Finance
Sweden threatens to restrict power exports over EU funding plan
Published by Global Banking & Finance Review®
Posted on March 16, 2026
3 min readLast updated: March 16, 2026
Quick Summary
Sweden may restrict electricity exports if the EU enforces its plan to redirect 25% of congestion revenues to cross‑border energy projects, a move that Stockholm warns could destabilize its power market worth over SEK 30.5 billion in 2025.
Sweden Could Restrict Power Exports Amid EU Energy Funding Dispute
By Alexander Chituc and Kate Abnett
Sweden's Stance on EU Energy Funding and Potential Export Restrictions
BRUSSELS, March 16 (Reuters) - 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.
Impact on Northern Europe's Electricity Market
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.
Statements from Swedish Officials
“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."
EU Proposal and Swedish Opposition
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.
Understanding Congestion Revenues
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's Power Grid and Revenue Generation
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.
Negotiations and International Reactions
Busch said Sweden had forewarned the affected countries before raising the issue at a meeting of EU ministers in Brussels on Monday.
EU Commissioner Response
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.
Leaked EU Document and Possible Compromises
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)
(Reporting by Kate Abnett, Alexander Chituc; additional reporting by Simon Johnson, edititng by Andrei Khalip)
Key Takeaways
- •Sweden generated SEK 30.5 billion (approx. $3.26 billion) in congestion revenues in 2025, largely due to internal grid bottlenecks between its hydropower‑rich north and demand‑heavy south (swedenherald.com).
- •The EU proposal would require member states to allocate 25% of congestion revenues to EU‑backed cross‑border energy infrastructure, prompting Sweden to threaten power export restrictions if national control over revenues is eroded (nordictimes.com).
- •A leaked EU negotiating document suggests a compromise: countries may keep congestion revenues from internal flows and only dedicate revenues from cross‑border flows to EU projects, pending further negotiation (nordictimes.com).
References
Frequently Asked Questions about Sweden threatens to restrict power exports over EU funding plan
1Why is Sweden threatening to restrict electricity exports?
Sweden is considering restricting exports due to disagreements with the EU over using national funds for EU-backed cross-border energy projects.
2Which countries import electricity from Sweden?
Sweden exports electricity to neighboring countries including Germany, Denmark, and Finland.
3What are congestion revenues in the electricity market?
Congestion revenues are earnings for grid operators when grid constraints prevent electricity from reaching high-demand areas.
4How much did Sweden's power grid operator collect in congestion revenues?
Sweden's power grid operator collected 30.5 billion Swedish kronor ($3.26 billion) in congestion revenues in 2025.
5What EU proposal is Sweden opposing?
The EU proposal would allocate 25% of congestion revenues to EU-backed cross-border energy infrastructure projects, which Sweden opposes.
