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Bosnia and herzegovina and renewable energy sources

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  • 1. Renewable Energy Sources and Bosnia and Herzegovina Review of Current Situation and Future DevelopmentsIntroductionThe most appropriate introduction for this topic could be found in the words of famous Americaninventor, scientist and businessman who developed many devices that greatly influenced lifearound the world, Mr. Thomas Alva Edison. Almost 100 years ago Mr. Edison said:“It needs to know to take advantage of natural forces and, in that way, to get all the energy weneed. The sun’s rays are form of energy, wind and ocean currents are also energy.Do we use them? Oh, no! We are burning forests and coal like a subtenant who is burning frontdoor of our house for heating.We are living like wild immigrants who does not realize that this fortunes belong to all of us”These words of Mr. Edison are confirmation that for hundreds of years we have been witnessingthe destruction of our natural environment. If Chernobyl nuclear disaster was a warning during thetime of the greatest expansions of nuclear power production then Fukushima nuclear disaster canbe understood as the last warning for the preservation of the environment and our future.Not so far, oil spill in the Gulf of Mexico caused extensive damage and continues to affect theeconomy and welfare of people in the region.Despite the economic recession, during 2010, greenhouse gas emission increased more thanever. International goal to limit the rise in global temperatures to 2˚ C above preindustrial levelsbecomes even harder to reach.Uncontrolled growth of fuel prices on the world market significantly affected the global and nationaleconomies. Trend of increasing demand and reducing oil stocks will continue in future limiting thedevelopment of economies that are largely dependent on this energy source.Above mentioned is not the only proof that method of energy usage and exploitation of naturalresources for energy production is driver of development in the world history. At the same time ifwe do not take into consideration environmental impact in meeting energy needs it can lead toestablishing a completely unsustainable economic and social system.Thus, planning the development of energy sector represents the greatest challenge for responsibleinstitutions and individuals on all administrative and political levels, from global down to the localcommunity. A prerequisite for understanding of the size of this challenge is in understanding ofcurrent status, a process that caused this situation as well as different scenarios of long-termtrends in this area.
  • 2. Utilization of renewable energy sources is the general interest for global energy strategy, not onlybecause of environmental protection, but also because of security of energy supply, opportunity toimprove current situation of unemployment and economy development as a whole.Development of renewable energy markets, investments, industries and policies is rapid in recentyears.Renewable Energy Sources in European UnionRenewable energy sources (hereinafter: RES) represent energy sources existing permanently innature regenerating completely or partially, especially the hydro energy, wind, biomass, biogas,landfill gas, agricultural gas, sewage gas, geothermal and no accumulated solar energy.Member countries of the European Union (hereinafter: member countries) adopted directivesstipulating the obligation of share increase from renewable sources in total energy consumptionuntil 2020. Signing the international agreement with EU establishing the Energy Community Treatyof Southeast European Countries Bosnia and Herzegovina also undertook the obligations from EUDirectives, referring to RES.EU Directive 2009/28/EC stipulated certain news in relation to earlier regulations, with regard tocalculating renewable energy generated in large hydro power plants and consumption obligationsof renewable energy with regard to total energy consumption according to the system 20+20+20,which means to reduce greenhouse gas emissions, to increase the share from RES in total energyconsumption and to save energy through energy efficiency.Main goals of the Directive are as follows:  to manage energy consumption,  to increase energy utilization from RES,  to reduce greenhouse gas emission for the purpose of preventing climate change,  to save energy by increase of energy efficiency,  to ensure energy supply,  to promote technological development and innovation,  to provide employment and regional development, especially in rural and remote areas,  to reduce dependency on oil and petroleum derivatives import by utilizing energy from RES in the field of transportation.The Directive, inter alia, stipulates the following:  obligation of drafting national renewable energy action plans (National Renewable Energy Action Plans – NREAP) with the dynamics of achieving goals until 2020,  calculation of energy share from RES,  possibility of statistical transfer among EU member countries,  possibility of joint projects of EU member countries and signatory countries,  possibility of joint supporting plans of RES utilization promotion in EU member countries,  elaboration and adaptation of the existing domestic legislation with EU directives, which shall prescribe incentive measures of RES utilization,  obligation of providing information and education of the domestic public,  provision of origin guarantee, i.e. certificates for energy produced from RES
  • 3.  according to possibilities, provision of technical requirements of transmission and distribution network access according to non-discriminatory criteria,  sustainability criteria for biofuels and bioliquids,  reporting by EU member countries and signatory countries,  supervision and reporting by the Commission,  full transparency,  implementation details and  annexes directing to practical implementation of the directive.Renewable Energy Sources in Bosnia and HerzegovinaBosnia and Herzegovina (BiH) is a signatory of South East Energy Community Treaty from 2006and for the electricity industry and for development of renewable energy in particular, the SouthEast Europe Energy Community Treaty (SEE EnCT) effectively introduces a responsibility forEnergy Community signatories to interpret EU Directives into national law and work towardestablishing of an electricity market which can be integrated into regional and European electricitymarkets.Bosnia and Herzegovina Governance StructureAccording to the BiH Constitution, BiH consists of the two Entities: • Federation of Bosnia and Herzegovina (FBiH) • Republika Srpska (RS)There is also the Brčko District of Bosnia and Herzegovina which is a single administrative unit oflocal self-government existing under the sovereignty of Bosnia and