Bosnia and Herzegovina’s current system of concession fees and incentives for small hydropower plants is economically unjustified and is socially harmful, as it produces direct social and financial losses of more than BAM 4 million (EUR 2 million), concludes a new analysis by mr. sc. Damir Miljević and commissioned by the Center for Environment.
“The total societal damage resulting from further application of this model of subsidising electricity generation in small hydropower plants for the next 10 years, on the basis of already operating plants alone, is estimated at more than BAM 40 million (EUR 20 million), and would be doubled if subsidies are approved for all the plants that have applied,” stated Miljević.
He emphasises that the current system of concession fees and incentives for small hydropower plants needs to urgently undergo significant changes, and needs to be redefined to avoid further societal damage: “We need to avoid increasing the total social losses which will result from new small hydropower plants that are planned or are already under construction”, he concluded.
Center for Environment’s work on the problem of rapid small hydropower development in Bosnia and Herzegovina has already proven that it is mostly investors that benefit from their construction and that the fee for the development of renewable energy sources paid by the public on electricity bills is not justified by any kind of public interest.
“Considering that all electricity consumers in Bosnia and Herzegovina pay a fee for the development of renewable energy sources on their monthly electricity bills, it would make more sense to use the money for reducing energy wastage and sustainable renewables such as solar and wind. Hydropower plants bring much more harm than benefits, and this analysis once again proves this, this time exclusively from a financial feasibility angle”, stated Nataša Crnković, President of the Center for Environment.
The system is highly attractive for investors and has caused a rush for concessions and subsidies, threatening almost every watercourse in Bosnia-Herzegovina.
Bosnia and Herzegovina’s Entity-level governments have mainly based their plans to fulfill their international binding targets for the share of renewable energy in total final energy consumption on building new capacity instead of reducing energy wastage. The current system for issuing concessions is complicated, chaotic and unbalanced, with excessive space for discretion in decision-making, which opens space for manipulation, corruption and unfair competition.
This analysis has been carried out as part of the campaign „Save the Blue Heart of Europe“ by RiverWatch and EuroNatur, in co-operation with local partners across the Balkans.