Renewable energy rollout stalls in Bosnia

Three years ago, a group of local activists in the village of Pecka in northern Bosnia and Herzegovina set out to exploit the sun's potential and build a solar power plant on the roof of the Pecka Visitor Center. It was the first such a solar plant in rural Bosnia. The Pecka initiative was the result of a crowdfunding campaign that raised €7,000 ($7,500), which was matched by the UN Development Program, or UNDP.

Yet, a whole year after their installation, the 15 solar panels haven't generated a single kilowatt of electricity. The law regulating feed-in to the power grid remains unfinished, and the center fears that even using the installed system to produce its own energy, known as self-consumption, might later complicate connection to the grid.

"We submitted a request for connection to the local utility in July 2021, and we're still waiting for an answer," says Boro Maric, owner of the Pecka Visitor Center. Indeed, the official bureaucracy is so ponderous, it's "as if we had built a small hydroelectric power plant," he says. Maric also says that an acute lack of information about the entire process has made the project all the more difficult. After the system was installed, for example, the center was informed it would have to pay an additional €4,000 to connect to the grid.

Beleaguered Bosnia

Bosnia and Herzegovina is a federal state made up of two "entities": the Serb-majority Republika Srpska and the Federation of Bosnia and Herzegovina, which is dominated by Bosniaks and Croats. The two entities were created by the Dayton Peace Accords that ended the Bosnian War at the end of 1995.

In terms of meeting climate goals, Bosnia and Herzegovina has a long way to go: Over 60% of the country's energy hails from fossil fuels, primarily coal. On paper, Bosnia is on board to decarbonize by 2050 — a mighty promise in light of its prodigious coal use. It intends to ratchet up its share of energy from renewable energy sources to over 40% by 2030, according to international pledges.

Complicated procedures hamper progress

The country plans to institute a system for CO2 pricing and trading by January 2026, which could cost the coal industry dearly, say experts. The greatest hurdles are the state's complicated distribution of competencies in the field of energy and the powerful vested interests of the coal industry, say developers and experts.

Not only do Bosnia's entities have complete autonomy in decision-making when it comes to energy, so too do the ten cantons within the federation. "These complicated procedures are the reason for the slowness" of Bosnia's decarbonization processes, says Halko Balavac of the Federal Ministry of Energy, Mining and Industry. Each canton must submit its consent for each project, followed by the entity and then the state.

Planned investments

"We have projects in which the municipality, canton, entity and state have jurisdiction, and it takes three to five years to get all the permits," says Senad Salkic, a director at Elektroprivreda BiH, a Bosnian public electric utility company with headquarters in Sarajevo. At present, less than 20% of the utility's power is green, although it plans to invest about €220 million in renewable energy sources over the next two to three years, primarily in solar, wind and hydroelectric. This amounts to 36% of the utility's total investment in production facilities.

In terms of laws enabling renewable energy, Republika Srpska recently passed statutes, which are still being finalized, that allow households to both produce and consume electricity. Republika Srpska has contracted projects in the field of renewable energy worth over €1 billion, according to its minister of energy, Petar Djokic. 

Privileged investors

Of the 180 countries that Transparency International assesses for corruption, Bosnia scores poorly, ranking between Albania and Malawi. The renewable energy sector, it seems, is no exception to the rule. Republika Srpska parliamentarian Nebojsa Vukanovic says privileged investors who are close to the authorities are the ones who land concessions.

"Ninety percent of concessions in the field of renewable energy sources are given to companies owned by politicians from the ruling party or their close relatives, who serve as a cover for them," claims Vukanovic. Minister Djokic, however, claims that everything is done "according to the law." "There are no privileged parties who get concessions," he says.

Coal is king

Bosnia boasts large reserves of coal and, according to critics, the state and energy industry intend to continue profiting from it. Experts say coal-fueled power plants in the central Bosnian cities of Tuzla and Kakanj will continue to operate at least until 2040, probably longer.

"Energy in Bosnia is run by state-owned or entity-owned companies," says economist Damir Miljevic of the Center for Sustainable Energy Transition (RESET), which advocates for renewable energy. "If it is state-owned, it is influenced by politics. This is why they do not want to change anything."

Although Bosnia's renewable energy supply is very small at present, Miljevic is convinced that the country has the potential to lead the Western Balkans in terms of renewable energy production. "Now is the time for water, sun and wind," he says. "In all three categories, Bosnia and Herzegovina has perhaps the best conditions in Europe. Instead of using it as a development opportunity — switching from one type of energy to another — they say no, we will continue with coal, as long as it lasts."

This article is part of a five-part series on renewable energy development in South Eastern Europe conducted with the support of  journalismfund.eu.

Edited by Paul Hockenos, Rüdiger Rossig, Aingeal Flanagan