Gacko Thermal Power Plant

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Gacko Thermal Power Plant is an operating power station of at least 300-megawatts (MW) in Gacko, Republika Srpska, Bosnia and Herzegovina with multiple units, some of which are not currently operating. It is also known as Gacko II (Unit 2).

Location

Table 1: Project-level location details

Plant name	Location	Coordinates (WGS 84)
Gacko Thermal Power Plant	Gacko, Gacko, Republika Srpska, Bosnia and Herzegovina	43.172137, 18.511555 (exact)

The map below shows the exact location of the power station.

Loading map...

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Unit-level coordinates (WGS 84):

• Unit 1: 43.172137, 18.511555
• Unit 2: 43.172259, 18.512728

Project Details

Table 2: Unit-level details

Unit name	Status	Fuel(s)	Capacity (MW)	Technology	Start year
Unit 1	operating	coal: lignite	300	supercritical	1983
Unit 2	pre-permit	coal: lignite	350	supercritical	–

Table 3: Unit-level ownership and operator details

Unit name	Owner	Parent
Unit 1	Rudnik i Termoelektrana Gacko AD [100%]	Elektroprivreda Republike Srpske AD
Unit 2	Gacko Thermal Power Plant, Development and Investment doo [100%]	Elektroprivreda Republike Srpske AD [100.0%]

Project-level coal details

• Coal source(s): Gacko coal mine

Background

The 300 MW plant began operating in 1983, and is owned and operated by Elektroprivreda Republike Srpske (ERS). It is a supercritical power station and sources 1.8 million tonnes of lignite coal a year from the nearby Gacko coal mine.

In May 2023, it was reported that ERS was considering co-firing waste (refuse-derived fuel, RDF) at the Gacko Thermal Power Plant. The company was pursuing a preliminary environmental impact assessment for the pilot project, which would burn up to 1,200 tons of waste per day.

Old Expansion plans

In 2006, the major Czech utility company CEZ reached an agreement with ERS to form a joint venture company, Nove Elektrarne Republike Srpske (NERS), which would upgrade the existing plant, built a second unit at the power station and expand the nearby Gacko coal mine. In return for investing €1.5 billion in the project, CEZ gained a 51% stake in the new joint venture company.

In January 2009, CEZ pulled out of the deal stating that it was because of "repeated breach of the implementation contract by its partners in Bosnia and Hercegovina."

In March 2022, the environmental permit for the mine project was cancelled by the District Court in Banja Luka. A lawsuit had been filed by the Center for the Environment after the mine's Environmental Impact Study was initially approved by the Ministry of Spatial Planning, Construction and Ecology. The power plant expansion is presumably shelved.

2012 Energy Strategy

The proposed Gacko units were mentioned as one of two possibilities in the "2012 Energy Strategy of Republic of Srpska up to 2030." In this document, the project was described as a 300 MW replacement unit for the current Gacko station. The other possibility was that the lifetime of Gacko 1 would be extended to 2035 rather than 2020.

Arbitration decision

In 2014, an arbitration panel imposed an obligation on Elektroprivreda RS to purchase from CEZ its equity stake in Nove Elektrane Republike Srpske for 2 million euros, plus contractually defined interest. In addition, CEZ was to receive the same amount of 2 million euros plus late-payment interest as liquidated damages, bringing the total amount that the Czech company will receive to approximately 7.5 million euros.

In February 2015, the Minister of Mining and Energy of Republika Srpska in Bosnia and Herzegovina, Petar Đokić, restated the country's plans to build a new 300 MW thermal power plant in Gacko.

MoU agreements

In May 2015, Bosnia's Serb Republic said it planned to sign a memorandum of understanding with China’s Dongfang Electric Corporation (DEC) for the construction of a 350 MW unit at Gacko plant. Construction on the new unit was expected to begin in spring 2015. Dongfang would potentially secure 85% of the credit funds for the construction of the unit, possibly through a Chinese state-owned bank.

In April 2017, the Bosnia Minister of Industry, Energy and Mining signed a MoU agreement for construction of Gacko 2 with Chinese companies China Investment & Development Company and China Machinery Engineering Corporation.

In December 2017, state-owned utility Elektroprivreda Republike Srpske signed a MoU for the plant with China Machinery and Engineering Corporation (CMEC) and Emerging Markets Power Fund.

New Expansion Plans

In August 2022, shelved expansion plans appeared to be revived. Due to energy security concerns in light of the war in Ukraine, reliance on coal was once again on the rise in the western Balkans. According to the Government of the Republic of Srpska, private Czech company Witkowitz was interested in building a 350 MW Unit 2 at the Gacko plant. The investment was valued at EUR 521 million. A Memorandum of Understanding was to be signed "soon", but there was no apparent news on the memorandum later on.

A report by the Institute for Energy Economics and Financial Analysis from October 2022 showcased the poor economics of the project, adverse impact on the environment and public health and bad timing.

However in October 2023, reporting indicated that Gacko II was still in a planning phase. The unit was described as a 350 MW supercritical unit designed to provide base load grid capacity. A new company was founded in mid-2023 - 'Gacko Thermal Power Plant, Development and Investments' for obtaining various types of permits, and Elektroprivrede Republike Srpske said that the main goal is to look at the possibilities of further development of this facility. According to media report from late 2023, ERS has not provided financial resources for now, but options are open for a new investor from Europe or the world interested in such an energy project.

A request for a preliminary environmental impact assessment was submitted to the Ministry of Spatial Planning, Construction and Ecology in October 2023. In late 2023, three controversial tenders were launched for a total value of 3.5 billion KM for developing documentation and obtaining an environmental permit and a construction permit. In May 2024, the contract for developing the technical documentation was awarded to Institute for Civil Engineering IG after their appeal, even though it was the most expensive contract. A media source from July 2024 implies that since the formation of the new company, the public procurement procedures and the contracts awarded are dubious, alleging to pre-arranged deals.

Draft NECP

In April 2023, Bosnia and Herzegovina announced a draft national energy plan until 2030 that foresees no new coal-fired plants. The Energy Community Secretariat published its recommendations on the draft National Energy and Climate Plan (NECP) of Bosnia and Herzegovina in December 2023. The final NECP has to be submitted by the end of June 2024. As of September 2024, the final NECP has not been presented yet.

Financing

• Source of financing: MoU signed for the plant with China Machinery and Engineering Corporation (CMEC) and Emerging Markets Power Fund (Proposed in 2017).

Analysis of the project by Bankwatch economist in 2018 found that although the official feasibility study for Gacko II claimed it would generate profit of around EUR 23 million per year, more realistic input data on price and demand would lead to a loss of minimum EUR 1.15 million per year.

In March 2023, the Institute for Energy Economics and Financial Analysis concluded that the "financing for the project is uncertain given its economic and environmental profile". "It is difficult to see who would finance a new coal project in Bosnia and Herzegovina under current conditions, with China and Russia likely to be excluded from the list of potential backers", the report stated.

Articles and Resources

Additional data

To access additional data, including an interactive map of coal-fired power stations, a downloadable dataset, and summary data, please visit the Global Coal Plant Tracker on the Global Energy Monitor website.