Bosnia and Herzegovina Country Profile

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					                                Bosnia and Herzegovina
                                               Country Profile

                                                1. Overview
                                         2. Policy and Incentives

                                                    3. Wind
                                                  4. Biomass
                                                    5. Solar
                                                6. Geothermal
                                               7. Hydroelectric

                                                   8. Links
                                                9. References
                                            10. Country Contacts

        Disclaimer: This information has been prepared for the European Bank for Reconstruction and
        Development (EBRD) by Black & Veatch (B&V) and is based on information not within the control of
        EBRD or B&V. References for information contained in this report are listed at the end of this
        document; readers should consult these references for original source material. Neither EBRD nor
        B&V has made an analysis, verified, or rendered an independent judgment of the validity of the
        information provided by others. EBRD and B&V do not guarantee the accuracy thereof. Use of this
        information contained shall constitute a waiver and release of B&V and the European Bank for
        Reconstruction and Development from and against all claims and liability, including but not limited to
        liability for special, incidental, indirect or consequential damages, in connection with such use.

1. Overview of Electricity Supply
Production in Bosnia and Herzegovina is almost exclusively based on coal and hydropower.
Most of the coal and oil used in Bosnia is imported from Russia. As of 2007, Bosnia has had
no power generated by non-hydro renewable resources (EIA, 2007). A table of basic
information about Bosnia and Herzegovina is located below. Despite the current lack of
renewable energy generation, Bosnia and Herzegovina signed the EU obligatory protocol
committing them to produce 20 percent renewable energy in comparison to their overall
energy consumption by the year 2020. Solar, wind and biomass energy are expected to have
a large roll in achieving this goal.

One major set-back to the development of the energy sector is the transmission system. The
transmission system in Bosnia and Herzegovina sustained significant damage during the war
and is still in the process of rebuilding. The former primary transmission line was a 400 kV
network spanning 800 km. This network had two primary interconnections, the Adriatic Line
connecting to Croatia, Montenegro, Serbia, and Greece, and the Northeast Line via
Ernestinovo in Croatia, which is part of the former central Yugoslavian transmission line. At
the present time neither of these interconnections is in operation, however, the system is
connected to Croatia, Montenegro, and Serbia via 220 kV lines. A considerable amount of
investment in reconstruction is required to bring the entire system back to operational status.

The following table provides summary information about Bosnia and Herzegovina.
           Demographical Information
           Population, millions (2009)                                      4.61
           Land area, thousand sq km (2009)                               51.20
           Macroeconomic Information (2008)
           GDP, billion US$                                                 29.9
           Real GDP growth rate, percent                                     5.6
           Foreign direct investment (net), million US$ (2007)            2,013
           Electricity disposition, billion kWh (2006)
           Generation                                                     12.84
           Consumption                                                      8.50
           Exports                                                          5.12
           Imports                                                          3.02
           Generation capacity, GW (2005)
           Nuclear                                                          0.00
           Thermal                                                          1.92
           Hydro                                                            2.38
           Other renewables                                                 0.00
           Total                                                            4.30
            Sources: CIA World Factbook, U.S. Energy Information Administration,
                    United Nations Conference on Trade and Development.

                                  Country Summary Table

Privatization of the energy sector is also necessary to ensure the ease of bringing renewable
energy to Bosnia and Herzegovina. The government has pursued privatization since the end
of the war in 1995. Laws on privatization strategy and implementation were passed in 1996,
1997, and 1998, with small-scale privatization beginning in 1999. As of June 2001, about 108
out of 276 small enterprises (value of less than KM 300,000) and about 530 of 1,029 medium
to large-scale enterprises were sold to individuals or privatization funds. Formal planning or
strategy on privatization is yet to be formulated for the energy industry. As of 2007, the
privatization process is still underway for the energy sector (Plan Bleu, 2007).

Bosnia and Herzegovina has four different public utilities each responsible for their own sector
of the country. The utilities are EP BIH, ERS, EP HZHB and BREKO District of BIH. The
following map shows the areas in which each of the public utilities operate. The numbered
sections indicate the company responsible for transmission in the area.
                           Utility Districts of Bosnia-Herzegovina

Total production of electricity in 2006 was 12,770 GWh while the total consumption was
12,010 GWh. Bosnia and Herzegovina is a net exporter of electricity (EIA, 2007). A table
estimating the electricity consumption from 2005 to 2020 is displayed below.

                          Estimated Final Electricity Consumption

The priority for the electricity industry in Bosnia and Herzegovina is to create efficient market
structures within clear regulatory frameworks that encourage more competitive markets for
electricity and at the same time are able to attract private investors and ensure economically
sound development of the system. This way, the electricity sector can meet electricity
demands as efficiently as possible.

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2. Energy Policy, Barriers and Incentives
Overcoming the complex political administrative situation in Bosnia-Herzegovina is a challenge
faced by investors in the energy sector.

