New Federation of Bosnia and Herzegovina Electricity Law

The Electricity Law, published in the Official Journal of the Federation of Bosnia and Herzegovina No. 60/23, lays down the groundwork for liberalising the electricity market and facilitates clean energy transition pursuant to EU standards and rules.

Objectives of this piece of legislation include simplifying administrative requirements for building and operating renewable power generation facilities, primarily solar and wind farms, and introducing new categories of electricity stakeholders and activities (active customers, aggregators, citizen energy communities, and energy storage operators), as well as ensuring closer oversight of electricity stakeholders.

Key changes from previous rules:

1. Active customers and citizen energy communities as new categories of market players

‘Active customer’ means a final customer, or a group of jointly acting final customers, who consumes or stores electricity generated at the point of consumption or who sells self-generated electricity or participates in flexibility or energy efficiency schemes, provided that those activities do not constitute its primary commercial or professional activity.

‘Citizen energy community’ means a legal entity that is based on voluntary and open participation and is effectively controlled by members or shareholders that are natural persons, local authorities, including municipalities, or small enterprises, within the meaning of accounting and auditing regulations.

Active customers and citizen energy communities may generate electricity for their own consumption and sell any excess electricity generated.

Active customers may operate in the market either independently or through aggregators, sell self-generated electricity, and participate in flexibility or energy efficiency schemes.

Citizen energy communities must obtain operating permits from the Regulatory Commission.

2. Electricity storage and aggregation of distribution resources as new electricity activities

Energy storage operators are not required to hold permits for storing energy where such energy is stored in:

• storage facilities with an aggregate capacity of up to and including 500 kW;
• during the trial operation of the facility for up to six months from the date the operating permit for the facility is issued;
• in a facility located after a metering point of an active customer that is used exclusively for the active customer’s own purposes, without any electricity being sold back into the grid; and i
• in a facility used exclusively for distributing electricity.

3. Energy permits are no longer required for electricity generation and storage

Electricity generators, including active customers operating facilities with an installed capacity of less than 1 MW are not required to obtain energy permits to build those generating facilities.

Energy permits are also not required for hydropower plants with a capacity of less than 10 MW, excepting for hydropower plants using gravity-fed water systems.

No permit is also necessary for energy stakeholders that generate electricity solely for their own consumption and do not feed energy back into the distribution grid.

The new rules simplify the permitting procedure for generating facilities by no longer requiring certificates attesting that design documents comply with the Electricity Law and stipulating less onerous network connection rules.

These less restrictive energy regulations are expected to help all interested persons enter the electricity market, which will promote investment in the electricity sector and foster its development whilst also safeguarding the environment.