Bosnia and Herzegovina is at a turning point in the development of its electric power infrastructure, facing both challenges and opportunities brought by the energy transition. By signing the Energy Community Treaty, BiH has committed to transposing EU Directives into national legislation, focusing on implementing renewable energy sources, the inclusion of prosumers, and the development of smart grids.
In this article, the Center for Energy, Environment, and Resources – CENER 21 spoke with energy expert Esma Manić, who shares her insights on legislative changes, technical improvements, and potential solutions for a sustainable and stable energy future in Bosnia and Herzegovina.
Prosumers (producer + consumer) are end-users who both produce and consume electricity from renewable sources. Their role is becoming increasingly important in the context of legislative changes that Bosnia and Herzegovina must align with EU directives, including the “Clean energy for all Europeans” package. This package lays the groundwork for the decarbonization of the energy sector, enabling greater involvement of citizens and small businesses in the production of clean energy.
According to Ms. Manić, Bosnia and Herzegovina’s legislation already recognizes the concept of prosumers and energy communities through a set of energy laws. A prosumer is defined as an end-user who produces energy from renewable sources for their own needs, while energy communities, as legal entities, use renewable sources to generate electricity. Since the energy transition is an inevitable process, the inclusion of prosumers and energy communities plays a key role in creating a decentralized and sustainable energy network. These models not only enable greater energy supply independence but also provide a more equitable distribution of the benefits that come from using renewable energy sources.
“Including prosumers and Renewable Energy Communities in the grid will significantly impact energy security, contribute to reducing energy poverty, and play a crucial role in the decarbonization process. Besides that, local production and consumption will reduce losses and positively affect grid stability. The main challenges for widespread implementation are primarily economic, due to the initial investment required for building facilities. By addressing the issue of initial investment for socially vulnerable groups, the so-called ‘citizen energy’ process can greatly influence the success of the energy transition,” explains energy expert Esma Manić.
When asked whether the power grid of Bosnia and Herzegovina is flexible enough to receive the excess electricity that prosumers will produce and how it is planned to be solved, Ms. Manić explains:
“Although the inclusion of prosumers and Renewable Energy Communities can enhance energy security and decarbonization, the current distribution grids in Bosnia and Herzegovina are not equipped to manage energy from distributed, variable sources. These grids were designed for centralized energy production, where energy flows were unidirectional and production was predictable, ensuring stability and balance between supply and demand. With the introduction of distributed generation, energy is produced at multiple points, and sources are often variable, creating a challenge for balancing the grid. To successfully integrate these variable sources, grids must be upgraded, particularly through the installation of smart meters that enable two-way measurement and precise energy management, without which no prosumer or renewable energy producer can connect to the grid.”
Ms. Manić further explains: “To integrate the growing number of distributed sources into the grid, a significant transformation of the power networks is necessary to make them more flexible and adaptable to a larger number of variable sources. This shift demands flexibility to handle these fluctuating energy sources, which poses one of the key challenges for distribution companies. Their responsibility includes ensuring stable and high-quality electricity supply despite the increasing number of these sources.”
The only way to overcome this challenge is by upgrading the grids with advanced technical solutions known as “smart grids.” Smart grids are advanced energy systems that use digital technology to monitor and manage the distribution of electricity, enabling more efficient use of resources, cost reduction, and improved reliability of supply.
Unlike traditional grids that operate on a one-way distribution model from centralized producers to consumers, smart grids integrate information and communication technologies (ICT), enabling dynamic two-way information exchange between producers, distributors, and consumers. This integration optimizes grid management and enhances the overall efficiency of the system.
In brief, smart grids represent a significant evolution in electrical network technology, focusing on automation, communication, and integration of renewable sources, while traditional grids are characterized by a rigid, more centralized, and less efficient system, explains Ms. Manić.
When asked about the primary benefits of introducing smart grids in Bosnia and Herzegovina, Ms. Manić responded that they bring numerous advantages crucial for enhancing energy infrastructure, with the most important being the integration of renewable energy sources. However, without modernizing infrastructure, such as installing smart meters, the integration of prosumers into the grid is not possible. Smart grids enable optimization of energy distribution and reduction of losses, which significantly improves energy efficiency. Also, a key advantage of smart grids is the active role of consumers, who can not only monitor and control their own energy consumption but also directly impact the stability and efficiency of the grid, especially during peak load times and high energy prices. Furthermore, smart grids pave the way for new services, technologies, and job opportunities in the energy sector.
Regarding plans for the development of smart grids in Bosnia and Herzegovina, Ms. Manić highlighted that BiH, as a signatory of the Energy Community Treaty and the Sofia Declaration, is clearly committed to sustainable development in the energy sector. The document “Integrated National Energy and Climate Plan of Bosnia and Herzegovina” (NECP) envisions a complete restructuring of the energy sector, including the introduction of smart technologies in energy production, transmission, distribution, and consumption. The implementation of smart grids and renewable energy technologies will play a crucial role in achieving decarbonization goals and the European energy and climate strategy. However, there are significant barriers to the adoption of smart grids in BiH, including a lack of infrastructure, high implementation costs, and the need for comprehensive education and training of personnel. Addressing these challenges is crucial for the successful adoption and integration of smart grids into the country’s power system.
To achieve this, BiH can learn from successful implementations of smart grids in neighboring countries like Croatia and Slovenia. In Croatia, the “Advanced Grid Pilot Project” covered five distribution areas, where it increased the efficiency of electricity distribution, reduced the number of unplanned outages, and expanded the number of users with access to advanced grids. Notably, the project by Croatian Electrical Utility in Koprivnica implemented a self-healing smart grid based on a decentralized approach and wireless technology. This grid can detect and resolve power outages within 0.3 seconds, so quickly that household devices do not even experience the outage, moving towards autonomous smart grids that will utilize artificial intelligence. In Slovenia, the introduction of advanced technologies and smart metering infrastructure has allowed, on certain days like May 3, 2024, for renewable energy consumption coverage to reach 78.6%, and on May 4 of the same year, it even surpassed 100.7%. “In addition to these examples, there are several others that could be beneficial for the development and planning of smart grids in BiH,” Ms. Manić notes.
The future of Bosnia and Herzegovina’s power infrastructure over the next decade requires urgent and comprehensive transformation to meet decarbonization goals. The introduction of smart grids and the modernization of power systems are crucial steps toward a sustainable and stable energy future.
“Given that BiH has committed to decarbonization and defined emission reduction targets through the NECP, it is essential to accelerate the improvement of energy infrastructure. In addition to capacity development, it is crucial to create realistic plans for implementing advanced metering infrastructure, automation, and digitalization, to introduce smart grids that enable active participation of all network actors. Without modernizing infrastructure and transforming it into smart grids, the set decarbonization goals will not be achievable. BiH can learn from the experiences of other countries and use best practice examples to overcome barriers and achieve its energy goals. Ultimately, only through coordinated efforts in developing advanced energy infrastructure can BiH ensure long-term energy security, reduce emissions, and achieve sustainable development goals,” concludes Ms. Manić.
Conducting an interview on the future of power infrastructure in Bosnia and Herzegovina represents efforts of the non-governmental organization Center for Energy, Environment, and Resources – CENER 21 – towards enhancing public capacity through informing and engaging them with the topic of energy security. This activity is carried out within the framework of the “Contribution to energy security (Security of Supply) through green energy transition – SoS,” project supported by the SMART Balkans National interventions grant line, which aims to support energy transition, strengthen energy security in Bosnia and Herzegovina, and contribute to fulfilling national/entity strategic documents and the Green Agenda for the Western Balkans in Bosnia and Herzegovina.