23 percent in the last four years is the result of decades of negligence, a crisis in mines, and outdated thermal power plants. The problem has escalated, and the Government of the Federation of Bosnia and Herzegovina is saying that the energy sector must be urgently repaired.
Federal Minister of Energy, Mining and Industry Vedran Lakić is saying that “we no longer have the right to improvise”, while Prime Minister Nermin Nikšić emphasizes that “energy independence is a strategic goal”.
The question is, is there a solution?
“We occasionally become a net importer of electricity, and this is something that we should never have allowed. This is a red alert that the energy sector has been managed for years in a haphazard, unplanned and political manner, not strategically”, warns Minister Lakić.
What led us to import?
The picture of domestic electricity production in the Federation has been bleak for years. In the last four years, a drop in production of as much as 23 percent has been recorded, and the reasons for this are multifaceted. Thermal power plants are largely outdated. Thermal power plants, even when they are in operation, operate at less than 70 percent of capacity. At the same time, thermal power plants lack about 1.5 million tons of coal per year, which further limits their efficiency. The mines are in deep crisis.
The seven mines operating within the group have recorded total losses exceeding 1.1 billion convertible marks. An additional challenge is the excessive reliance on hydropower, which makes us particularly vulnerable in the face of climate change and increasingly frequent hydrometeorological extremes.
In addition, the situation that the new management found in Elektroprivreda BiH, as Prime Minister Nikšić says, was catastrophic. A debt of 140 million BAM was found in a company that should be profitable by all parameters. Also, coal production in the mines has fallen drastically. In addition to technological obsolescence, an additional cause is the reckless and unstrategic takeover of all mines by EPBiH, which led to a crisis in both the mines and Elektroprivreda.
That is why the Government of the Federation of BiH has finally recognized the depth of the problem, both rhetorically and strategically.
Prime Minister Nermin Nikšić says that no more time can be wasted.
“For the first time in 30 years, the Government held a thematic session dedicated to energy. This is a sign that we will not ignore things. This Government has a plan, but we are also seeking international support to implement it,” Nikšić explained to Fena.
What is being done (finally)?
Although the decline in domestic production is already worryingly visible, important steps have been taken in the past year towards stabilising and reforming the energy sector. Key laws have been adopted that open up space for long-awaited reforms, while the law on the electricity regulator has finally been agreed at the state level, and its adoption by the Council of Ministers of BiH is expected soon.
In parallel, the first major projects from renewable energy sources have been launched, including solar and wind power plants. The Federation has also secured a loan from the World Bank in the amount of 72 million euros for a just energy transition, and in cooperation with the UNDP, 11 strategic studies are currently being prepared that should serve as a basis for further planning and decision-making in the energy sector.
However, the most significant move so far has been the closure of the RMU Zenica, which was a painful but inevitable signal that mining policy can no longer be based on maintenance with budget money.
What awaits us?
According to Minister Lakić, the rehabilitation of the most critical facilities is planned by 2027, and a gradual gas transition and a switch to more sustainable sources by 2030. The goal is for BiH to become energy decarbonized and completely energy independent by 2050.
Among the most urgent tasks identified by the Government is the revitalization of thermal power units, which have been neglected for years and are currently operating below their capacity. At the same time, a significant increase in coal production by an additional 1.5 to two million tons per year is planned in order to ensure sufficient quantities for thermal power plants.
“The energy sector also expects a serious personnel renewal, with the aim of increasing efficiency and responsibility in management. A special focus is placed on the diversification of energy sources, which means that we must no longer rely on only one type of resource, but energy should be drawn from a combination of thermal, hydro, solar and wind potential. The Federation also plans to improve the gas connection with Croatia through three strategic connections, southern, northern and western, in order to reduce energy vulnerability. Finally, the modernization of the hydropower system, especially the pumping hydroelectric power station “Capljina”, is considered crucial for the stabilization of domestic production and better utilization of existing resources,” Minister Lakić explained.
We still have a chance
In addition to the concrete measures that have already been initiated, the authorities now have the task of implementing them consistently and turning them into tangible results, at a pace that corresponds to the urgency of the situation.
As Prime Minister Nikšić claims, the FBiH Government has a plan and knows in which direction it should go.
“Energy independence is a matter of strategic security. “If we lose production capacities and rely on imports, we lose not only control over the system, but also the opportunity to put energy into the function of development. But we have serious challenges ahead of us. The key will be in capacities, determination and speed of action,” concluded Prime Minister Nikšić, Fena writes.
