The Swedish electricity market was partitioned into four bidding zones in 2011. The purpose was to facilitate congestion management necessitated by transmission capacity constraints in the north-south direction. Increasing the wholesale price of electricity in southern Sweden and reducing the price in the north, achieves a better balance between demand and supply within each zone. Previously, Sweden consisted of one single bidding zone with a unified wholesale price of electricity across the country.
Excess demand in southern Sweden was handled by curtailing exports to Denmark on a regular basis. This behavior was regarded as problematic by the EU and a possible violation of the EU competition law. The zonal reform was criticized particularly in southern Sweden where consumers deemed it unfair that they should pay more for their electricity than consumers elsewhere in Sweden. The report is available in Swedish.
