Sweden threatens to restrict power exports over EU funding plan

Sweden has threatened to restrict electricity exports to neighbouring countries if disagreements with the European Commission over the use of national funds for EU energy projects are not resolved, Deputy Prime Minister Ebba Busch said on Monday.

The move could ripple through Northern Europe's electricity market. Sweden exports excess power from its fleet of nuclear, hydropower and renewable energy generators via cables to countries including Germany, Denmark and Finland.

“If it comes down to this, then we will take drastic measures,” Busch, who is also Sweden's energy minister, said in an interview.

Asked if Sweden was considering restricting flows on its existing power interconnectors with other countries, Busch said: "That is one of the measures that we have been discussing, and that would have support in Sweden."

The warning comes in opposition to an EU proposal to earmark 25% of congestion revenues collected by national power grid operators be allocated to EU-backed cross-border energy infrastructure projects.

Congestion revenues arise when grid constraints prevent electricity from flowing to high-demand areas, resulting in substantial earnings for network operators.

National network operators can now spend this money on their own infrastructure.

Sweden has abundant hydropower in the north, but tighter electricity supplies in the south - a dynamic which generates substantial congestion revenues as power attempts to flow across the country. Sweden's power grid operator collected 30.5 billion Swedish kronor ($3.26 billion) in congestion revenues in 2025.

Busch said Sweden had forewarned the affected countries before raising the issue at a meeting of EU ministers in Brussels on Monday.

During that meeting, EU Energy Commissioner Dan Jorgensen said Brussels would work with governments negotiating the EU proposals to address concerns around "the national control of this money", without specifying further.

A leaked EU negotiating document, seen by Reuters, showed governments are considering letting countries keep congestion revenues collected inside their borders, and only earmark for EU projects the revenues they collect from cross-country power trading.

($1 = 9.3459 Swedish crowns)

-Alexander Chituc and Kate Abnett/Reuters