ERS ready to lead region’s energy transition

State power utility Elektroprivreda Republike Srpske (ERS) plans to build 1,000 MW of new renewable energy capacities over the next ten years. With the aim of leading the region’s energy transition, ERS will invest in the construction of solar power plants, wind farms, and hydropower plants, ERS General Manager Luka Petrović has said in an interview for Balkan Green Energy News.

Petrović also announced the first edition of the Trebinje Energy Summit – SET 2020, which will be held in March next year, with a focus on the Western Balkans’ energy future and Republika Srpska’s energy sector potentials.

In March next year, Republika Srpska is organizing the first edition of the Trebinje Energy Summit – SET 2020. What are your expectations from this event and what topics will be in focus?

ERS’ initiative to organize the Trebinje Energy Summit – SET 2020 sends a clear message to the region and the EU that ERS is ready to be a regional leader and pioneer of positive changes within the process of harmonizing energy policies with the EU’s policies.

The Western Balkans’ energy future and Republika Srpska’s energy sector potentials will be the focus of the two-day event that will take place in our city for the first time on March 5 and 6 next year.

Participants will get acquainted with concrete ideas for overcoming the limitations that hinder the region’s economic development

Participants will get acquainted with concrete ideas for overcoming the limitations that hinder the region’s economic development and for providing long-term predictability to interested investors in the energy sector, while calling on them to jointly develop specific untapped renewable energy potentials.

At the same time, two-day panels featuring prominent individuals in the fields of energy, business, science, and economics will be a kind of international promotion of Trebinje and Republika Srpska. The panels will be an opportunity to invite all regional ministries and power utilities to establish a joint body that will deal will the 20-20-20 climate and energy package (a 20% reduction in greenhouse gas emissions from the 1990 level; a 20% increase in the renewable energy share in overall consumption; and a 20% increase in energy efficiency).

The summit will also be the opportunity to discuss Bosnia and Herzegovina’s energy strategy

The summit will also be the opportunity to discuss Bosnia and Herzegovina’s energy strategy, which should determine a clear path of the energy sector development until 2035 and initiate market and regulatory reforms, while taking into account the strategic interests of Republika Srpska, which is the leader in the field of energy. It is important to point out that ERS can be the system integrator in the process of developing the new strategy, with the aim of strengthening Republika Srpska’s overall economy and making it the most energy-efficient, since it has all the necessary resources and prerequisites to achieve such a goal.

The panel discussions are designed to generate the interest of experts, but also the wider public (including electricity consumers). During the official part of the event, but also on the sidelines, top people in the energy sector, government ministers, and the most renowned university professors and academicians will exchange their different views, while their works will be collected in a special publication after the event.

The grounded and reasoned discussions will result in conclusions to be adopted as guidelines, since they will have a scientific foundation, and will be used as a clear roadmap for the further strengthening of the region’s energy sector.

ERS has recently established a firm to implement the Upper Drina project, which envisages the construction of three hydropower plants – Foča, Paunci and Buk Bijela. How much progress has been made in the preparation of this project and when could the construction begin?

Three hydropower plants (HPPs), with a dam toe power house, are planned to be built in the upper course of the River Drina. ERS plans to build these power plants in cooperation with Serbia’s state power utility Elektroprivreda Srbije (EPS). The drafting of technical documentation for these three power plants is under way, along with the process of obtaining the necessary permits.

The launch of the main works on the construction of HPPS in the upper course of the River Drina is planned for 2020.

Preparatory works and the launch of main works are planned for 2020. The cost of the construction of these facilities, with a combined installed capacity of more than 180 MW, has been estimated at about EUR 425 million, while annual revenues are projected at EUR 40 million, which means that the investment will break even after ten years.

What are ERS’ plans for thermal power plants Ugljevik and Gacko, which are reaching the end of their lifespan?

Thermal power plant (TPP) Gacko was put in operation in 1983, while Ugljevik was commissioned in 1985, and these facilities have about 200,000 operating hours. Due to this fact, ERS has hired experts to conduct thorough analyses and propose steps ERS should take concerning the operation of these power plants. However, it is important to note that thermal power plants are important producers of electricity within ERS, and that their functioning at this time must not be put in question.

