In-Depth of Energy Review Efficiency Policies BOSNIA Programmes: AND and HERZEGOVINA In-Depth Review of In-Depth Review of Energy Efficiency Policies Energy Efficiency and Programmes: BOSNIA AND HERZEGOVINA Policies and Programmes: Bosnia and Herzegovina ratified the Energy Charter Treaty and the Protocol on Energy Efficiency and Related Environmental Aspects (PEEREA) in 2001. By ratifying the Protocol, countries commit themselves to formulate and implement policies for improving energy efficiency and reducing the negative environmental impact of the energy cycle (Art. 5). The guiding principle of the PEEREA is that contracting parties shall cooperate and, as appropriate, assist each other in developing and implementing energy efficiency policies, laws and regulations (Art. 3). The country review process is a core activity in monitoring and facilitating the implementation of the Protocol. The in-depth energy efficiency reviews, implemented under the PEEREA, have proven to be an important tool in assessing the progress of member countries in fulfilling their commitments under the Protocol. They also provide peer guidance to governments in developing and implementing energy efficiency policies. This in-depth review of energy efficiency policies of Bosnia and Herzegovina was carried out in 2011, following a regular review report submitted by the Bosnia and Herzegovina authorities in 2008. Energy Charter Secretariat BOSNIA AND 2012 2012 HERZEGOVINA Energy Charter Secretariat ISBN: Boulevard de la Woluwe, 56 ∙ B-1200 Brussels ∙ Belgium 978-905948-101-5 (English Paperback) Tel.: +32-2-775-98-00 ∙ Fax: +32-2-775-98-01 ENERGY 978-905948-103-9 (English PDF) E-mail: [email protected] ∙ www.encharter.org CHARTER Energy Charter Secretariat 2012 In-Depth Review of Energy Efficiency Policies and Programmes: BOSNIA AND HERZEGOVINA Energy Charter Secretariat 2012 Introduction Disclaimer Information contained in this work has been obtained from sources believed to be reliable. However, neither the Energy Charter Secretariat nor its authors guarantee the accuracy or completeness of any information published herein, and neither the Energy Charter Secretariat nor its authors shall be responsible for any losses or damages arising from the use of this information or from any errors or omissions therein. This work is published with the understanding that the Energy Charter Secretariat and its authors are supplying the information, but are not attempting to render legal or other professional services. © Energy Charter Secretariat, 2012 Boulevard de la Woluwe, 56 B-1200 Brussels, Belgium ISBN: 978-905948-103-9 (English PDF) ISBN: 978-905948-101-5 (English hard copy) Reproduction of this work, save where otherwise stated, is authorised, provided the source is acknowledged. All rights otherwise reserved. Introduction INTRODUCTION The State of Bosnia and Herzegovina (BiH) ratified the Energy Charter Treaty (ECT) and the Protocol on Energy Efficiency and Related Environmental Aspects (PEEREA) in 2001. By ratifying the Protocol, countries commit themselves to formulate and implement policies for improving energy efficiency and reducing the negative environmental impact of the energy cycle (Art. 5). The guiding principle of the PEEREA is that contracting parties shall cooperate and, as appropriate, assist each other in developing and implementing energy efficiency policies, laws and regulations (Art. 3). Fulfilling the country’s commitments under the Protocol, the BiH authorities have submitted a Regular Review of Energy Efficiency Policies in 2008. The current in-depth energy efficiency review is the first for the country. The country review process is a core activity in monitoring and facilitating the implementation of the Protocol. The in-depth energy efficiency reviews, implemented under the PEEREA, have proven to be an important tool in assessing the progress of member countries in fulfilling their commitments under the Protocol. They also provide peer guidance to governments in developing and implementing energy efficiency policies. It has been agreed among member states that to effectively monitor the progress made by participating countries in implementing the PEEREA obligations, the in-depth reviews should be carried out after the completion of regular reviews and should be updated at regular intervals, at least every five years. The main principle of the Energy Charter’s indicative schedule of reviews for 2010-2012, which was adopted in 2009, is to avoid overlap with other ongoing review processes and to focus on countries that stay outside the scope of other international organisation (IEA, APEC, etc.). The Energy Charter Secretariat is continuing its efforts to ensure an overall balance between the reviews of OECD and non- OECD countries. The in-depth review of the energy efficiency policies of BiH was carried out by a team Comprised of officials from three countries that are Parties to the Protocol: Mr. James Acord from the UK Department of Energy and Climate Change, Ms. Lisa Lundmark from the Swedish Energy Agency and Mr. Corneliu Radulescu from the Romanian Regulatory Authority. The team also included Ms. Bilyana Chobanova and Mr. Boris Petkov from the Energy Charter Secretariat and Mr. David Taylor, consultant to the Secretariat. The team visited Sarajevo between 9 and 13 May 2011 and discussed a range of issues with government agencies and other stakeholders (listed in Annex IV). Key sources of information on the energy efficiency policies and programmes included the previous Energy Charter Regular Review of Bosnia and Herzegovina (considered by the PEEREA Working Group in 2008), national policies as posted on ministry websites, information provided by institutions in BiH during the country visit, and other relevant publications of the State Government and the Governments of the Entities, international institutions such as the EBRD, IMF, World Bank and IEA, and the institutions of the EU. This in-depth review report was discussed and approved by the PEEREA Working Group in 2011 and the recommendations are submitted for endorsement by the Energy Charter Conference. 3 BiH In-Depth Energy Efficiency Review Table of Contents TABLE OF CONTENTS EXECUTIVE SUMMARY ....................................................................................... 10 Background ...................................................................................................................................... 11 Energy and Energy Efficiency Policy ........................................................................................ 11 Renewable Energy Policy ............................................................................................................ 12 Overall Assessment of Progress ................................................................................................ 13 Recommendations ......................................................................................................................... 14 BACKGROUND ..................................................................................................... 18 Brief Country Overview ................................................................................................................ 19 Governance ...................................................................................................................................... 21 Economic Background ..................................................................................................................22 Energy Supply and Demand.......................................................................................................23 Energy Consumption Trends by Sector ..................................................................................34 ENERGY POLICY .................................................................................................. 38 Strategy ..............................................................................................................................................39 Energy Sector Reform ...................................................................................................................42 Energy Pricing Policy .....................................................................................................................45 ENERGY EFFICIENCY POLICY ............................................................................. 52 Overview of Energy Efficiency Policies and Legal Framework .......................................53 Policy Goals ......................................................................................................................................53 Legal Framework ............................................................................................................................55 Energy Efficiency Implementation ...........................................................................................56 Institutional Set-Up ........................................................................................................................58 ENERGY EFFICIENCY FINANCING ...................................................................... 60 Government Actions ..................................................................................................................... 61 EBRD .................................................................................................................................................... 61 EU and IPA Support.......................................................................................................................