CZZS | Investing in coal – an economical dead-end

Investing in coal – an economical dead-end

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On the panel discussion “Coal and coal power plants – strategic investment or a waste of money”, held in Ugljevik, the economic analysis of the same name was presented, after Banja Luka. The analysis looks into economic aspects of coal exploitation in Republika Srpska, more exactly the managing of Ugljevik, Gacko, Stanari and plans for the development of new coal TPPs – Ugljevik 3 and Gacko 2.

Igor Kalaba, Energy and Climate Change Program Coordinator, Center for Environment: “ This and the previous analysis we made, we have proved that we are rushing head-first to a complete disaster. Coal TPPs are not only among the worst polluters, but are also economically and socially completely unjustified and unprofitable. Municipalities like Ugljevik and Gacko are the ones most dependent on these facilities, which will be closed in the near future, and new facilities are completely unprofitable due to international obligations of Bosnia and Herzegovina, but also due to the state of the energy market, so they can only hasten our decline to the bottom: environmentally, economically and socially. It is worrisome that neither the governments in BiH, nor municipalities, have any plans for the future. There are no alternative models for the development of these municipalities, and the few voices which protest such a scenario are being either ignored or silenced”.

The analysis was made taking into account the externalities of coal use in coal TPPs, primarily social gains and loss. The main conclusion was that the energy policies and strategies being conducted in RS are wrong and that their realisation will create an indirect social loss which will ammount to BAM 1.445 million in the following 30 years.

Damir Miljević, economist: „The analysis clearly show that the wrong energy policies brought us to the situation which we have today: has brought us to the situation that we have today: TPPs which are not economically viable, concessions compensations which are too low and the development of new TPPs despite their lack of social profitability. Unfortunately, this will result in an increasing price of electricity for domestic consumers and will cause social expenses measured in millions of euro. In order to avoid this shock, the authorities have to, as soon as possible, turn our energy systems towards the alternative models, development of energy efficiency and renewables, and the economies of municipalities which are dependent on coal TPPs have to urgently change their ways, while shifting away from outdated technologies and ways of thinking.



One of the recommendations from the analysis is to keep the old TPP Ugljevik running but with extensive renewal, including a de-sulphurisation unit(for which funding is already found), and optimisation of its business. In this way, the financial loss would be drastically reduced and all new investments would need to be urgently redirected to energy efficiency, reconstruction of infrastructure and towards renewables.

Igor Kalaba: „A shift towards renewables is not simple, but is technically and financially possible and in doing so, we will created new jobs and safeguard the health of BIH’s citizens. This shift is not only possible but unavoidable due to climate change, state of the market and international obligations. What we lack is political will and involvement of wider and expert public, since such decisions are at the moment not made in an expert, but in a political avenue”:

[1] You can download the analysis  here .

The analysis has been published as a part of the “Stop prljavoj energiji – jer budućnost je obnovljiva” campaign which is being conducted by CSOs Centar for Environment (Banja Luka), Center for Ecology and Energy (Tuzla) and Ekotim (Sarajevo). Campaign aims to raise awareness on the dangers from coal powered energy generation, stop the construction of new coal TPPs and promote renewable energy sources and energy efficiency as an alternative approach to the development of BiH’s energy systems.

17 Feb 2017