NC DR Implementation in Sweden — What Changes and for Whom

The Network Code on Demand Response is not a single policy event but a rolling implementation of roughly a dozen interlocking obligations, each affecting a different actor. Some parts are already in force. Most are not. This synthesis maps what each actor faces, in what order, and why it matters.

What is already in force

Part of the NC DR framework entered force before the main regulation was adopted:

ACER Decision 05-2025 (FNAM) — published 25 July 2025 — established the Flexibility Needs Assessment Methodology. This is secondary EU legislation, directly applicable in all Member States, not requiring national transposition. Sweden’s first Flexibility Need Assessment under it — Svk’s final report — was published 29 June 2026 and approved by Ei in July 2026 (Source - Ei R2026-07 Vägledande Mål Icke-fossil Flexibilitet (2026)). Headline results: system-level RES spill rises to ~5.2 TWh by 2035 (structural, not extreme-event-driven); zero unmet RES-integration need under Sweden’s base-case ambition; distribution-level RES-linked down-regulation share rises from 52% (2030) to 71% (2035). See Flexibility Need Assessment › FNA 2026 results (Svk final report, 29 June 2026) for full detail. The FNAM is the leading edge of NC DR implementation. (Source - Svk FNA 2026 Slutrapport (2026))

The Överenskommelse — the tripartite agreement between Svenska kraftnät, Ei, and DSO representatives (signed November 2025) is Sweden’s national implementation scaffold for FNA 2026. It pre-operationalizes the FNAM requirements into concrete reporting obligations before the main NC DR regulation exists.

Everything else — the FIS, local services markets, grid prequalification, DNDP local services requirements, TSO-DSO coordination framework — waits for the main regulation’s Commission adoption, now expected Q4 2026–Q1 2027 (per ENTSO-E’s June 2026 Balancing Report, superseding earlier “summer/within 2026” estimates), and then national implementation across seven T&C domains, in which the system operators jointly propose and Ei approves. (Source - ENTSO-E Balancing Report 2026)

The implementation architecture

The NC DR does not self-execute. It requires national terms and conditions (T&C) in approximately seven domains — jointly proposed by the system operators (Svk and the DSOs) under national rules of procedure that Ei designs and approves, with Ei approving each T&C after public consultation (Source - Ei NC DR Förberedelser (2025), Source - NC DR Amended Text (ACER Recommendation 01-2025 Annex 1)):

1. Service provider qualification
2. Baseline methodologies
3. Flexibility Information System (FIS)
4. TSO-DSO coordination framework
5. Local services procurement rules
6. Distribution Network Development Plan content and process
7. Energy storage treatment

Most of the amended text’s deadlines run from approval of the national rules of procedure (T&C proposals, bracketed at 6–18 months) or from T&C approval (transition periods), not from entry into force alone; the exception is the 4-year FIS interoperability long-stop. This means the clock restarts with each T&C domain. The effective implementation timeline is therefore:

NC DR Commission adoption (est. Q4 2026–Q1 2027)
    ↓
National rules of procedure (12 months after entry into force; Ei)
    ↓
Svk + DSOs jointly propose T&C (6–18 months per domain); Ei approves
    ↓
T&C approved → domain-specific clocks start
    ↓
FIS T&C approved → 2 years to update/replace existing platforms (SWITCH, NODES)
Entry into force → 4 years at the latest to full FIS interoperability
    ↓
DSO observability areas → 6 months after approval of the TSO-DSO coordination T&C

Sweden’s likely runway from entry into force to full FIS compliance is roughly 5–6 years (wiki estimate summing the bracketed periods plus approval time; the periods are placeholders in square brackets in ACER’s text). (Source - NC DR Amended Text (ACER Recommendation 01-2025 Annex 1))