Herzegovina.BiH became a potential candidate country for EU accession in June 2003. The adjustment of BiHlegislation with the EU legislation constitutes one of the challenges of BiH in the process of theEuropean integration. BiH must accordingly adopt the whole EU legal framework known as "acquiscommunautaire".Renewable Energy and Environment Legislation RequirementsThe legislation of BiH for renewable energy has to accordingly meet the requirements coming outfrom Directive 2009/28/EC.Bosnia and Herzegovina has the obligation to elaborate its own National Renewable Energy ActionPlan (NREAP), and considering the fact that energy policy is on the entity level, the obligation ofFederation of BiH is to elaborate the annex for NREAP BiH referring to Federation of BiH.According to the Energy Community Treaty, the extension of the acquis communautaire to BiHalso relates to EU legislation in the area environment.BiH legislation must accordingly comply with the Directive 2003/35/EC of the European Parliamentand in particular by providing for public participation in respect of the drawing up of certain plansand programs relating to the environment and improving the public participation.As part of the EU environmental acquis communautaire, BiH should also consider adapting themain principles of EU Water Framework Directive which purpose is to establish a framework for the
  • 4. protection of inland surface waters (rivers and lakes), transitional waters (estuaries), coastal watersand groundwater.The Directive has a number of objectives, such as preventing and reducing pollution, promotingsustainable water usage, environmental protection as well as achieving and maintaining “goodecological and chemical status” for all Community waters by 2015.Federation of BiH Power SectorThe regulatory structure of the electricity industry in Bosnia and Herzegovina reflects manyfeatures of the overall governance structure within the country.There are State regulator and two Entity regulators in BiH. It is important to note that transmissionhas been separated from distribution, generation and supply but this separation is also reflected inregulation.In both Entities elected Parliaments adopt laws, appoint governments and respective ministriesresponsible for implementation. In addition, there are more local government arrangements in theFBIH organized in Cantons and Municipalities.The power system in FBiH consists of two vertically integrated power utilities responsible forgeneration, distribution and supply in FBiH and 18 Small Independent Power Producers.The Total Installed Generation Capacity in FBiH is 2521 MW. Out of that Hydro Power plantsparticipate with 1356 MW and Thermo Power Plants with 1165 MW.Up to date 32 Small Hydro Power Plants have been constructed with total installed capacity of 34MW.Production of electricity energy in FBIH in 2010 was close to 10000 GWh. Out of this amount 17%of electrical energy was exported. BiH is the only net exporter of the electrical energy in the SEE.Renewable Energy PotentialsIn regard to renewable energy resources potentials, BiH offers huge potentials for futuredevelopments of various RES technologies. Among other potentials there is an assessment thatonly 40 % of hydro potentials have been utilized so far and that approximately additional 2400 MWof hydro energy can be developed in the country. There are still no wind farms in place but it couldbe technically penetrated into the system around 400 MW immediately. Beside this, there aremany opportunities for developments of other RES like solar, biomass, geothermal, etc.With an objective to enhance efforts regarding the RES development, BiH and in particular F BiHrecognized following main areas of concern as follows:  Development of required legislation and regulation in line with EU Directives  Removal of obstacles for usage of RES, both technical and administrative barriersIn some EU Member States, the development of RES has been slowed down or even totallyblocked by substantial administrative constraints and complicate regulation. Developers of RESfacility have often to comply with a multitude of laws and bylaws regulatory documents. The main
  • 5. non-technical problem for development of RES within EU Member States and SEE region as wellis the difficulty in obtaining the necessary authorizations to build a new site or to restore an existingpower plant.  Attraction of foreign investments  Efficient administrative support for project development  Simplify procedures for RES projects  Promotion and implementation of incentive mechanismsBeside these efforts there are parallel efforts in meeting following energy policies:  Diversification of energy sources  Enhancement of Security of Supply  Market opening resulting with attraction of foreign investments  Participation of domestic economy in implementation of RES projects  Contribution to sustainable development of domestic economy  Environmental improvements  Reduction in use of fossil fuels, green gas emissions, waste management, etc…Feed in Tariff System in Federation of Bosnia and HerzegovinaThe incentives for generation of energy from renewable sources are regulated at the level ofEntities of BiH.The current Feed in Tariff (FIT) system of incentives for generators of electricity from renewablesources in Federation of Bosnia and Herzegovina is established by the Decree on the Use ofRenewable Sources of Energy and Cogeneration came into force in May 2011.The purpose of the Decree is to stimulate the production and general utilization of energy obtainedfrom RES and the development of a legislative, regulatory and technical framework for RES.The mentioned incentives for RES facilities through Feed in Tariff system reflects in following:  Priority of intake of electricity produced from RES in the power grid  Mandatory purchase of electricity produced from Qualified Producer  Guaranteed purchase price  Priority for power grid connection
  • 6. Next StepsIn order to enhance promotion of usage of RES and attraction of foreign investments FederationBiH has been undertaking following activities such as:  Adoption of the whole set of energy and energy related laws like laws on RES, Oil and Oil derivates, Gas, Energy Efficiency, Exploration and Production of Oil and an umbrella Energy law.  The new RES Law was prepared and developed by involvement of all interested parties like potential sponsors, international financial institutions, government and regulatory bodies.  Further work on electricity market opening.We do hope that all above mentioned clearly proof our intentions to be leader in usage ofRenewable Energy Sources in the region and all potential investors are welcome to invest inenergy sector in Bosnia and Herzegovina.Thank You!Erdal TrhuljMinister of Energy, Minning and Industry inFederation of Bosnia and HerzegovinaBosnia and Herzegovina