State Electricity Regulatory Commission BOSNIA AND HERZEGOVINA South East Europe Regional Consultation Meeting Bucharest, Romania 6–7 October, 2016 Session II: Opportunities and Challenges in Renewables Deployment in the Region Mujčinagić Alija State Electricity Regulatory Commission BOSNIA AND HERZEGOVINA

Structure: SLIDE 1: Status of renewables development in Bosnia and Herzegovina SLIDE 2: Encountered challenges in deployment of renewables SLIDE 3: Identified opportunities from the uptake of renewables SLIDE 4: Expected future developments in the frameworks for renewables SLIDE 5: Potential areas of required support

Status of RE Development in Bosnia and Herzegovina Key findings: Adoption of NREAP is a key achievement in the RES development in Bosnia and Herzegovina in 2016 According to NREAP, the overall goal includes the 40.0 % target share of RES in the gross final energy consumption by 2020 Structure of RES production in 2020: - wind 9 % - solar 0.27 % - biomass 1.36 % - hydro 89.37% Share of energy from renewable sources in gross final energy consumption in 2009 was 34.0 % Current RE installed capacity: Solar 11.7 MW Small hydro 91 MW Wind 0.3 MW Biogas 0.4 MW Support scheme for renewables Feed-in tariff or guaranteed purchase price Feed-in premium, in case of production for personal use or free market trade

Encountered Challenges in Deployment of Renewables Legal challenges Legal (legislation and regulations) security is recognized as the most important challenge. Full compliance with EU directive 2009/28/EC is crucial for the improvement Technical challenges Grid access and operation Balancing mechanism Economic challenges Market development issues Cost challenges Political challenges Significant influence on further development

Identified Opportunities from the Uptake of Renewables Increasing security of supply Decentralized production (distributed generation) Environmental impacts (cut in greenhouse gas emissions) Economical impacts (new green energy jobs, new technologies’ development, etc.)

Expected Future Developments in the Frameworks for Renewables NREAP to be regularly updated and harmonized with the latest indicators as well as with actual economic and social possibilities Energy statistic development (lack of actual statistical indicators of the overall final energy consumption, especially concerning biomass, makes it difficult to make a realistic forecast of the final consumption by 2020) It is foreseen that the binding renewable energy target will be exceeded, reaching 43% in 2020 Support schemes development (market based approach - introducing feed-in premium)

Potential areas for Required Support The existing framework for the promotion of energy from renewable sources is not fully compliant with EU directive 2009/28/EC Energy statistics is under development and cannot be used to produce sufficient data for monitoring and updating of the RES sector overview Support scheme improvement