Where the Swedish FIS is proposed to live

The government’s September 2025 assignment named the NC DR FIS requirement as context for a central data management tool, and on 30 September 2026 Ei and Svenska kraftnät submitted their report (Ei R2026:08). It proposes a flexibilitetsinformationssystem (FIS) as part of, or closely tied to, the central tool (DHV), with Svk responsible for development, operation and management through a wholly owned subsidiary; the government has not decided. The points that matter for NC DR implementation (Source - Ei R2026-08 Förslag Centralt Datahanteringsverktyg (2026), synthesis in Centralt Datahanteringsverktyg):

• What the FIS would do: a central register of flexibility resources and agreements; receiving resource meter values; grouping of resources; coordination around qualification; availability checks ahead of bidding and activation; status information on resources and bid groups; information on grid constraints and on bids in other flexibility markets; reference-profile calculation and verification of delivered flexibility. Prequalification stays directly with the procuring party, bids are placed outside the system, and payment between provider and procuring party is outside it. Verified volumes feed payment, imbalance adjustment for the BRPs concerned, and compensation basis for suppliers where needed.
• Sequence: the DHV must come before the FIS, because the FIS needs the DHV’s stable structure data, identities and interfaces; the two should be developed jointly. The report’s indicative schedule is in months from an undated start: first go-live 36–42 months if the old Elmarknadshubb work is reused, 90–96 months if built from scratch. Without reuse the report sees a greater risk of a time gap between the NC DR requirements and the DHV being able to deliver what the FIS needs, and describes a strictly time-limited interim FIS solution only as a second-best fallback.
• Interplay with the 4-year long-stop (wiki arithmetic, not from the report): if the Commission adopts in Q4 2026–Q1 2027 the long-stop for full FIS interoperability falls around 2031; a 2027 start for the DHV with reuse would put DHV go-live around 2030–2031 and the FIS after it, which is tight, while a from-scratch build (around 2034–2035) would miss it.
• Rules the FIS depends on: the report says the FIS needs national procedure rules, provider conditions, reference-profile methodology and functional requirements concretised before development and fully fixed before go-live, while the DHV can be built without the flexibility rules being final. No national definition of flexibilitetsleverantör is proposed, because the NC DR is not adopted; the term corresponds mainly to the NC DR proposal’s “service provider”.
• Who pays: flexibility providers through a fee on active flexibility resources (registered, prequalified and available on one or more markets); grid companies for functions used by local flexibility markets, but not for resources qualified only for Svk’s balancing markets; Svk as transmission system operator is not charged. The report leaves the FIS fee basis to the implementation phase. Ei would decide the maximum allowed revenue for the tool and how fees are split.

Actor-by-actor map

Ei — Energimarknadsinspektionen

Ei faces the largest regulatory production workload. As Sweden’s NRA under the NC DR, Ei must:

• Approve derogations from market-based procurement (max 2 years per derogation, renewable; must specify which system segments, voltage levels, time periods, and products are covered; the two-year cap does not apply to voltage control with reactive power). This means the current informal tolerance for Villkorade Avtal as the dominant congestion management tool becomes formally time-limited.
• Approve national T&C across all seven domains — the system operators consult stakeholders on their proposals (Art. 6, at least one month, bracketed), and Ei takes the formal approval decision on each; Ei (as the designated entity, unless Sweden decides otherwise) also sets the national rules of procedure (Art. 4).
• Oversee the FIS: if a third party operates it, Ei must verify business separation; Ei receives annual reports on non-approved and conditionally approved grid prequalifications. Under the 30 September 2026 proposal the FIS would sit in the central tool run by a Svk subsidiary, and Ei would issue föreskrifter on the tool’s functions, decide its maximum allowed revenue and the fee split, and supervise (Source - Ei R2026-08 Förslag Centralt Datahanteringsverktyg (2026)).
• Supervise DNDPs: require amendments if mandatory local services content is missing; ensure 6-week consultation standard is met.
• Approve or contest the FNA: Ei is the supervisory authority — if Svk and DSOs cannot agree, Ei decides.
• Approve alternative grid prequalification timelines (for voltage-level thresholds), alternative derogations for voltage control with reactive power, and any national derogation from product harmonization.

