Bosnia and Herzegovina’s reliance on hydropower is linked to an estimated €210mn swing in electricity-sector value between particularly wet and dry hydrological years. The exposure reflects how changes in rainfall and river flows can move hydro generation away from expected levels. An analysis cited energy expert Zijad Bajramovic when assessing production patterns across large Bosnian plants.
Hydro generation range across eight-year average
Large Bosnian hydropower plants produced an average of around 5.3 TWh per year over the past eight years, according to the cited analysis. Actual output can diverge sharply from that benchmark depending on hydrological conditions. The report uses the gap between 2023 and 2020 to show the scale of variation.
In 2023, strong hydrology lifted hydropower production to 6.4 TWh, about 21% above the eight-year average. The higher output translated into approximately 1.1 TWh of additional hydroelectricity. That volume reduced the need for thermal generation and imports while increasing electricity available for export.
Using an assumed wholesale power value of €100/MWh, the incremental 1.1 TWh would have been worth around €110mn. In contrast, dry conditions in 2020 reduced hydro output to 4.3 TWh, about 19% below average. The resulting production deficit was approximately 1 TWh, which would equate to about €100mn under the same wholesale price assumption.
TWh differences translate into large financial exposure
The spread between the two years therefore reaches approximately 2.1 TWh. That amount is equivalent to around 40% of average annual generation from Bosnia and Herzegovina’s large hydro plants. Valued at €100/MWh, it corresponds to an estimated difference of roughly €210mn.
The report also notes that financial effects from poor hydrology can exceed a straightforward valuation of lost generation. When hydro output falls, utilities may need to replace relatively low-variable-cost generation with more expensive thermal production or imported electricity. This can weaken operating margins and cash flow at times when companies require investment in networks, generation and decarbonisation.
Portfolio diversification and flexibility requirements
The same mechanism can work in reverse during wet years, improving trading positions and lowering thermal dispatch needs while creating export opportunities. The volatility therefore supports the case for broadening Bosnia and Herzegovina’s generation portfolio beyond hydropower alone. Additional wind and solar capacity could reduce the direct link between electricity availability and river flows, though variable renewables would still require flexibility as penetration grows.
The report points to battery storage, flexible conventional generation and stronger regional interconnection as additional elements alongside renewable development. It frames the issue as reducing earnings volatility rather than only increasing annual generation levels. For Bosnia’s electricity companies, hydrology remains both a production factor and a material financial risk factor, with annual changes affecting the sector’s power balance by terawatt-hours and its economic position by hundreds of millions of euros.
