RS citizens pay over EUR 6 million in incentives for small hydropower plants in 2018

The Ministry of Energy and Mining of Republika Srpska (RS), an entity of Bosnia and Herzegovina, has unveiled a list of legal entities and individuals that received electricity production incentives for small hydropower plants from 2016 to 2018.

The list shows that small hydropower plants (SHPPs) received BAM 12.5 million (over EUR 6 million) in incentives, financed by citizens through electricity bills. In 2017, about EUR 4 million in incentives was paid, slightly down from 2016, when the amount stood at nearly EUR 4.1 million, Capital.ba reported.

In 2018, a total of 21 firms received incentives for 27 SHPPs, with the largest amount going to Rogatica-based Hidroinvest. This investor received over EUR 1.5 million in incentives for two small hydropower plants in 2018.

In 2018, a total of 21 firms received incentives for 27 SHPPs, with the largest amount going to Rogatica-based Hidroinvest

A company called EHE followed suit, receiving around EUR 1 million for two SHPPs, ahead of Elektrodistribucija Pale, a subsidiary of state power utility Elektroprivreda Republike Srpske (ERS), with some EUR 860,000, and Eling MHE, which got some EUR 700,000.

Even though critics say the concession fee and incentive system in place for small hydropower plants in BiH is economically unviable, Republika Srpska will continue subsidizing electricity production by SHPPs, Capital.ba wrote.

Instead of abolishing incentives for small hydropower plants, the changes to the law scrapped incentives for wind farms, which have a far less negative environmental impact

Despite ERS acting General Manager Luka Petrović having announced that incentives for SHPPs would be scrapped, the RS parliament recently adopted changes to the law on renewable energy sources and efficient cogeneration, proposed by the entity’s government. Instead of abolishing incentives for small hydropower plants, the changes repealed incentives for wind farms, which have a far less negative environmental impact, the portal wrote.

This is one of the major changes in the regulatory framework recently announced in the countries of the Energy Community, including Northern Macedonia, Bosnia and Herzegovina, and Montenegro.