Goverment of FBiH intends to extend operation of two units in coal power plants Kakanj, Tuzla

epbih kakanj tuzla units opt out mechanism

Kakanj power plant (photo: EPBiH)


March 2, 2022


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March 2, 2022


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The Government of the Federation of Bosnia and Herzegovina has proposed to the Parliament of the Federation of BiH to approve the extension of the operation of the 200 MW unit 4 in the Tuzla thermal power plant and 110 MW unit 5 in the Kakanj thermal power plant. They are due to be shut down in line with the European Union’s Large Combustion Plants Directive (LCPD).

The FBiH government made the decision based on the request of power utility Elektroprivreda BiH (EPBiH) to extend the work of its two units and the analysis of the Federal Ministry of Energy, Mining and Industry on the implementation of the government’s decision to limit the increase of the electricity prices.

Elektroprivreda BiH has stressed that two units are needed to provide sufficient quantities of electricity for its customers, preserve the stability of the BiH power system and energy independence, and mitigate the possible reduction in natural gas supplies. The shutdown of two units would leave the city of Tuzla and the towns of Kakanj and Lukavac without heating.

BiH is joining Montenegro, which was the first country to fail to meet its commitment as a member of the Energy Community

If the decision is adopted, the Federation of BiH will join Montenegro, another member of the Energy Community, which has not complied with its obligation to stop the operation of thermal power plant Pljevlja after using up to 20,000 working hours in the opt-out mechanism.

The mechanism was accepted by all contracting parties of the Energy Community, including Serbia, as an alternative to implementing the LCPD directive, an instrument for reducing air pollution and greenhouse gas emissions. The mechanism allows for an exemption of individual large combustion plants from the compliance regime, which means additional time for utilities to modernize TPPs in line with the LCPD standards or prepare for their shutdown.

Ten units in coal-fired power plants in BiH, Montenegro, and Serbia operate within the opt-out regime. In exchange, the plants are not allowed to be operated for more than 20,000 operational hours between January 1, 2018, and December 31, 2023. After 20,000 operating hours are spent, and a power plant is not modernized, it must be closed.

Two units have used 90 percent of the allowed hours

By the end of 2021, according to the announcements of the FBiH government and the EPBiH, unit 4 in TPP Tuzla and unit 5 in TPP Kakanj have used up 90 percent of the 20,000 working hours allowed by the end of 2023.

The federal ministry said a significant reduction in electricity production from TPPs is expected in the coming period due to the limited operation of unit 4 in TPP Tuzla and unit 5 in TPP Kakanj.

EPBiH: The shutdown of two units would cause problems in coal mines and district heating systems in Tuzla, Kakanj and Lukavac

Given that other units in EPBiH’s coal-fired power plants are also obsolete, their frequent unplanned outages due to failures and lack of reserves in the system, it would result in expensive imports to meet the needs of domestic consumers and fulfill contractual obligations, the government said and added that EPBiH would be in a complicated situation.

The company’s position is further complicated because the implementation of projects for new production capacities from renewable energy sources has slowed down, and there is also a delay and uncertainty with the Tuzla 7 coal plant project.

Lower production in TPPs would also reduce the production in coal mines and endanger their business. In the end, with the lower electricity production in coal-fired power plants, district heating systems in Tuzla, Kakanj and Lukavac would be left without a heating supply, the government said.

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