Bečarević: Uncertain and difficult energy year 2023, and just when we thought it was over, the local sheriff Elek appeared!

By Almir Bečarević

The energy year 2023 began in FBiH with a 20% increase in electricity prices for qualified customers. The price of gas was reduced by 9.6% from 01/01/2023 by the supplier. Fuel prices at gas stations ranged from 2.6 KM to 2.96 KM.

This would be the introduction to the energy year 2023, described in the manner of Branko Cvejić, a famous ex-Yugoslav actor and the main character of the series Grlom u jagode. One might say it was a boring and uninteresting year from an energy perspective, but as in any series, a twist must come.

There were several twists in the energy sector in 2023, and the culmination of all these events was the realization that there would be no more Block 7 of the Tuzla Thermal Power Plant. An investment of almost 300 million KM and the hope that we would continue to be serious players in electricity exports were lost irreversibly. This was the most significant bad news from the energy sector, but as with all other policies, they "brushed the dust off their jackets" and moved on as if nothing had happened. After 15 years, we realized that we had gone "headfirst into strawberries" with this project. The loss will be written off on the books, and the cleared land for Block 7 will be used for, perhaps, a shopping mall.

The adoption of energy laws in the FBiH Parliament was an excuse for the ruling majority in FBiH to claim they had been working on something and that we were on the European path. We won't see that Europe for a long time, but we have seen new price proposals for electricity under those adopted laws. Those who boasted about these laws did not read them carefully and did not notice that we now only have two supply categories: market and public.

This market supply caused a headache for the authorities, so they resorted to an administrative measure to limit the increase in electricity prices to a maximum of 20% in 2024. They adopted the law, and then through the FBiH government, they realized that we are not yet ready for market supply and adopted a Decision declaring a state of endangered electricity supply security for 2024.

Then the public realized that we do not have sufficient quantities of coal for JP EPBIH from our mines, that we still have to buy coal from private mines, that our electricity exports have fallen, that JP EPBIH will operate at a loss, that we are not far from supply reductions, and that we are heading towards becoming an importer of electricity from an exporter. We realized that we are endangered and that this cannot continue, which is why they declared the failure of Block 7.
"Logical," isn't it?

The miners made sure that not everything in this sector was bleak, as they received higher wages and a higher price for coal with the new collective agreement, which should be the basis for the orderly supply of coal to these old and ailing blocks of JP EPBIH.

We adopted the laws, we got an energy regulator, and we stopped there. It will take another year or two for the system to function according to the law, and the market will determine the price of electricity when we realize that we cannot eternally keep electricity prices under such control through administrative measures.

As for natural gas, the situation is such that it is enough to open a window, at least for us in Sarajevo Canton, to see what it looks like when gas consumption in the canton falls. Gas consumption is falling dramatically, polluted air is poisoning us all, and the KS Assembly is adopting the energy balance for 2023 two days before the end of 2023. The KS Government is calming the public with promises to solve the air pollution problem in Sarajevo, as if they haven't been in power for almost 5 years.

At the same time, HDZ declared the Southern Interconnection of interest to the Croatian people and blocked the adoption of the Law on the Southern Gas Interconnection. They also started forming a gas transport company because if the entity of RS can have 3 transport companies, why shouldn't FBiH have two. The fact that gas consumption in BiH has fallen from the former 380 million Sm3 to 210 million Sm3 doesn't concern anyone because national interest is important. The Nova Istočna Interkonekcija gas pipeline is also important for the entity of RS because it connects the friendly Russian and Serbian people, and who cares that there will be no more Russian gas in the EU from 2025. We probably aren't going to the EU, so we don't need to worry. The government at the state level voted for the Nova Istočna Interkonekcija, and for the Južna Interkonekcija, they probably think now is not the time, so they didn't raise their hands. Heavy hands, a difficult EU, so let's wait for better times.

We also had the President of Azerbaijan, Mr. Aliyev, who offered his assistance in the energy sector, especially gas. Serbia accepted the same offer and is initially buying 400 million Sm3, while we will continue to talk about the need to replace Russian gas, but without results.

To ensure that not everything in the gas sector is bleak, Mr. Bećirović, a member of the Presidency, submitted to the BiH Presidency a Proposal for a state law on natural gas transport, regulation, and the internal market in Bosnia and Herzegovina, and together with Mr. Komšić, adopted it at the Presidency and sent it for parliamentary procedure.

As for oil, it has, of course, been controlled by foreign companies based in BiH for years, and the oil terminals will eventually operate at full capacity. Domestic oil traders are still managing to survive in the market to some extent and need our support. The decision on the quality of liquid fuels was adopted by the Council of Ministers, so along with Serbia, we will be the only ones to mark fuel. Europe is also abandoning Russian oil, and we are marking fuel for someone's interests. The Brod Refinery is not operating, but that is already a matter for the smaller entity.

When we consider everything written, we cannot escape the impression that we are truly going "headfirst into strawberries" in energy policies, and our prospects are even bleaker than this overview for 2023 suggests. All energy experts are talking about this, but the current policies are playing dead in the same way as with the polluted air in KS; they are playing dead, just hoping it doesn't explode.

P.S.

Just when we thought the energy year 2023 was over, the local sheriff Elek, director of Sarajevogas I.S., appeared with a request for higher transport prices and a threat to cut off gas to FBiH. It should now be clear why we need the Southern Interconnection and why we need a state Law on Gas. Gas valves at the entrances to BiH should be public property, not "national" interests or the private toys of local sheriffs.