Sweden has suspended plans for a new electricity cable linking it to Denmark after a dispute with the European Commission over the use of power-grid revenues, Energy Minister Ebba Busch said on Friday.
The proposed Konti-Skan Connect project, intended to replace two ageing power cables between southwestern Sweden and Denmark, has now been put on hold as Stockholm pushes back against Brussels’ funding rules.
Sweden argues that revenues earned from electricity congestion charges should be used to finance new electricity production, including nuclear power expansion, rather than being restricted to grid investments alone.
Busch described the Commission’s proposal as “unacceptable” and said Sweden was moving “from words to action” by pausing new power cable investments to continental Europe.
The disagreement follows earlier warnings from Sweden this year that it could limit electricity exports to neighbouring countries unless the funding dispute with the EU was resolved.
Sweden exports surplus electricity generated from its nuclear, hydropower and renewable energy fleet to countries including Denmark, Finland and Germany through cross-border interconnectors.
The country expects to collect around 130 billion Swedish crowns ($14.11 billion) in congestion charge revenues over the next decade from those electricity flows.
Congestion revenues are generated when grid bottlenecks prevent electricity from moving freely to areas with higher demand, creating additional income for transmission system operators.
The centre-right Swedish government is simultaneously seeking financing for four large-scale nuclear reactors, or equivalent small modular reactors, with total planned capacity of about 5,000 megawatts.
Sweden aims to bring at least half of the planned nuclear capacity online by 2035 as it seeks to strengthen long-term energy security and electricity supply.