Introduction
The electricity market in Bosnia and Herzegovina (BiH) faces numerous challenges in the process of liberalization and integration into the wider regional and European market. BiH is the only country in the Western Balkans region that still does not have an active electricity exchange, although it is expected to establish one soon. While all neighboring countries have already set up organized markets, BiH lags behind in this process, which complicates integration into the unified European electricity market.
The electricity market in BiH is fragmented, with three public power utilities: Elektroprivreda BiH, Elektroprivreda RS, and Elektroprivreda HZHB. These companies dominate the market, and the existing legal framework does not provide full competition or transparency in electricity trading. Although the market is formally open to certain categories of consumers, in practice competition is limited, and most consumers remain under public supply, which reduces the effects of market liberalization.
Production and Consumption
Electricity production in BiH in 2024 amounted to 14.3 TWh, representing an 8% decrease compared to the previous year. The largest share of production came from thermal power plants (8.4 TWh), while hydropower plants generated 4.7 TWh, and renewable energy sources (wind, solar) contributed 1.2 TWh.
Electricity consumption remained stable at 11.3 TWh, meaning that BiH achieved a net export of 3 TWh. However, exports fell by 60% in financial terms, while imports rose by 57%, indicating reduced competitiveness in the market.
Energy Transition
BiH faces challenges in the energy transition, particularly regarding the reduction of carbon dioxide emissions and the shift to renewable energy sources. Construction of new solar and wind power plants is planned, but the existing transmission and distribution grid capacities are not sufficiently developed to support this growth.
Experts warn that BiH lacks a harmonized strategy for grid development and the integration of renewables, which could slow down the green transition and increase the risk of instability in the power system.
Need for Reforms
For BiH to succeed in the liberalization process of the electricity market, it is necessary to:
- Ensure the legal unbundling of system operators from generation and supply companies, in line with European standards;
- Invest in the modernization of transmission and distribution networks to support the growth of renewable energy sources;
- Increase transparency in electricity trading and enable market competition.
Only through these reforms can BiH secure an efficient, competitive, and sustainable electricity market that will be integrated into the wider European market.
Participants in Electricity Trading in Bosnia and Herzegovina
In Bosnia and Herzegovina, electricity trading involves various entities engaged in activities on the wholesale market. These entities must obtain the appropriate licenses issued by the competent regulatory bodies: the State Electricity Regulatory Commission (DERK), the Regulatory Commission for Energy of Republika Srpska (RERS), and the Federal Electricity Regulatory Commission (FERK).
Main Participants in Electricity Trading in BiH
a) Electricity Traders – entities that buy and sell electricity on the wholesale market;
b) Electricity Suppliers – entities that sell electricity to end consumers;
c) Energy Storage Operators – entities that perform energy storage activities and may participate in the electricity market;
d) Regulatory Authorities – institutions that issue licenses and oversee the electricity market:
- DERK – competent for the electricity market at the state level,
- RERS – competent for the electricity market in Republika Srpska, and
- FERK – competent for the electricity market in the Federation of BiH.
Registration of Electricity Traders in Bosnia and Herzegovina
The registration of an electricity trader in Bosnia and Herzegovina (BiH) requires fulfilling specific conditions and procedures, which differ depending on the entity where the activity is carried out. The requirements are based on the legislation of the Federation of BiH (FBiH), Republika Srpska (RS), and Brčko District, with the competent regulatory commissions being: FERK (Regulatory Commission for Energy in FBiH), RERS (Regulatory Commission for Energy of RS), and DERK (State Electricity Regulatory Commission, competent for international trade).
Steps for Registering an Electricity Trader
- Choosing the competent regulator
Depending on the entity in which you plan to carry out the activity, it is necessary to apply to the relevant regulatory commission.
- Meeting the requirements for obtaining a license
To be granted a license for electricity trading, certain conditions must be met, including:
- Legal and technical capacities
- Financial stability
- Compliance with applicable legislation
- Submitting a license application
The application for a trading license is submitted to the competent regulatory commission. The application must be accompanied by all required documentation, including: basic information about the legal entity, proof of meeting technical and financial conditions, and a business plan.
- Verification and license issuance
After receiving the application, the competent regulatory commission carries out a verification procedure. If all conditions are met, the appropriate electricity trading license is issued.
- Entry into the electricity traders’ register
Once the license is issued, the trader is entered into the register of electricity traders maintained by the competent regulatory authority. This register is publicly available and provides insight into all authorized electricity traders in Bosnia and Herzegovina.
Author: Aleksandar Sajic