From Sweco’s 2025 analysis, four specific areas where Ei’s clarifications are most urgently needed (Source - Sweco Kartläggning av lokala flexibilitetsmarknader (Ei, 2025)):

1. Define redispatching and when each flexibility tool is permitted (traffic light model)
2. Clarify what “socioeconomic efficiency” means when comparing flex vs grid investment
3. Establish methodology for responsibility and cost allocation across grid levels
4. Clarify how “system operator” (NC DR concept) applies in Sweden’s multi-level DSO structure

Ei has already moved proactively through ställningstaganden (Ei2025:01 on Villkorade Avtal) and is developing TOTEX-based CAPEX reform for RP5 (2028). But the NC DR multiplies its regulatory agenda substantially.

Swedish DSOs (elnätsföretag)

DSOs face changes in four areas:

1. Flexibility Information System (FIS) The FIS will replace or absorb the current fragmented registration approaches. The register-once principle means DSOs can no longer maintain proprietary, incompatible resource registries. Existing platforms (SWITCH, NODES) may continue as transitional IT solutions, but must be updated or replaced within 2 years of FIS T&C approval. Vendor lock-in is explicitly prohibited — all data must be exportable in structured, machine-readable format. Under the Ei/Svk proposal of 30 September 2026 the grid company would report temporary grid constraints in the FIS, be relieved of building its own parallel systems for qualification coordination, reference-profile calculation, activation validation, meter values and the availability register (the report itself describes central handling of prequalification in one place and direct prequalification against the procuring party in another), and pay part of the FIS cost for the functions its local flexibility market uses (not for resources qualified only for Svk’s balancing markets). The FIS would follow the DHV, so the platform-replacement clock depends on when the DHV is ready (Source - Ei R2026-08 Förslag Centralt Datahanteringsverktyg (2026)).

2. Distribution Network Development Plans (DNDPs) Every DSO with relevant local services will be required to include a quantified local services assessment in its DNDP: forecasted needs, cost-effectiveness methodology, and medium/long-term estimates with locational granularity. Swedish DSOs already have to publish a nätutvecklingsplan; the local-services content and its locational granularity are the new part. The ACER-CEER guidance ties DNDP flexibility quantification to the FNAM’s Tabell 15 format, which in the wiki’s reading makes the DNDP a data pipeline into the FNA, not just a disclosure. (Source - ACER CEER DNDP Guidance (2025))

3. Market-based procurement obligation + derogation The NC DR formalizes market-based procurement as the default. DSOs that currently rely heavily on villkorade avtal must apply for Ei derogations — maximum 2-year terms, renewable. Each derogation must specify scope. This creates an annual compliance pressure and documents the transition trajectory. Before granting or extending a derogation, Art. 29(3) has Ei request an assessment of market-based procurement in at least three cases: the reasons for non-market procurement no longer apply, pilots have demonstrated market efficiency, or market-based procurement is inefficient (Source - NC DR Amended Text (ACER Recommendation 01-2025 Annex 1)).

4. Grid prequalification and observability areas DSOs must define observability areas within 6 months of approval of the TSO-DSO coordination T&C and establish formal grid prequalification procedures with three defined outcomes (approved / conditionally approved / not approved). The default-to-approval rule (silence = approval) limits DSO discretion to block market participation. Annual reporting to Ei on non-approved and conditional cases creates transparency about where DSOs are constraining market access.

Who is most affected: DSOs running active local flexibility markets (E.ON; Göteborg Energi Elnät with Mölndal Energi Elnät; Kinnekulle Energi, as of Sweco’s April 2025 survey) are the most exposed on FIS, since their platforms are the ones that must be updated or replaced (Source - Sweco Kartläggning av lokala flexibilitetsmarknader (Ei, 2025)). Smaller DSOs may have no local services market yet, but Sweco notes the NC DR gives all ~190 network companies equal system-operator obligations.

