The Emission Permits Could Eat all the Profits of Electricity Sector

The Emission Permits Could Eat all the Profits of Electricity Sector

Reducing unemployment in Bosnia and Herzegovina by decreasing carbon dioxide emissions can be achieved. The experts have shown that through “Low Carbon Development Strategy of Bosnia and Herzegovina” and this is only document for which can be said that it treats energy on the state level, explains Azrudin Husika, energy expert and lecturer on Faculty

Reducing unemployment in Bosnia and Herzegovina by decreasing carbon dioxide emissions can be achieved. The experts have shown that through “Low Carbon Development Strategy of Bosnia and Herzegovina” and this is only document for which can be said that it treats energy on the state level, explains Azrudin Husika, energy expert and lecturer on Faculty of Mechanical Engineering in Sarajevo.
He pointed, at the panel held at fair Energa in Tuzla, that Bosnia and Herzegovina is at crossroads and have to choose right direction. He said that there will not be any problems in choosing this direction if we know where we want to go.
He believes that we do not have to enter European Union because entering Energy Community we are already in the EU with this sector.
Because of this we have to start play by rules and one of the reasons is European emission trading system, the EU mechanism which comes down to buy emission permits for electricity sector.
With this directive, which will the member countries of Energy Community will soon accept, thermal power plants can expect new costs in its production and operation.
So besides purchasing the fuel they will have to buy more expensive emission permit.
“The Energy Community Secretariat is already pleading member countries to adopt directive about emission scheme. Bosnia and Herzegovina in still not in community, but in 5 to 10 years additional cost for thermal power plants will be unavoidable. The prices of emission permits now are around 14 BAM per emission permit and organizations concerned about environment in Brussels are lobbying for them to be around 40 BAM per permit”, stated Husika.
From the financial side it would mean that variable costs will increase for 25% and total cost for electric power sector in Bosnia and Herzegovina would be around 150 million BAM, which would eat all the profits that state electric companies made, says Husika.

Taking this fact into account experts through the strategy set criteria for the selections of measures which aim for reduction of costs, strengthening competitiveness, new employment, technology transfers and generating new profits through reduction of greenhouse gas emissions.

One of the measures for reducing greenhouse gas emissions is the use of biomass in the cogeneration systems. These would include small plants which will not be connected to the high voltage but to the medium and low voltage grid.
These would be plants with individual power from 3 to 10 MW. In total it is possible to build 200 MW based only on wood waste, says Husika. There are other estimates that we can make 1,000 to 2,000 MW of plants on biomass, but sustainability of those plants would be questionable.

This would mean 200 direct new jobs, reducing costs of emission permits from 20 to 50 million BAM per year with estimated price of emission permit of 10-25 Euros per permit, stated Husika.

Apart from these measures reduction of greenhouse gas emissions can be done through the increasing the efficiency rate for electricity production from thermal power plants and construction of small hydro power plants, wind power plants, solar power plants and all that is qualified today for incentive tariffs.

Why should we make a shift from traditional energy systems to low carbon technologies? Husika stated that it is because of the competitiveness. “The price of electricity on stock markets in EU is already lower than in Bosnia and Herzegovina and that is because they had long-term thinking and they started long time ago with a mix of renewable energy and fossil fuels”, said Husika.

Renewable Energy Projects in Bosnia and Herzegovina