Montel Magazine 4 2021 - Nordic power spat - Page 14

Sweden sparks cross-border rift

The Swedish power grid operator ’ s decision to curb exports to its Nordic neighbours to secure sufficient domestic supply has ignited a row in the region otherwise known for harmonious relations .
By Olav Vilnes
Because Sweden is located in the middle of the region , Svenska Kraftnat plays a pivotal role in utilising the bloc ’ s power resources -- from hydro to nuclear to wind -- to keep supply aligned with demand in the most cost-efficient way . But recently , the state-owned Swedish company has come under increased criticism for failing to do this job . For instance , the gap between electricity prices in northern and southern Sweden swelled to an historically wide EUR 68.56 / MWh on average in November . This has infuriated industrial consumers in the south who are paying the hefty premium to their rivals further north .
Sweden ’ s Nordic neighbours have also sounded the alarm bell and lashed out at Svenska Kraftnat for curbing cross-border capacity to maintain security of supply at home , therefore , according to them , exacerbating historically wide price differences across the region ’ s 12 bidding zones . Indeed , the Swedish TSO has strongly reduced import capacity from Finland and export capacity to southern Norway and Denmark , in a move to stabilise its domestic grid .
But the situation began to resemble a trade war when Norway ’ s TSO responded by halving electricity flows from southern Norway to Sweden , indefinitely , in a tit for tat against the Swedish TSO ’ s restrictions . “ Transparency , reciprocity and common understanding are ground pillars of the Nordic power system . We now experience a need to conduct a more similar practice on how we conduct operations ,” CEO Hilde Tonne of Statnett , Norway ’ s TSO , said in a statement in November .
The spat has surprised many in the industry . “ I am speechless [ about ] what ’ s happening in the Nordic power market ,” says market analyst Magnus Thorstensson at Swedenergy , a lobby group for Swedish power companies . “ We have seen conflicts of interest between authorities and TSOs . But now we have reached an entirely new level ,”
16 Montel Magazine 4 – 2021