We expect a final decision regarding the thermal power plants to be made next year

ERS has already taken a series of steps towards improving their work and environmental protection. By investing in a flue-gas desulfurization system at Ugljevik, we have reduced harmful emissions (a 93.5% reduction in sulfur emissions). Experts will have a final say when it comes to the future of the thermal power plants. The solution could be revitalization or a smaller-scale modernization, or the construction of replacement generators or new ones. Substituting fuel oil with natural gas is also being considered, which would be more commercially viable and environmentally acceptable, and we expect a final decision regarding the thermal power plants to be made next year.

What does the new organization of ERS’ distribution companies envisage? How will it reflect on ERS’ operations? 

The new organization involves the unbundling of market and non-market activities. In the coming period, power distribution enterprises will be transformed into five distribution system operators (DSOs). The organizational model has been changed in the sense that a model based on geography has been abandoned in favor of a model that involves the optimization of employee numbers and the qualifications structure.

The organizational model has been changed in the sense that a model based on geography has been abandoned

The competencies of each employee are of critical importance. This is a very complex process, of great significance for the whole of ERS, given that it will increase the efficiency and productivity of the distribution companies. The main objective is to ensure a satisfactory quality of electricity supply to each consumer. Electricity prices will remain fully regulated.

To what extent does ERS intend to diversify its energy mix by investing in renewable energy sources? Which projects will be in focus over the next five years? How far has the construction of the Hrgud wind farm progressed?

ERS has prepared a development plan, which has been adopted by the Government of Republika Srpska and which envisages the construction of facilities that will generate electricity from various renewable energy sources. Each of these sources has its own characteristics, so it is necessary to harmonize the generation facilities that ERS plans to build and to ensure the optimal operation of all facilities.

It is possible to expand the Trebinje 1 project and build a solar power plant with a greater capacity

We are currently working on designing and obtaining the necessary permits and approvals for the planned 100 MW solar power plant Trebinje 1. Activities are also underway to secure the necessary financing for the implementation of this project. The process has shown that it is possible to expand this project and build a solar power plant with a greater capacity.

When it comes to wind energy utilization, work is underway on designing and securing the necessary permits for the Hrgud wind farm, for which EUR 64 million in financing has been secured by the [German development bank] KfW.

Also, wind resource assessments are being conducted on other locations, along with the development of technical documentation for other wind farms on the territory of Herzegovina, which has the greatest wind energy potential in Republika Srpska. After completing the studies and the technical documentation, ERS will initiate activities aimed at building wind farms on locations that prove to be viable.

To ensure balancing, ERS is building hydropower facilities – HPP Dabar, HPP Bileća, and hydropower system (HPS) Drina

In order to integrate the intermittent solar and wind power sources into the electricity system, it is necessary to provide them with support in connection with balancing. To ensure balancing, ERS is building hydropower facilities – HPP Dabar, HPP Bileća, and hydropower system (HPS) Drina. ERS, as a responsible company, plans to build hydropower facilities in areas that are exposed to flood risk, with the aim of providing additional kilowatt-hours of electricity, but also so reducing the flood risk. We have stepped up activities on the construction of hydropower plants in the lower course of the River Bosna, the area that has sustained the greatest damage from floods.

Countries in the region, including BiH, should agree new renewable energy targets for 2030 with the Energy Community, as well as adopt national energy-climate plans. How do you see the role of ERS in that period, and how can the company contribute to meeting these targets and realizing these plans?

The adoption of national energy-climate plans will lead to a significant increase in states’ obligations regarding the share of renewable energy sources in overall electricity consumption. In that regard, ERS’ intentions are compatible with the obligations of Republika Srpska and BiH, given that our action plan adopted by the Government of Republika Srpska envisages substantial investment by ERS into the construction of renewable energy facilities until 2030. That plan envisages the construction of facilities with a combined installed capacity of 1,000 MW solely from renewable sources over the 10-year period. In this way, ERS will contribute to meeting the targets envisaged by international agreements.

ERS’ intentions are compatible with the obligations of Republika Srpska and BiH

Also, ERS is committed to actively participating in the implementation of the action plan, not only in the field of renewable energy sources but also in the field of energy efficiency and gas emissions. ERS will closely monitor obligations which will be related to the allowed emissions of CO₂ and other harmful gases at fossil fuel-fired power plants and which could result in limiting the operation of existing thermal power plants operating as part of ERS.