Drought and aging generation capacity raise power supply risk in Bosnia and Herzegovina

Drought exposes dependence on reservoirs

Bosnia and Herzegovina could face restrictions on electricity supplies as drought, aging generation assets and years of delayed investment weaken the country’s ability to meet demand. Energy expert and former prime minister of the Federation of Bosnia and Herzegovina Edhem Bičakčić issued the warning in an interview with N1 television reported by tportal.hr.

Bičakčić said climate change is bringing longer dry periods, fires, extreme rainfall and floods, with direct consequences for energy security. Favorable hydrological conditions this year have helped maintain reservoir levels, but an extended drought could quickly reverse that position. Once reservoirs begin to empty rapidly, he said, supply restrictions become the next available measure after stored water is exhausted.

The risk is amplified by the composition of Bosnia and Herzegovina’s power system. According to data from the State Electricity Regulatory Commission, DERK, more than half of national electricity production still comes from thermal power plants. Renewable sources account for about 45.4% of output, with hydropower providing the largest share, followed by solar and wind generation. This makes a substantial part of the renewable portfolio dependent on rainfall and water availability.

Demand rises while replacement capacity lags

Electricity consumption is increasing as households and businesses install more air conditioners, heat pumps and other electrically powered equipment, Bičakčić said. New production capacity has not expanded sufficiently to match that trend. The combination of stronger demand and weather-sensitive hydropower leaves the system with less room to absorb prolonged heat and drought.

Bosnia and Herzegovina also continues to rely heavily on thermal generation despite committing to follow European energy policies when it joined the Energy Community in 2006. Bičakčić argued that the country has delayed the energy transition and neglected coal production before securing adequate replacement sources. His position is not that the transition should be abandoned, but that existing plants should be retired gradually and only after new capacity has been built.

That sequencing matters for producers and large electricity consumers. An accelerated loss of dependable thermal generation without sufficient solar, wind, hydropower or other replacement capacity could tighten domestic supply during adverse weather. For utilities, it also increases the importance of reservoir management and timely investment decisions, while industrial users face greater exposure to possible restrictions.

CBAM adds pressure for market reform

European carbon rules are creating an additional deadline. Tportal.hr reported that the full application of the EU Carbon Border Adjustment Mechanism, or CBAM, began at the start of 2026. Bičakčić said Bosnia and Herzegovina consequently needs to introduce a carbon dioxide emissions charging system, establish an organized electricity market and enable certification of electricity generated from renewable sources.

He said Bosnia and Herzegovina is the only country that has not established a power exchange and also needs an agency capable of certifying green energy. These missing institutions affect more than domestic system management: carbon costs and proof of renewable origin are increasingly relevant to electricity suppliers and industrial companies serving European markets.

The immediate supply outlook remains tied to hydrology. Reservoirs have benefited from favorable conditions this year, but the underlying constraints—aging assets, limited new capacity, rising electricity use and incomplete market infrastructure—remain unresolved. A prolonged drought would therefore test both physical generation capacity and the pace of Bosnia and Herzegovina’s energy reforms.