Energy Situation in Both Bosnian Entities Stable | Beta Briefing

Energy Situation in Both Bosnian Entities Stable

Source: Beta
SEE Business / Bosnia | 11.11.21 | access_time 18:17

Electricity, energy (Pexels)

The Republika Srpska and Muslim-Croat Federation authorities have said that the energy situation in the country is stable, despite the global energy crisis. 

“The energy situation in RS is completely stable. Our system is capable of continuously supplying sufficient quantities of energy to all buyers, both households and non-households and there is no plan to increase prices,” the RS Ministry of Energy and Mining has told BETA.

Muslim-Croat Federation Assistant Minister of Energy Halid Balavac has said that electricity supplies in the entity are regular and that there is even enough electricity to export.

“There is no shortage, we can sell electricity” to other countries, Balavac said, adding that there was a plan to build another hydropower plant called Jablanica.

Speaking on the possible lifting of prices he said that, “There are two planes here,” because electricity prices depended on the global market, but that the entity had decided to maintain electricity prices for households until the end of the year and that prices for the industry would go up.

The new prices for companies in the Federation could go up by 70% to 125%.

Balavac stressed that certain producers in Bosnia and Herzegovina, such as the Zelenica steel mill, had raised the price of steel even though electricity prices had remained the same.

“They raised the price of their products and are making a profit. This is why the price of electricity for them will be increased.  We are talking about 20% of buyers of electricity in the Muslim-Croat Federation,” Balavac said.

The Association of Employers of the Muslim-Croat Federation has already reacted to the announced price hike warning that it would be an additional impact on the economy, stressing that electricity for companies increased annually by about EUR100m.

Some firms, which use electricity as a raw material, such as the car industry, have announced bankruptcy next year as a result of the increase.

The Serb member of the country’s Presidency, Milorad Dodik, has announced that RS has a surplus of electricity and that it is ready, if necessary, to deliver electricity to Serbia.

He said that the price of electricity in RS was lower by 25% to 40% compared with the Federation and by as much as 80% compared to Croatia and also cheaper than in Serbia.

The price of power for households in RS is EUR25 per MWh (megawatt hour) and EUR39 to EUR60 for companies. The price of electricity in the Federation for households is EUR32 per MWh and EUR50 for corporate clients.

Households in the Federation, however, enjoy 96 hours of “cheaper” electricity weekly as opposed to 88 hours in RS. 

Cheaper electricity is available in RS only at night as opposed to the Federation where lower electricity prices are available during part of the day.

The prices of electricity are defined by tariffs and the price of a KWh (kilowatt hour) of electricity depends on the tariff group, season and lower daily tariffs.

Tariffs are defined by the regulatory commission for energy of the Federation and RS, while electricity bills are determined based on consumption, grid fees, fees for renewable energy sources and a public service tax of slightly under EUR4.

In Bosnia and Herzegovina there are three public companies that deal in the production and distribution of electricity – Elektroprivreda BiH, which has 771,675 end clients, Elektroprivreda RS with 536,887 end buyers and Elektroprivreda Hrvatske Zajednice Herceg-Bosne with 196,000 end buyers.

As for natural gas, the RS Ministry of Energy has said that the entity must adapt to the situation in the market as it has no sources of gas and, hence, depends on the natural gas market.

“At this time there is no problem here either that could signal some kind of disturbance in supplies. Each year we publish a list of priority buyers and facilities” that must be continuously supplied with gas, the Ministry said.

It added that there was nothing that the Ministry could do about the higher cost of oil, except to request that traders do business in accordance with existing procedures, especially in terms of quality and that, in the event of a disturbance in the market, the RS government would react with a concrete plan.

The Muslim-Croat Federation has said that, due to a rupture on a gas pipeline in Bulgaria, which Serbia solved by borrowing 600,000 cubic meters, the entity had already begun considering storing gas.

Gas, it said, is more important to the Federation than RS because it is used to heat a considerable number of households in major cities, like Sarajevo and Zenica, while  central heating in cities in RS was based on eco heating plants that used heating oil, except for Zvornik where natural gas entered the country and a part of eastern Sarajevo.

Bosnian Minister of Energy, Mining and Industry Nermin Dzindzic has said that the Federation will have to secure gas storage facilities, for times when supplies were stopped due to problems like the one in Bulgaria.

He said that the Federation government had ordered the relevant bodies to find a model, location and capacities for storing gas.

The Federation government has already stated that the price of gas will not increase before the year is over, despite a considerable increase in gas prices globally.

The wholesale price of gas for distributors in the Federation is EUR248.7 per 1,000 cubic meters or EUR0.248 per cubic meter not including VAT.

As for nuclear energy, Bosnia does not possess a single nuclear power plant while the RS Ministry of energy has said that current situation does not allow for the use of nuclear power in Bosnia and Herzegovina.

“We currently do not have a plan for the production of nuclear energy. One of RS’s ideas is to look at sites along a larger river, like the Sava or Danube, for building a nuclear power plant together with the Federation,” the Ministry of Energy of RS said.

This would be a joint project and would provide long-term stability not just in terms of the energy sector but politically and socially as well.

On the occasion of the 1000th edition of Beta Monitor, a specialized economic bulletin focused on South East European countries, Beta News Agency is releasing a series of articles on energy available free of charge on www.beta.rs in Serbian and on www.betabriefing.com in English.

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