The energy sector in Bosnia and Herzegovina is undergoing significant transformation, particularly within the utility company ERS, driven by a rapid increase in small-scale solar installations. Currently, there are approximately 2,200 connected solar systems, with nearly 1,900 new installations added to the distribution network over the past year. This surge has elevated total installed solar capacity to over 450 MW, which is on par with the output of two conventional thermal power plants.
Despite this impressive growth in renewable energy, overall electricity generation fell short of expectations in 2025. The total production stood at 4,366 GWh, falling 143 GWh below planned targets. Both coal-fired and hydropower plants experienced declines in output compared to forecasts, with reductions of 2.8% and 3.48%, respectively. However, the system achieved a notable milestone with distribution losses dropping to a historically low rate of 8.54%, indicating enhanced efficiency across the network.
The consumption patterns of electricity users highlight ongoing structural issues within the market. Total consumption reached 3,831 GWh, divided between public supply and market-based procurement. The regulated supply segment was particularly problematic, generating an estimated financial deficit of around €30 million, which has adversely affected ERS’s financial standing.
A critical factor contributing to these financial challenges is the persistently low electricity prices in Bosnia and Herzegovina, among the lowest in Europe. Company executives have suggested that aligning tariffs with those of neighboring markets could have significantly altered financial outcomes. They argue that pricing electricity at levels comparable to utilities such as EPBiH or Serbia’s EPS would likely have led to profits rather than losses.
The financial strain was exacerbated by unfavorable hydrological conditions, resulting in an estimated annual loss of approximately €28 million. Looking ahead, ERS officials express concerns that production targets for 2026 may also be unmet due to reduced output from the Ugljevik thermal power plant. However, they remain hopeful that improved water inflows could alleviate some of this anticipated shortfall.
Amid these challenges, long-term development plans are being evaluated. There is interest in constructing three new hydropower plants along the Drina River: Rogatica (113 MW), Tegare (112 MW), and Dubravica (87 MW). A potential ownership model for these projects may involve majority participation from EPS, along with shares held by ERS and a partner from the Federation of Bosnia and Herzegovina. This reflects a growing trend towards cross-border cooperation in future hydropower initiatives.