The tariff for renewable sources with installed power up to 5 MW is 5.8 €c/kWh on the 10 kV
voltage for the BIH utility, and a 6.6 €c/kWh on the 10 kV voltage for EPNZHB utility.
Corrective coefficients have been established for

   -       Small hydro power plants: 0.80
   -       Biogas, biomass, waste dump power plants: 0.77
   -       Wind and geothermal power plants: 1.00
   -       Solar power plants: 1.10

Bosnia and Herzegovina is a signatory to:

   •   Regulation (EC) No 1228/2003 of The European Parliament and of The Council of 26
       June 2003 on condition for access to the network for cross-border exchanges in

   •   Directive 2003/54/EC of the European Parliament and of the Council Concerning
       Common rules for the internal market in electricity and repealing directive 96/92/EC

   •   Directive 2001/77/EC of the European Parliament and of the council of 27 September
       2001 on the promotion of electricity produced from renewable energy sources in the
       internal electricity market

   •   Framework Convention on Climate Change was signed in 2000.

   •   Kyoto Protocol to the Framework Convention on Climate Change was signed in 2007.
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3. Wind
 A wind atlas for Bosnia and Herzegovina was recently established. The assessment shows
that Bosnia and Herzegovina has significant wind potential. It is estimated that the total wind
power potential capacity is about 2,000 MW, but only 900 MW are usable. This potential has
not yet been exploited.

The new atlas shows the most promising areas for exploitation include regions around Bihac,
Tomislav Grad, Livno, Glamoc, Mostar and part of the east Herzegovina, Trebinge and Gacko
(Emportal, 2009).

The following figure displays the wind velocities at a height of 80 meters throughout Bosnia-
                        Bosnia Wind Resource Map (Source: 3Tier)

As shown, the wind potential is greatest in the western portion of the country where the
velocities can reach up to 9 m/s.

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4. Biomass
The Bosnia and Herzegovina Biomass Energy for Employment and Energy Security Project
plans to avoid 120,000 tonnes of CO2eq over 15 years by retrofitting or installing biomass-fired
boilers in 20 schools across the country. According to the UNDP Human Development Report,
biomass and waste currently make up 3.7 percent of Bosnia’s energy supply. It is estimated
that 1 million cubic meters of biomass per year are available for energy production (Plan Bleu,

Forests and forestland include around 43 percent of Bosnia and Herzegovina’s territory or
around 2.7 million hectares. The forest decreases in size by around 0.1 percent each year.

It is estimated that wood waste in Bosnia and Herzegovina can annually produce
approximately 5,200 GWh of electricity, which amounts to 600 MW of installed capacity.
Regarding landfill gas, a pilot project has been developed in Saravejevo that has 350 kW of
electric capacity (Trade Council of Denmark, 2008).
Regarding residues from field crops, fruit tree plantations, and livestock activities, there
should be a significant potential for their collection and utilization, along with wastes including
manures from intensive farms. Utilization of those resources could be done through
incineration or anaerobic digestion technologies.

Detailed studies and surveys would have to be carried out to determine location, logistics, size
of units, economics and viability, likewise with MSW (Municipal Solid Waste) and the waste of
sewage (sewage sludge).

It is assumed that charcoal and wood fuel consumption is similar to that of the remaining
inland area of former Yugoslavia.
Biomass resource type                                    Total production          Production density
Total land area covered by                          (avg. 2006-2007,    km2)            (avg. 2006-2007, %)
  Arable Land                                                         10,245                            20
  Permanent Crops                                                        955                             2
  Permanent Meadows and Pastures                                      10,340                            20
  Forest Area                                                         21,850                            43
  Other Land                                                           7,810                            15
  Inland Water                                                             10                            0
Primary crop production                           (avg. 2006-2007, tonne)                 (tonne /100 km2)
  Total primary crops (rank among
  COO)                                                       2,694,543 (24)                      5,263 (15)
  Top 10 primary crops

