Stockholm has warned it could restrict electricity flows to neighbouring countries if the European Commission presses ahead with a proposal requiring grid operators to ring-fence part of their congestion income for EU-backed cross-border infrastructure projects.
Sweden has threatened to restrict electricity exports to neighbouring countries if disagreements with the European Commission over the use of grid revenues are not resolved, in a dispute that has opened a new front in the EU’s effort to finance cross-border energy infrastructure. Deputy Prime Minister and Energy Minister Ebba Busch said Stockholm was prepared to consider “drastic measures”, including limiting flows on Sweden’s existing power interconnectors.
The warning matters because Sweden is a significant electricity exporter in northern Europe. The country sends surplus power from nuclear, hydropower and renewable generation through interconnectors to countries including Germany, Denmark and Finland. Any curbs on those flows would therefore have effects beyond Sweden’s domestic market and could quickly become a wider regional issue.
At the centre of the dispute is a Commission proposal that would require transmission system operators to set aside 25 per cent of certain congestion rents for projects on the Union list aimed at reducing interconnector congestion. In the Commission’s December 2025 proposal for the European Grids Package, Article 19 states that TSOs “shall set aside 25 % of the congestion rents” not already spent on guaranteeing allocated capacity, and that the funds should be used for projects on the Union list relevant to reducing interconnector congestion. The explanatory text says the purpose is to facilitate the financing of projects of common interest and bring more predictability and transparency to cross-border cost allocation.
Reuters described Sweden’s objection in practical terms: national network operators can currently use this money for their own infrastructure, whereas the Commission’s proposal would redirect part of it towards EU-backed cross-border schemes. For Stockholm, that is a sensitive issue because the country’s generation and demand are unevenly distributed, with abundant hydropower in the north and tighter supply in the south. Sweden’s grid operator collected 30.5 billion Swedish kronor in congestion revenues in 2025.
The clash therefore reflects a broader Brussels-versus-capitals tension over who controls the proceeds generated by bottlenecks in national electricity systems. Busch said Sweden had already warned affected countries before raising the issue at a meeting of EU energy ministers in Brussels on 16 March. She added that restricting interconnector flows was one of the measures that had been discussed and that such a move would have support in Sweden.
For the Commission, however, the underlying logic is that cross-border congestion cannot be solved only through national spending choices. The Grids Package proposal says stronger EU-level planning and financing tools are needed to speed up the deployment of interconnectors and other strategic infrastructure, and specifically links the measure to the wider objective of completing the Energy Union and improving affordability, resilience and market integration. The proposal also notes that additional investment in cross-border infrastructure is necessary for competitiveness and decarbonisation.
There are signs that Brussels may still be looking for a compromise. Energy Commissioner Dan Jorgensen told ministers the Commission would work with governments to address concerns about “the national control of this money”. A leaked negotiating document suggested governments were considering a narrower approach under which countries would keep congestion revenues collected within their borders, while only revenues linked to cross-border power trading would be earmarked for EU projects.
That distinction could prove decisive. If negotiations move in that direction, the dispute may shift from a direct challenge to national control of grid income to a more limited argument over how cross-border revenues should be shared. Even so, Sweden’s threat has already underlined how politically sensitive electricity-market reform remains inside the EU, particularly when proposals designed to deepen integration collide with national investment priorities and domestic price pressures.
For Brussels policy watchers, the episode is significant not only because of the sums involved but because it tests the balance between national sovereignty and Energy Union logic. The Commission is trying to mobilise more funding for projects that benefit the bloc as a whole; Sweden is arguing that revenue generated by its own grid constraints should not be diverted at a time when it still faces major domestic network needs. Whether this becomes a negotiated technical adjustment or a wider political row will depend on the next stage of talks between the Commission and member states.
