It’s cheaper to build new coal power plant than maintain existing ones in Republic of Srpska

Coal-fired power plants of power utility Elektroprivreda Republike Srpske are old, requiring large investments in maintenance, so it is cheaper to build a new one, according to Petar Đokić, Minister of Energy and Mining of the Republic of Srpska.

Elektroprivreda Republike Srpske (ERS), a utility based in the Republic of Srpska, one of the two entities constituting Bosnia and Herzegovina, operates two thermal power plants. Gacko and Ugljevik provide about 70% of total production within the company, owned by the Government of the Republic of Srpska.

In recent months, ERS has been facing major issues, among which is a lack of coal, which twice stopped production in Ugljevik in the middle of winter.

Petar Đokić recently said the entity government doesn’t have EUR 357 million for the stable operation of the two power plants.

As quoted by Capital, now he highlighted the fact that the two coal power plants are more than 40 years old and that a lot of money is needed for their maintenance. It is more profitable to build a new power plant for a stable supply of electricity, according to Đokić.

The government should push harder to build a new coal power plant in Ugljevik

Turning to the intention of the Republic of Srpska to acquire Comsar Energy Republika Srpska, owned by Russian businessman Rashid Serdarov, Đokić noted the firm has a concession for the construction of coal power plant Ugljevik 3 and the exploitation of coal in Ugljevik.

Employees of RiTE Ugljevik, operating the coal mine and 300 MW thermal power plant, are demanding the purchase of Comsar. They argue it is the only way to secure enough coal for the existing facility.

Đokić says the entity government should make an effort to find a financial partner and build a new thermal power plant in Ugljevik.

He recalled that the Republic of Srpska supported Comsar’s Ugljevik 3 project for years. It didn’t work out because the conditions for investments in the coal sector have worsened rapidly since the second half of 2015, Đokić underscored.

The reason is, in his words, the decarbonization agenda to shut down existing coal power plants and avoid the construction of new ones.

Comsar has already offered to the government to take over the firm

Đokić confirmed that the government has received an offer to buy Comsar.

It authorized Gas Res to enter into negotiationsr, which should start after an assessment of Comsar’s value, according to the minister.

Of note, apart from coal issues, RiTE Ugljevik has additional troubles.

In early 2024, the firm started repaying EUR 125 million in damages to Slovenia’s state-owned Elektrogospodarstvo Slovenije Razvoj in Inženjering (EGS-RI), in line with a ruling of the Arbitration Council in Belgrade. In addition, RiTE Ugljevik is obliged to supply one third of the electricity that it produces to EGS-RI until the end of its operation.