    Maize                                                           814,597                          1,591
    Vegetables fresh nes                                            495,000                            967
    Potatoes                                                        398,831                            779
    Wheat                                                           244,804                            478
    Plums and sloes                                                 130,971                            256
    Cabbages and other brassicas                                      90,796                           177
    Barley                                                            61,593                           120
    Apples                                                            59,536                           116
    Oats                                                              39,994                            78
    Chilies and peppers, green                                        39,897                            78
Animal units, number                            (avg. 2006-2007, number)                (number / 100 km2)
  Cattle                                                            514,935                          1,006
  Poultry                                                        14,040,500                         27,423
  Pigs                                                              712,071                          1,391
    Equivalent animal units                                         940,168                          1,836
Annual roundwood production                                (2006-2007, m3)                  (m3 / 100 km2)
  Total                                                           2,071,750                          4,066
  Fuel                                                            1,399,000                          2,732
  Industrial                                                      2,530,000                          4,941
  Wood-based panels                                                   28,280                          55.2
                                                       (2006-2007, tonne)                 (tonne / 100 km2)
  Paper and paperboard                                              117,944                            230
  Recovered paper                                                         NA                            NA
                      Source: Food and Agriculture Organization of the United Nations
                      Bosnia and Herzegovina Biomass Resource Data
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5. Solar
Bosnia and Herzegovina has basically two different climatic regions. Its southern costal
regions are typical Mediterranean climates, and the northern regions have climatic activities
similar to central Europe. The solar irradiation values vary accordingly with about 1,240
kWh/m2 in the northern region to 1,600 kWh/m2 in the southern region. In the southern
region, the amount of sunny days can get up to about 270 days per year. The solar potential
of the region is approximately 1,900 TWh (MercyCorp, 2009).
With the help from the Solar Water Heater project, Bosnia and Herzegovina has installed solar
water heaters in the town of Tuzla. The project has had so much success that a new
production facility was opened in the nearby city of Gradacar.

The primary form of solar energy and technology used are flat plate collectors for heating
houses and some commercial and public premises. Their contribution to the total energy
consumption is insignificant. It is not expected that this figure will increase substantially in
the near future, as new consumption could mainly come from new entrants to the market (i.e.
of new buildings or installations). Currently, the only known solar-related businesses exist in
Sarajevo, Brčko, Tuzla, and Gradacar.

The following figures display the direct normal and global horizontal irradiation values for
Bosnia and Herzegovina. As shown, the southwestern portion of the country has significant
irradiation levels.

                    Direct Normal Irradiation Values (Source: NASA)
                   Global Horizontal Irradiation Map (Source: NASA)

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6. Geothermal
Currently, there is no power generated from geothermal resources in Bosnia and Herzegovina.
Subterranean geothermal pools and lakes throughout Bosnia and Herzegovina present
potential sources of thermal energy. A pilot project was planned for development, but never
constructed. The country’s geothermal potential for space heating and therapeutic bath
purposes, based on the existing wells, is about 33 MWt.

The heat flow density for Bosnia and Herzegovina is shown in the following figure. As shown
the country has the highest heat flow density in its northeastern corner. The rest of the
country has moderate heat flow.

                              Geothermal Heat Flow Density
                              (Source: Energie-Atlas GmbH)

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7. Hydroelectric
Bosnia and Herzegovina’s geography includes fast-flowing mountain streams and powerful
rivers that are very well suited for hydroelectricity production. Currently, hydroelectric power
stations exist with a generating capacity of around 6,500 MW. Most of these installations are
more than 30 years old; modernization of the existing plants is in the pipeline. In 2007
Bosnia generated 6,140 GWh of hydroelectricity, which was a 5 percent generation increase
from the previous year (EIA, 2006).

It is estimated that Bosnia has a hydropower potential of 23,400 GWh. Most of the potential
is located within the Drina, Neretva and Trebisnjica river basins. The Drina River alone is
estimated to have a power generating potential of about 6,000 GWh.

Bosnia has an estimated small hydro power potential of 2,500 GWh/yr. According to the
Bosnian Ministry of Energy, Bosnia & Herzegovina has the potential to support 356 large and
small hydroelectric power stations. Since 2006, a total of 120 licenses have been issued for
new mini hydroelectric power stations; mini hydroelectric power stations have capacities not in
excess of 10 MW.

The government is seeking foreign investors that would help develop the country’s
hydroelectric potential. The Austrian Power & Environment Technology GmbH has been
assisting a Bosnian energy company, Elektoprivreda BIH, with the construction of four
hydropower stations totaling 200 MW. Many other foreign investors have taken interest in
hydroelectric development in the area as well (Wein International, 2007).
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8. Relevant Links
Please see webpage for relevant links.

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9. References
Emportal, “BIH Has Excellent Wind Power Potential,” May 2009. Available online:

Energy Information Agency (EIA), “Bosnia-Herzegovina,” 2007. Available online:

Gtz, “Energy-policy Framework Conditions for Electricity Markets and Renewable Energies: 21
Country Analyses,” June 2004.

MercyCorps, “Bosnia: Solar Water Heaters,” June 6, 2009.

Plan Bleu, “Energy Efficiency and Renewable Energy Bosnia & Herzegovina - National study’s
summary,” Hydro-Engineering Institute Sarajevo, March 2007.

Trade Council of Denmark, Western Balkan, “Biomass,” 2008. Available online:

Trade Council of Denmark, Western Balkan, “Solar Energy: Bosnia-Herzegovina, Croatia and
Serbia,” 2006. Available online:
Wein International, “Know-how from Austria for expansion of hydropower,” May 2007.
Available Online:

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10. Country Contacts
Contacts made in the preparation of this assessment are gratefully thanked for their
contribution to this report. Please see webpage for contacts listing.

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