Sweden drops EU grid objection after ministers back congestion income compromise
EU energy ministers agreed a draft negotiating position on Friday that resolves Sweden's dispute over how member states can deploy cross-border power revenues.
EU energy ministers agreed a draft negotiating position on Friday (2026-06-26) that addresses Sweden's objections to the European Commission's proposed grid rules, ending a standoff that had briefly halted Nordic interconnector projects, Montel reported. Swedish Energy Minister Ebba Busch welcomed the outcome.7
The dispute centred on congestion income — the revenues generated when power prices differ across adjacent bidding zones, a direct consequence of grid bottlenecks. Sweden had objected to Commission proposals that would have required member states to channel those funds toward cross-border grid investments, arguing the rules would constrain flexibility to spend on domestic capacity and energy storage.2
That disagreement became an operational problem in May. Busch paused all of Sweden's interconnector projects to other EU member states during the week of 2026-05-11, including a planned 1 GW link, using the moratorium as direct leverage in the negotiations.2
Brussels signalled a willingness to compromise before the ministerial meeting. EU energy commissioner Dan Jorgensen told a conference on Thursday (2026-06-04) that some of Sweden's concerns were "quite legitimate" and that he was confident a resolution would be found.5
The draft position seen by POLITICO includes a specific concession: the requirement for member states to direct congestion income toward cross-border grid investments would lapse after eight years. That time limit gives governments more discretion over those revenues as the energy transition advances and the rules bed in.6
The compromise carries weight beyond the Sweden-Brussels bilateral. European transmission operators face investment requirements of a scale that have few precedents. ENTSO-E estimates meeting the EU's electrification goals by 2050 will require roughly €800bn in grid spending. TenneT, which operates networks in both the Netherlands and Germany, has outlined plans to spend €200bn by 2034 alone. France's RTE is targeting €100bn between 2025 and 2040. Italy's Terna is investing €18bn in 2024-28.4
Against that backdrop, Entso-E's board chairman had warned in May that the congestion income debate was consuming political attention at the expense of more consequential elements of the grids package, including permitting reform and financing frameworks for new transmission lines. Political bandwidth spent on revenue allocation rules is bandwidth not spent on connection queues. Germany already has more than 500 GW of battery projects awaiting grid connections.1,4
The eight-year lapse provision is a concession to member states seeking spending flexibility, but it delays rather than settles the underlying allocation question. As renewable capacity grows, congestion income tends to shrink when variable generation flattens cross-border spreads — but can spike during periods when fossil-fuel plant sets the marginal price across multiple zones. Gas-fired plant set the clearing price in 89% of European hours so far in 2026, according to Ember, keeping congestion income material for TSOs managing price divergences across the bloc.3
EU Parliament negotiations on the full grids package will determine whether the eight-year provision survives. Member states' negotiating position is a starting point, not a final text.
Sweden's next move on the paused 1 GW interconnector project will serve as the practical test of whether the draft text has satisfied Stockholm's core demands. If Busch lifts the moratorium, the compromise holds.2