Electricity export ambitions may prove risky for Bosnia and Herzegovina, shows new study

Category: Climate Change
Published Date


26 March 2015 – Western Balkans countries, especially Bosnia and Herzegovina, have strong electricity export ambitions that create the danger of stranded assets, finds a new report launched by non-governmental organisation CEE Bankwatch Network in Sarajevo. If governments take electricity capacity expansion decisions without taking due account of developments in other countries, the region will have to compete with other nearby exporters and may find that its power plants become uneconomic.

The study was carried out for CEE Bankwatch Network by the University of Groningen and the consultancy 'The Advisory House'. The full study and background data can be found at official CEE Bankwatch site (HERE). The Bosnia and Herzegovina country report in B/H/S can be found at Ekotim site (HERE).

The study analyses the electricity supply and demand patterns of countries in the Western Balkans for the next ten years and examines their export prospects. The results show that if the countries realize their planned capacity extensions, the region will have a 56% electricity surplus in 2024, suggesting significant export ambitions. Bosnia and Herzegovina could widen its position as the largest exporter of electricity in the region (up to 20 000 GWh, more than twice the country's demand even in a high consumption scenario), followed by Serbia (18 000 GWh).
However, this is found not to be desirable, as such significant electricity capacity expansions designed to meet export demand create the danger of becoming dependent upon the export market. The export analysis shows that there will not only be competition within the Western Balkans but also from other nearby competitors such Bulgaria, Romania and the rest of the EU. Given an expected excess supply in Europe, increased competition may put pressure on export prices and increase the risk of incurring stranded assets – power plants that will become simply uneconomic to even operate. For this reason, the study suggests closely examining investments that are directed to serve export markets and to also consider the trade-off of producing or buying electricity.
The study finds a wide gap between the planned capacity and actual progress in constructing new power generation capacity. However even if Bosnia and Herzegovina only completes the plants currently under construction, it can more or less cover its demand until 2024 in case of low or medium demand growth, but needs to take additional energy efficiency measures and make use of increased regional co-operation to meet peak demand.

“This study shows that it is time for governments in the region, including the Bosnia and Herzegovina government, to re-examine their plans and go for quality not only quantity when it comes to electricity generation”, says Ioana Ciuta, CEE Bankwatch's Energy Coordinator. “Bosnia and Herzegovina is planning many more coal and hydropower plants than it actually needs or can afford, but with more attention to energy efficiency and regional co-operation to cover peak demand, the country could enjoy a much more realistic and rational energy future.”

“We can't afford to sacrifice our people's health to coal power plants and our valuable natural areas to hydropower plants, and even more so if they are destined for export markets that may or may not exist”, Rijad Tikvesa, president of Ekotim. “It's time to make a serious review of Bosnia and Herzegovina's energy plans, cut energy waste and select only those projects which are truly necessary, economically feasible and environmentally acceptable”.

The campaign "Stop the dirty energy - because the future is renewable" was created as a reaction to irresponsible and unsustainable management and planning of power system in Bosnia and Herzegovina, which largely rely on extremely dangerous and dirty energy source - coal. The campaign conducted by the organization Centre for Environment (Banja Luka), the Centre for Ecology and Energy (Tuzla), Ekotim (Sarajevo).

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