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Sweden Halts Denmark Power Cable Project Amid EU Grid Revenue Dispute
Key points
- Sweden paused the Konti-Skan Connect project with Denmark.
- Dispute centers on how Sweden can use electricity grid bottleneck revenues.
- Sweden wants flexibility for domestic power and consumer support.
- EU rules aim to tie revenues to grid investments and cross-border capacity.
Project Suspension Announced
The Swedish government announced on Friday the suspension of Konti-Skan Connect, a planned electricity interconnector with Denmark. This decision stems from new disagreements with the European Union regarding the allocation of congestion revenues, which are funds collected from electricity price differences and grid capacity limitations.
Confrontation with EU Rules
Energy Minister Ebba Busch stated that Sweden is taking action by removing the project from Svenska kraftnät’s investment plan. The Konti-Skan Connect project was intended to replace two aging cables connecting southwestern Sweden and Jutland, renewing the electricity link between the two countries. This move escalates Sweden's ongoing disagreement with the EU over electricity market regulations.
The Core of the Dispute: Bottleneck Revenues
The central issue is the control over bottleneck revenues, also known as congestion income. These revenues are significant in Sweden due to substantial electricity price disparities between the power-producing north and the high-demand, grid-constrained south. Svenska kraftnät's bottleneck account held approximately SEK 85 billion (€7.3 billion) at the end of last year, with an additional SEK 130 billion (€11.2 billion) projected over the next decade.
Sweden's Stance on Fund Usage
Sweden desires greater flexibility in utilizing these funds, not only for grid expansion but also for electricity support during crises and investments in domestic power generation, including hydropower, nuclear power, and renewables. This contrasts with Brussels' push for rules that more closely link congestion income to grid investments and cross-border capacity, which Stockholm argues would restrict its ability to protect consumers.
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Reporting from
Sweden has paused the Konti-Skan Connect electricity interconnector project with Denmark due to an ongoing dispute with the European Union over the use of revenues generated from power grid bottlenecks. The Swedish government seeks more flexibility to use these funds for domestic power production and consumer support, while the EU advocates for tying them to grid investments and cross-border capacity.