Article Bosnia and Herzegovina: New Law on Renewable Energy Sources of Republika Srpska Enters into Force

On March 5, 2022, a new Law on Renewable Energy Sources of Republika Srpska entered into force in Republika Srpska, replacing the 2013 Law on Renewable Energy Sources and Efficient Cogeneration. Republika Srpska (the Bosnian Serb Republic) is one of the two highly autonomous entities established by the 1995 Dayton Accords to make up the country of Bosnia and Herzegovina, the other being the Federation of Bosnia and Herzegovina.

As a member of the Energy Community, Bosnia and Herzegovina is obliged to align its legislation with the European Union’s (EU’s) environmental and energy acquis communitaire approved under the Energy Community Treaty. The new law is largely harmonized with EU Directive 2018/2001/EC of the European Parliament of 11 December 2018 on the Promotion of the Use of Energy from Renewable Energy Sources.

The new law introduced the following innovations aimed at incentivizing the production of electrical and thermal energy from renewable energy sources and increasing its share in gross final energy consumption.

Differentiated Financing of Small and Large Plants

The new law distinguishes between small and large plants that produce electricity from renewable sources. The small plants include hydroelectric, wind, and solar power plants on land with an installed capacity of 150 kilowatts (kW) or less, and rooftop solar power plants, biomass and biogas power plants, plants for landfill gas and for gas for municipal wastewater treatment with an installed capacity of 500 kW or less. Large plants include wind and solar power plants on land with an installed capacity of more than 150 kW (up to 50,000 kW), and rooftop solar, biogas, and biomass power plants with an installed capacity of more than 500 kW.

This division determines the system of subsidies. Under the new law, only small plants will receive financial support from the state through feed-in tariffs or guaranteed purchase prices. Large power plants will be subsidized at a premium reached through a public bidding procedure. The auctions for large plants will be conducted every two years by the Incentive Operator, a nonprofit organization that will perform administrative, financial, and other operational activities of the incentives system.

Effort to Stop the Spread of Small Hydropower Plants

The National Assembly of Republika Srpska accepted the recommendations of local civic organizations and exempted hydropower plants with a capacity of more than 150 kW from the auction premium. Under the previous law, power plants of up to 10 megawatts (MW) were entitled to feed-in tariffs, which paved the way for large investments in small hydropower plants that can generate between 100 kW and 10 MW. Studies showed that small hydropower plants caused serious environmental damage in the Western Balkan region, including Bosnia and Herzegovina. Rivers and streams were dammed and fed into pipes to increase the water velocity, which threw the whole surrounding ecosystem out of balance. In some cases, local people have been left without water for irrigation and animals without water to drink, while river banks in certain parts were left completely dried out. With the new regulation, the incentive for further investing in small hydropower plants will be largely eliminated.

New Incentives: Prosumers and the Renewable Energy Community

The new law allows an end user to acquire the status of a prosumer by building and connecting a power plant that uses renewable energy sources to the end user’s internal electrical installations for self-consumption, and to then obtain a certificate for serving as a power production plant. The prosumer will thus have the opportunity to produce electricity for self-consumption, store it without having to obtain a building permit, and deliver the surplus electricity produced to the distribution network.

The Renewable Energy Community has a similar role, but it covers a larger number of people. It is defined as a legal entity established with the aim of using renewable energy sources for electricity production primarily to meet the energy needs of community members in a way that includes environmental, economic, and social benefits for community members and the wider society. The Energy Community is also entitled to produce, consume, store, and sell electricity from its renewable sources.

It is expected that the new law will help Bosnia and Herzegovina meet its obligations under the Paris Agreement and toward the Energy Community.

Statistics of the International Energy Agency indicate that more than half of Bosnia and Herzegovina’s electricity generation capacity is made up of hydropower, while the remainder comes from lignite power plants. As of 2020, Bosnia and Herzegovina had about 87 MW of wind power and 35 MW of solar power installed.

Prepared by Milica Skaro, Law Library intern, under supervision of Peter Roudik, Assistant Law Librarian for Legal Research

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Chicago citation style:

Bosnia and Herzegovina: New Law on Renewable Energy Sources of Republika Srpska Enters into Force. 2022. Web Page. https://www.loc.gov/item/global-legal-monitor/2022-07-18/bosnia-and-herzegovina-new-law-on-renewable-energy-sources-of-republika-srpska-enters-into-force/.

APA citation style:

(2022) Bosnia and Herzegovina: New Law on Renewable Energy Sources of Republika Srpska Enters into Force. [Web Page] Retrieved from the Library of Congress, https://www.loc.gov/item/global-legal-monitor/2022-07-18/bosnia-and-herzegovina-new-law-on-renewable-energy-sources-of-republika-srpska-enters-into-force/.

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Bosnia and Herzegovina: New Law on Renewable Energy Sources of Republika Srpska Enters into Force. 2022. Web Page. Retrieved from the Library of Congress, <www.loc.gov/item/global-legal-monitor/2022-07-18/bosnia-and-herzegovina-new-law-on-renewable-energy-sources-of-republika-srpska-enters-into-force/>.