An aerial shoot of Thermal Power Plant in Tuzla, Bosnia and Herzegovina December 2, 2021. Picture taken with a drone December 2, 2021. REUTERS/Dado Ruvic
Bosnia, the Balkans' sole exporter of electricity, may be forced to cut exports as Bosnians turn to subsidised electricity for heating after a jump in prices for other fuels, including gas, firewood and wood pellets.
Electricity prices for households in Bosnia are subsidised by the state and are a tenth of international market prices. In contrast, the price of gas has increased nearly 100% since last winter, mainly tracking higher oil prices.
As a result, people are switching to use electric heaters because of the subsidised electricity.
"Bosnia and Herzegovina may stop exports if this process continues in the short-term," said Edhem Bicakcic, president of the Bosnian branch of the International Council on Large Electric Systems (CIGRE).
"It's not reasonable that using electricity for heating is cheaper that heating from pellet fuel or firewood," Bicakcic said.
Bosnia exports about 25% of its electricity, which is mainly generated using locally produced coal or from hydro plants.
In the first nine months of 2022, electricity exports amounted to more than 900 million Bosnian marka ($450 million) and accounted for 7% of the country's total exports.
Two thirds of the electricity went to neighbours Croatia, Serbia and Slovenia, which will be affected if Bosnia turns off supply, said Ahmed Egrlic, a vice-president of Bosnia's Foreign Trade Chamber.
Egrlic also said Bosnia's power network is not designed for high electricity consumption by households and a massive switch to electrical appliances for heating could bring the system down.
Utilities also stand to lose, as a jump in subsidised sales at home strips them of hundreds of millions of marka in export revenue, which could be used to modernise outdated coal-fired plants and to build renewable energy facilities, industry experts said.
Power distributor Elektrokrajina Banja Luka has proposed to the authorities and utility Elektroprivreda RS (ERS) that heating using biomass should be subsidised.
Entire apartment blocks in the city of Banja Luka have cancelled their biomass heating accounts due to high bills.
"The (biomass) subsidies would pay off because of enormous differences between the prices of electricity on international power markets and those for households," Elektrokrajina spokesman Predrag Klincov told Reuters.
He explained that on international markets utilities can sell electricity at a price projected to reach 900 euros/MWh in winter while households now pay just 30 euros/MWh.
"For each kilowatt/hour of energy spent for heating, ERS will have a direct loss of dozens of millions of marka in Banja Luka alone," Klincov said.
(1$ = 2.0 Bosnian marka)
