Municipal Network for Energy Efficiency

Bosnia and Herzegovina (BiH) has experienced massive economic and political changes since the collapse of the former Yugoslavia in 1992. Currently, the country is largely decentralized and consists of two state-like entities, the Federation of BiH (Federation), and the Republika Srpska (RS) and District Brcko. The Federation is further decentralized and made of ten cantons.

The complexity of political and organizational structures extends to the energy sector where the state-like entities own and oversee three electric power companies, an oil refinery, natural gas transmission and distribution utilities, and coal mines. District heating facilities fall under the responsibility of municipal (RS) and cantonal governments (Federation). This is a unique arrangement that has emerged as a consequence of the complex political situation.

Some of the major problems facing the energy sector in BiH today include an unclear authority over energy issues, the absence of a long-term energy strategy on the state level, and the absence of energy statistics and laws.

According to available data, production and consumption of energy and the condition of energy infrastructure have not yet reached the pre-war level. With the existing level of energy intensity, more than 20 percent of national GDP is spent on energy, a clear indicator that significantly more attention has to be paid to energy efficiency.

The Alliance had several approaches to make short- and long-term impacts on energy efficiency in BiH:

Municipal Energy Management: BiH is lacking the legal and political basis for efficient decision-making and for delegation of responsibilities for energy and energy efficiency to different levels of government. Knowledge about energy management in the municipalities is scarce.
The Alliance developed a Municipal Energy Efficiency Committee which brought together representatives from 25 BiH municipalities. Goals of the Committee were to:

• Train municipal leaders and managers in the basics of energy and water management concepts
• Train municipal managers on how to develop business plans, short and long term strategies for energy efficiency improvements in their municipalities
• Help municipalities develop and implement energy efficiency pilot projects in schools, hospitals, and water utility companies, etc.
• Help the Alliance understand where legislative changes or clarifications are needed to encourage municipal utilities to achieve full cost- recovery and to provide incentives for municipal buildings to reduce energy expenses
• Promote energy efficiency on the municipal level.

District Heating Reform: District Heating Companies in BiH are faced with low collection rates due to the great number of consumers who do not pay the heating bills. Low level of payment does not allow for investment in maintenance of or upgrades in the system. A recently adopted Law on Consumer Protection states that the supplied energy is to be paid in accordance with consumption itself rather than by square meter, which is the present case. As a result, the system must be switched to individual heat metering. It is major priority in terms of better quality of service and better management of district heating system.

The Alliance implemented a pilot project in the residential sector to demonstrate the savings that can be achieved using low-cost weatherization techniques in residential buildings with district heating.

The project was co-financed by the municipality in which the project will take place and implemented by the District Heating Company of Sarajevo. The results showed that individual metering and low-cost weatherization are the easiest ways to achieve strong energy savings, reduce energy bills, improve quality of service and raise collection rates.

Water Reforms Due to the age of the water system, inadequate maintenance in the last decade and absence of adequate technology and qualified personnel, water utility companies suffer great losses in their systems. Approximate losses in the water supply systems in BiH are over 50%. As well, a great amount of water is pumped into and through the system, leading to enormous bills to be paid by someone (consumers, the utility, the city) for electric energy. The low level of payment and the absence of industry are the main causes of the accumulating debt of the electricity distribution company. In certain cases, the debt exceeds $400,000.

The Alliance worked with water utility companies to:

• Train water managers in the basics of water and energy management
• Train water utility personnel on how to develop leak reduction plans and use water leak reduction equipment
• Establish energy management cells within water utility companies
• Encourage water utility companies to share experience and knowledge with neighboring cities
• Introduce a more systematic approach to water management, such as software programs that help regulate and optimise flow through the system
• Introduce no-cost/low-cost options for saving electricity.

For more Information, contact: Angela Morin Allen.

This Project was funded by the United States Agency for International Development