The energy landscape in Bosnia and Herzegovina is undergoing a significant transformation, primarily driven by the rapid growth of small-scale solar installations. The utility company ERS has seen the number of connected solar systems surge to approximately 2,200 units, with nearly 1,900 new installations integrated into the distribution network over the past year. This expansion has resulted in total installed solar capacity exceeding 450 MW, a figure that rivals the output of two conventional thermal power plants.
However, despite this robust growth in renewable energy sources, overall electricity generation for 2025 fell short of expectations. The total production was recorded at 4,366 GWh, which is 143 GWh below planned targets. Both coal-fired and hydropower facilities underperformed, with output declines of 2.8% and 3.48% respectively compared to initial projections. On a positive note, the system achieved a historic low in distribution losses, measured at 8.54%, indicating enhanced network efficiency.
The consumption patterns of electricity reveal persistent structural challenges within the market. Total customer consumption reached 3,831 GWh, divided between public supply and market-based procurement. The regulated supply segment alone incurred an estimated financial deficit of around €30 million, contributing significantly to ERS’s overall negative financial performance.
One major factor behind these financial losses is the persistently low electricity prices, which rank among the lowest in Europe. Executives at ERS have pointed out that aligning tariffs with those in neighboring markets could have led to a markedly different financial outcome. They suggested that pricing electricity at levels comparable to utilities such as EPBiH or Serbia’s EPS would have likely resulted in substantial profits rather than deficits.
The financial strain on ERS has been exacerbated by unfavorable hydrological conditions, leading to an estimated annual loss of around €28 million. Officials at ERS anticipate that production targets for 2026 may also be difficult to achieve, particularly due to diminished output from the Ugljevik thermal power plant. However, improved water inflows could provide some relief from this anticipated shortfall.
Looking ahead, long-term development plans are being evaluated. There is notable interest in constructing three hydropower plants on the Drina River: Rogatica (113 MW), Tegare (112 MW), and Dubravica (87 MW). The proposed ownership structure may involve majority participation from EPS, along with stakes held by ERS and a partner from the Federation of Bosnia and Herzegovina, highlighting potential cross-border cooperation in future hydropower initiatives.
