Gas

Implementation indicators

  • Unbundling

    Unbundling

    The rules for unbundling are in place only in one entity. Only one out of the three existing transmission system operators
    in Bosnia and Herzegovina has applied for certification. Distribution of gas is performed together with supply and trade
    of natural gas as allowed by the Directive’s de minimis clause.

  • Third Party Access

    Third Party Access

    Third party access is granted under regulated tariffs for only a part of the country’s network in Republika Srpska.
    In the Federation, negotiated third party access still applies to both transmission and distribution networks. No regulated tariffs were adopted. REMIT is not in place.

  • Wholesale market

    Wholesale market

    Bosnia and Herzegovina has not one but two parallel gas markets. The gas market segment of Republika Srpska is deregulated, but a virtual trading point is not operational. In the Federation, the market is foreclosed.

  • Retail market

    Retail market

    Customers in the Federation of Bosnia and Herzegovina are still captive. In Republika Srpska, only a small portion of the retail market is supplied under regulated tariffs. Switching rules are in place.

  • Interconnectivity

    Interconnectivity

    For the single interconnection point between Serbia and Bosnia and Herzegovina, there is an agreement, signed in line with Regulation (EU) 2015/703. Republika Srpska has a security of supply emergency plan.

State of compliance

Once again, Bosnia and Herzegovina failed to adopt a state law which would transpose the Third Energy Package in gas. The long lasting infringement case against Bosnia and Herzegovina, the longest and the most severe “serious and persistent breach” in the Energy Community, continues to be subject to a request for measures by the Ministerial Council.

In the absence of a single legislative framework, Bosnia and Herzegovina’s two entities have adopted two distinct regulatory regimes. Republika Srpska transposed the Third Energy Package in the gas sector in its primary law (the Gas Law of 2018). Its entity regulator, RERS, has adopted a series of acquis-compliant by-laws related to the certification of the gas transmission system operator, direct pipelines, supply of last resort and supply switching rules, tariffs for transmission and distribution networks. The distribution system operators supply less than 100.000 customers.

Gas Promet Pale a.d, one of the entity’s transmission system operators, operates under network system rules adopted by RERS, which do not comply with the network codes on capacity allocation and congestion management. It signed an interoperability agreement with the Serbian operator. The adopted rules established a virtual trading point for Republika Srpska, which at present is non-functional. All transactions are based on bilateral
contracts. The entity regulator received Gas Promet’s application for certification under the ownership unbundling model and issued a preliminary positive decision in April 2020. The Secretariat, in its Opinion 2/20, requested fundamental improvements to ensure compliance. The other operator is Sarajevo-gas a.d. Istocno Sarajevo, a vertically integrated undertaking. In Republika Srpska, only 3,28% of the market share is supplied under public supply conditions. The dominant supplier, the public GAS RES, serves 87% of the retail market in this entity.

The gas market in Federation of Bosnia and Herzegovina is governed by a decree from 2007, which does not transpose virtually any principle of the gas acquis such as regulated third party access or market opening and eligibility of all customers. BH-Gas is a vertically integrated undertaking, established by the Government of the Federation, which dominates the wholesale market in this entity. It holds an import contract with Gazprom Export and acts as a transmission system operator.

The Agreement on Removal of a Serious and Persistent Breach under the Energy Community Treaty in the gas sector, signed at the highest level in 2016 in Sarajevo, exists only on paper and has no actual relevance anymore.
For Bosnia and Herzegovina, the priorities remain the same as in all previous reporting years. Without an agreement on the implementation of the Third Energy Package in gas on its entire territory, the country will not be able to rectify its long lasting breaches of Energy Community acquis nor deliver the ambitious gas investment agenda which would enable the phasing out of its reliance on coal.