Svenska kraftnät (TSO)

Svenska kraftnät faces NC DR implementation in two roles — as TSO and as FNA Designated Entity:

As TSO:

• Formalize the observability area framework with Swedish DSOs (currently informal via the subscription mechanism and SO GL Art. 182 discussions)
• Establish the grid prequalification coordination mechanism — the NC DR requires connecting and impacted SOs to coordinate grid prequalification results; Svk must build this into its processes for distribution-connected resources affecting transmission
• Implement trade position consistency (Art. 51) and imbalance adjustments: the activating system operator must keep trade positions consistent when local services or flexible connection agreements are activated between day-ahead and intraday cross-zonal gate closure, and where a flexible connection agreement is activated after day-ahead gate closure the TSO calculates an imbalance adjustment for the affected balance responsible parties (Art. 31(2)(b)) — both require coordinated procedures and data exchange not currently formalized
• Conclude the SO GL Art. 182 TSO-DSO cooperation agreement (drafted by Svk and Energiföretagen, announced 24 June 2026; in public remiss 30 September–26 October 2026, webinar 7 October; in force spring 2027 as planned; deferred from FNA 2026). The draft covers FCR, aFRR and mFRR units or groups of at least 0.5 MW per grid area; the grid company decides grid prequalification within 4 working weeks (a missed deadline counts as approval) and may set temporary limits of up to two days, notified by 14:00 on D-2 (Source - Svk Energiföretagen SO GL Art 182 Avtal (2026))
• Provide and manage the national FIS as part of the proposed central data management tool, through a wholly owned subsidiary, if the government accepts the 30 September 2026 proposal; the draft law text has the holder of the transmission system provide and manage the tool including the FIS (Source - Ei R2026-08 Förslag Centralt Datahanteringsverktyg (2026))

As FNA Designated Entity: produce and submit the national FNA every two years. FNA 2026 is complete; FNA 2028 will be substantially more complex (energy data, transmission-level needs, guiding criteria, grid prequalification data, villkorade avtal/market split).

Key deferred item: Svk explicitly agreed not to report transmission-level flexibility needs in FNA 2026 due to methodology immaturity. FNA 2028 will need transmission needs included — requiring Svk to develop a methodology it does not currently have.

Aggregators and service providers

Aggregators and other service providers get new rights under NC DR:

• CU switching within supplier-switching timeframes — reduces switching friction between aggregators; SOs cannot use slow processes to trap customers
• Temporary qualification from application confirmation — aggregators can begin market participation before qualification formally completes
• Small CU simplification (≤50 kW) — simplified qualification and exemption from near real-time data requirements; lowers the cost of aggregating household-scale resources
• Market participation rights for flexible CA holders (Art. 31 §3) — a customer with a villkorat avtal retains full rights to bid into SWITCH or other markets alongside the CA; DSOs cannot limit them, other than through grid prequalification or temporary limits
• Table of Equivalences — one qualification, multiple revenue streams; if a resource qualifies for one product it may be automatically recognized for equivalent products, enabling value stacking across balancing and local markets
• One registration in the FIS (if the Swedish proposal is adopted) — resources are registered once and used across markets, at a cost of a fee per active flexibility resource; the report’s model also “creates conditions” for a flexibility provider to act without holding balance responsibility for the metering point, with prequalification and bidding still done directly with the procuring party (Source - Ei R2026-08 Förslag Centralt Datahanteringsverktyg (2026))

The business case for aggregating small DERs (EVs, heat pumps, batteries) improves with these rights — but the business case only materializes if local markets are liquid, and Swedish markets have thin demand (see Why Swedish Local Flex Markets Are Thin — Structural Causes).

Customers with villkorade avtal

Customers currently holding Villkorade Avtal are affected in two ways:

1. NC DR Art. 31 §3 protects their market rights: a customer that signed a villkorat avtal cannot be barred from also bidding into a local flexibility market. The two roles are separate. This is a strengthening of their position.
2. Art. 31 §2 formalizes the activation coordination: where a flexible CA specifies an activation time after day-ahead gate closure and is activated then, the TSO must calculate an imbalance adjustment for the affected balance responsible parties. In the wiki’s reading this creates a formal settlement mechanism for what is currently ad hoc.

