Energy

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Main BIH Trends

• Energy consumption per capita was the second lowest in Europe with 0.03 quadrillion Btu produced and 0.09 consumed in 1999. More than half of the energy needed was imported.
• There is no crude oil or natural gas production. All natural gas is imported through Hungary and Serbia from Russia.
• In 1996, when the war ended, more than half of the country’s capacity to generate electricity was disabled, and about 60% of the transmission and distribution network was seriously damaged.
• Currently about 80% of capacities are restored, sufficing for the present consumption, which is less than 50% of the pre-war level. Bosnia and Herzegovina was a net importer of electricity in 1999, but in 2000 about 20% of the electricity generated was exported.
• Carbon emissions from the consumption of natural gas, coal, and petroleum in 1999 were 1.2 million metric tons (EIA, 2001).

Background

The most important problem caused by energy production and use is climate change. The climate change problem is related to changes in the concentration of the greenhouse gases (water vapor, CO2, CH4, N2O, and CFCs), which trap infrared radiation from the Earth's surface and thus cause the greenhouse effect. This effect is a natural phenomenon, which helps maintain a stable temperature and climate on Earth. Human activities, such as fossil fuel combustion, deforestation, and some industrial processes have led to an increase in greenhouse gases concentration. Consequently, more infrared radiation has been captured in the atmosphere, which causes changes in the air temperature and precipitation patterns, the melting of ice and a consequent rise in sea-level. Air emission of NOx and SOx from
fuel combustion leaves acidic deposit in water and soil.

The water used for cooling purposes in energy production is returned to its source after use, but at a higher temperature and with a lower oxygen contents, thus causing thermal pollution and oxygen depletion in water bodies. Leaking oil from oil tanks causes water and soil pollution. Dams on rivers cause disturbances in water flow and affect the fauna. According to a recent survey, they also cause an increase in methane emissions from the decay of organic matter in flooded areas (OECD, 2001).

Adverse environmental effects are related to the extraction of fossil fuels (coal, through land degradation and the emission of CH4, and oil through pollution of water and soil caused by leaking and accidents). Coal mining and combustion also generate substantial amount of solid waste. The use of nuclear energy produces nuclear waste, and also represents a great hazard, in case of an accident occurring at a nuclear site during the operation.

Policy Options

One of the largest problems are high subsidies in the energy sector, mostly for nuclear, coal, and oil production. This has the effect of discouraging the introduction of new fuels and technologies that could reduce the adverse impact on the environment. It is, therefore, necessary to make a reform of such subsidies that contribute to harming the environment. In addition, taxes on fuel use should be introduced, that are proportional to the environmental damage the fuels are likely to cause (reflecting, for example, their carbon content) (OECD, 2001).

Solutions to the problems in this sector may be sought in increasing the efficiency of fossil fuel combustion and encouraging the use of renewable energy and new technologies for energy generation. It is necessary to focus on CO2 emission reduction (which means reduction in energy use or switching to low-emission sources).

Many solutions involving alternative energy sources and good technology have been offered that can help to reduce emissions. The problem is that their application and use are still very expensive. It is not to be expected, therefore, that important changes in this regard will have come about by 2020.

Energy in Bosnia and Herzegovina

As of July 2001, BIH energy production, consumption, and infrastructure have not returned to the levels before the war. Energy consumption per capita is the second lowest in Europe with 0.03 quadrillion Btu produced and 0.09 quadrillion Btu (Btu - British thermal unit, contains 1.055 J) consumed in 1999 (EIA, 2001).

In 1999, the country imported 22,000 bbl/day (bbl - barrel, 0.159 cubic meters) of refined oil, because the refineries are out of operation. All natural gas is imported through Hungary and Serbia from Russia. There are two gas companies: Gaspromet Pale and BH Gas (EIA, 2001).

The electricity network in Bosnia and Herzegovina was badly damaged during the war. International donors have contributed about USD 513 million since 1996 for the improvement of the electricity infrastructure. Instead of only one, three utilities have been created - two in the Federation of Bosnia and Herzegovina and one in Republika Srpska (EIA, 2001).

Global Trends and Projections

• Worldwide total energy use will grow by 51% between 1995 and 2020. Total energy use in Eastern Europe and the former Soviet Union will start to grow again, after the decline in the 1990s caused by the economic decline and political reforms.
• OECD countries produce about 74% of the energy they consume. The energy produced from nuclear fuel and renewable sources can currently cover the OECD countries needs. However, it is predicted that the number of countries able to support their own energy needs will decrease by 2020.
• In 1998, the energy and transport sectors were responsible for 80% of total GHG emissions in OECD countries, oil being the main contributor. Emissions of SO2 and CO2 from the energy sector will continue to increase.
• The amount of water used for cooling purposes in energy production has increased dramatically (OECD, 2001).