The Parliament of the Federation of Bosnia and Herzegovina, at the session of the House of Representatives held on July 6, 2023, and at the session of the House of Peoples held on July 31, 2023, adopted the Law on Electricity of the Federation of Bosnia and Herzegovina, as well as the Law on Energy and Regulation of Energy Activities in the Federation of Bosnia and Herzegovina. Both laws were published in the Official Gazette of the Federation of Bosnia and Herzegovina No. 60/23 on August 9, 2023.
The reasons for adopting the said laws stemmed from the need for better organization of the energy sector, the introduction of European standards, i.e., the harmonization of regulations with the legislation of the European Union, better supply and, most importantly, better protection of end customers. Since Bosnia and Herzegovina is a member of the Energy Community, as such, it has already committed itself to harmonize its regulations with the legal framework of the European Union and to continue the process of liberalization of the electricity market and the transition to clean energy.
The new Law on Electricity of the Federation of Bosnia and Herzegovina governs electric power policy and planning, electric power activities, permits for performance, and regulation of these activities. Among other things, it regulates the production of electricity, construction of power plants, distribution of electricity, trade and storage of electricity, end customers, aggregation of resources, electromobility, security of supply, construction, reconstruction, use and maintenance of electricity facilities. New categories of market participants and activities were also introduced, such as active customers, aggregators, and energy communities. The term “active customer” means an end customer or a group of end customers who act together, who consume, or store electricity produced at the point of consumption, or who sell surplus electricity produced by themselves, or participate in flexibility measures, where these activities do not constitute their main commercial or professional activity. The “citizens’ energy community” represents a legal entity whose primary goal is to ensure environmental protection, as well as the economic and social benefit of members or share owners, and not to make a profit. The law also introduces new rights and mechanisms for the empowerment and protection of end customers of electricity.
The Law on Energy and Regulation of Energy Activities of the Federation of Bosnia and Herzegovina regulates the implementation of electric power policy and development planning, the regulations that determine and on the basis of which energy policy and energy development planning are implemented, the determination to use renewable energy sources, as well as the organization and functioning of the Regulatory Commissions. In addition, the Law prescribes the long-term goals of conducting energy policy, which implies the implementation of the Energy Strategy, as the basic regulation that determines policy and plans development in the energy sector. Mechanisms have also been introduced to protect vulnerable and protected customers. The vulnerable customer asserts the right to a subsidy of part of the costs for the consumed electricity, while the protected customer cannot have electricity supply suspended due to non-payment. The law clearly prescribes energy activities and permits for their performance.
It is significant to highlight the importance of these laws for citizens, bearing in mind that natural persons can be prosumers (consumer-producer concept), i.e., they can sell on a competitive market, the electricity they produce themselves. In addition, they can join together in energy communities of citizens, which would certainly reduce their costs and contribute to a healthier environment. The law stipulates that the energy community can participate in the following activities: electricity production, including production from renewable sources, electricity supply, electricity consumption management, aggregating, energy storage, providing energy efficiency services, providing electric vehicle charging services, and providing other energy services to members of the energy community. Therefore, it is possible for all citizens to be participants in the production of electricity, not only in consumption.
The new laws have improved all segments of the energy sector, the administrative obligations of investors have been significantly reduced, the procedures for issuing all permits have been simplified, facilities that use renewable energy sources have been exempted from the obligation to obtain an energy permit, and mechanisms have been created to protect vulnerable and protected electricity customers, and more precisely defined rights and obligations of all participants in the energy sector.
From the above, we can conclude that the new laws represent a significant improvement of the legislation in the field of energy and a great step towards harmonization with the legislation of the European Union in this area, especially in terms of the liberalization of the electricity market and the transition to clean energy.
The Law on Electricity of the Federation of Bosnia and Herzegovina and the Law on Energy and Regulation of Energy Activities in the Federation of Bosnia and Herzegovina entered into force on August 17, 2023.
Author: Anja Banjac
E-mail: [email protected]
