Power utility Elektroprivreda BiH posts all-time high annual loss for 2023

A lack of coal, bad hydrology and obsolete production facilities pushed Elektroprivreda Bosne i Hercegovine (EPBiH) deep into the red. Bosnia and Herzegovina’s state-owned power utility suffered a loss of EUR 169 million, four times higher than it expected. The Zenica coal mine, with almost 600 employees, is about to be shut down.

Elektroprivreda BiH, controlled by the Government of the Federation of Bosnia and Herzegovina, revised its 2023 loss to EUR 169 million, from EUR 72.3 million, which it reported in February. Earlier it projected the gap at EUR 40.8 million.

The Federation of BiH is one of two political entities making up Bosnia and Herzegovina. The other one is called the Republic of Srpska.

All that even before the introduction of a national emissions trading system or another kind of carbon pricing, while the European Union is set to start taxing, in 2026, the carbon dioxide emissions from imported electricity. The scheme is called Carbon Border Adjustment Mechanism (CBAM).

Surplus electricity output in 2023 amounted to only 50 GWh

EPBiH became the owner in 2009 of seven firms that operate mines. Some are near insolvency, there is not enough coal and thermal power plants are obsolete. On top of it all, water flows at the utility’s hydropower plants were unfavorable.

“We needed mines before, we need mines today, we will need mines in the forthcoming period. But we need mines that will live off the ton of coal they produce and operate self-sufficiently and create the financial conditions to finally buy equipment and return the loans that Elektroprivreda gave them. Concerning what this management is criticized of – that it doesn’t know how to sell energy surpluses – the diagram clearly shows that from 2009 until the end of 2023 EPBiH came down from an average 2,000 GWh to 52 GWh. These are the surpluses that we can sell,” General Manager Sanel Buljubašić pointed out.

Coal mines accumulated losses of over EUR 500 million in 15 years

The mines Kreka, Zenica and Gračanica have suffered losses of EUR 59.7 million in total. The rest are profitable, Buljubašić explained.

EPBiH invested EUR 176 million in mines in the past 15 years, he stressed. They accumulated losses of an overall EUR 538 million, the CEO said.

The company obtains 80% of the energy it generates from coal, he noted. If there was no pandemic and the war in Ukraine, already two years ago the situation would be like now, Buljubašić opined.

General Manager Sanel Buljubašić is optimistic that EPBiH will recover

“I assure you that we will be stable again and that we will generate surpluses for the area outside of BiH,” he stated.

Be as it may, without mines and miners the thermal power plants would have to turn to coal imports, which is even less economical. That’s if they can even find any in the market and if they have the logistics to haul it.

In addition, Buljubašić says that for the past five years EPBiH has 500 workers less than necessary in production and power distribution.

The RMU Zenica coal mine ceased operations back in March, awaiting official closure. The business has almost 600 employees. Unionists are highlighting the delays in the payment of pension contributions dragging on for ten or twelve years.

Investments in revitalization of coal plants, desulfurization

Buljubašić added that the company would invest EUR 230 million in the Kakanj coal plant. Its unit 5 was supposed to be shut down already two years ago. So was the Tuzla thermal power plant’s unit 4, which the CEO said would be revitalized. At the same time, EPBiH is preparing projects for the installation of desulfurization facilities. Also underway are major investments in renewable energy sources.

Of note, the Regulatory Commission for Energy in Federation of BiH (FERK) approved a week ago an increase in power prices for households, including the network fee, by 10%. The decision is scheduled to come into force on August 1.