USAID Energy Policy Activity Fourth Quarterly Progress Report

The objectives of the project are to achieve better coordination, management, and transparency at all levels of BiH's regulatory framework, a simplified energy policy environment, and targeted technical assistance to integrate BiH's energy sector into regional and EU markets. The project is divided into several components, including the Natural Gas Technical Assistance, Electricity Technical Assistance, and Cross-cutting Assistance on EU Accession Requirements in the BiH Energy Sector. The Natural Gas Technical Assistance component aims to create the preconditions for and development of a BiH natural gas internal market, and its integration into the regional natural gas market. This involves addressing the design and adoption of a number of regulatory and policy reforms, including the unbundling of gas pipelines, open access regulation, and rules on licensing, tariffs, and customer switching. The Electricity Technical Assistance component focuses on enhancing the smart grid features of the electricity network by developing a demand side response mechanism, and instituting intra-day and day-ahead markets. Additionally, this component includes assisting newly unbundled electricity utilities, Renewable Energy Sources (RES) producers, and households and small commercial customers to benefit from a fully operational market. The project also aims to continue the development of the Energy Efficiency Obligation (EEO) to make it fully functional. The Cross-cutting Assistance on EU Accession Requirements in the BiH Energy Sector component provides communication support and assistance to the BiH Ministry of Foreign Trade and Economic Relations (MOFTER) and relevant entity ministries on project work that impacts compliance with the EnC requirements and obligations of BIH as a signatory of the Energy Treaty. The project will develop recommendations for MOFTER on the preparation of integrated national energy and climate plans (NECP). During the fourth quarter of 2020, several significant events took place. The Working Group tasked with drafting the FBiH Law on Natural Gas South Interconnection finalized the first draft of this Law, with EPA's technical assistance. The adoption of this law will enable the expedited implementation of this important project and speed up the permitting procedures. Additionally, EPA developed the final version of the Gap Analysis of the existing BiH legislative framework to identify the gaps for introduction of the virtual power plant concept. The Gap Analysis was discussed and approved by the Working Group and will serve as the starting point for the development of the Guidelines to enable renewable operators and producers to develop virtual renewable energy source power plants and participate in the balancing and wholesale market. Furthermore, EPA worked with the Working Group to develop the final version of the document that proposed the categorization of generators in BiH. The harmonized categorization of generators across BiH is an important issue for the BiH electricity system and a precondition for the continuation of the EPA work on the network codes. It is also an issue that the electricity sector participants could not agree on for a long time, since it crosses different jurisdictions. Additionally, EPA organized the recording of media statements and developed a press release to provide support for the adoption of the Federation Law on Environment. The project also hosted an online Kick-off Public Outreach Working Group Meeting to present the planned activities and agree on the methodology of work. Around 30 representatives from energy ministries, regulatory commissions, and power and gas utilities actively participated in the workshop.