Monitoring and data exchange ahead of the code (October 2026)

While the Commission’s NC DR text was still pending (the European Commission’s update at the stakeholder group’s third meeting on 6 October 2026 was oral), ACER was monitoring national practice on aggregation models and baselining, with congestion-management procurement next, and the ENTSO-E and EU DSO Entity joint working group presented a reference model for demand-response data exchange under Art. 24 of Directive 2019/944, against which member states would map their own models. These are the likely reference points when Ei and Svenska kraftnät draft the national terms and conditions (Source - DRESG 3rd Meeting (2026-10-06)).

What NC DR does not change

• Ei2025:01 positions remain valid — the ställningstagande positions on villkorade avtal (DSO with physical constraint bears obligation; Ei must approve methods before signing; activation requires fresh per-dispatch assessment) are not superseded by the NC DR. They will coexist and likely inform Ei’s T&C development.
• Bidding Areas — the NC DR does not affect Sweden’s four price zones or the bidding zone review process.
• Balancing Markets — FCR, aFRR, mFRR structures are set by the SO GL and Nordic balancing arrangements, not by NC DR. NC DR improves access to these markets (qualification, data exchange) but does not redesign them.
• Revenue regulation — the CAPEX bias is addressed through Ei’s RP5 TOTEX reform, not through NC DR. The NC DR’s market-first principle reinforces the reform’s direction but the mechanism is separate.

The three items most likely to slip

Based on what is currently deferred in FNA 2026 and what is structurally underdeveloped:

1. SO GL Art. 182 TSO-DSO agreement — drafted by Svk and Energiföretagen (announced 24 June 2026), now in public remiss (30 September–26 October 2026) and expected in force in spring 2027, introduced stepwise; needed to formalize how Svk and DSOs manage simultaneous use of the same resources for local services and balancing. It is voluntary for grid companies and not retroactive, and no agreement is in force yet. This is the linchpin for TSO-DSO coordination under NC DR (Source - Svk Energiföretagen SO GL Art 182 Avtal (2026)).

2. National FIS and its T&C — developing an interoperable national FIS from SWITCH and NODES (two proprietary platforms with very different architectures) is technically complex. The 2-year transition after T&C approval means the T&C development itself is the bottleneck, and the FIS T&C itself cannot start before Commission adoption. The operator question now has a proposal, not an answer: Ei and Svk propose that Svk provide the FIS inside the central data management tool through a subsidiary, but the government has not decided, the FIS can only go live after the DHV, and the report’s own schedule runs from 36–42 months (with reuse of the old Elmarknadshubb work) to 90–96 months (from scratch) after a start that has no date. Ei is designing the T&C development process in parallel (Centralt Datahanteringsverktyg).

3. Villkorade avtal derogation management — the NC DR’s two-year derogation cap means each extension passes through Ei’s Art. 29(3) assessment request. In the wiki’s reading, for DSOs in areas where no market exists this creates a circular problem: the market doesn’t exist because the DSO relies on the derogation, and the derogation doesn’t incentivize market development. Resolving this loop requires Ei’s clarification of when the Art. 13(3) exceptions are satisfied.

Related pages

• Network Code on Demand Response — full regulation detail
• Flexibility Need Assessment — the already-live FNA process
• Distribution Network Development Plan — DNDP requirements under Arts. 43–44
• Villkorade Avtal — impact of Art. 31 on Sweden’s predominant flexibility tool
• Ei — regulatory authority and T&C development
• Flexibility Market — market-based procurement rules
• TSO-DSO Coordination — The Central Design Problem — deeper analysis of the coordination architecture
• Centralt Datahanteringsverktyg — the proposed home of the Swedish FIS: architecture, governance, financing and schedule
• The Regulatory Architecture for Swedish Flexibility 2026–2028 — DHV/FIS on the critical path of the five-instrument system