Flex›Source - Svk KMA2025 Kortsiktig Marknadsanalys

Source - Svk KMA2025 Kortsiktig Marknadsanalys

Svenska kraftnät’s short-term market analysis covering the period 2026–2030. Published 2025. The “KMA” series is Svk’s regular 5-year outlook on power system conditions in Sweden and the Nordic region.

Bibliographic details

  • Title: Aktuella tendenser i kraftsystemet — kortsiktig marknadsanalys 2025
  • Publisher: Svenska kraftnät
  • Horizon: 2026–2030
  • Raw file: raw/svk/aktuella-tendenser-i-kraftsystemet--kortsiktig-marknadsanalys-2025.pdf

Methodology

  • Models used: EMPS (for Nordic hydrology and power balance) and Samnett (for power flow and congestion analysis)
  • Weather scenarios: 35 historical weather years (1982–2016) to capture hydrological and meteorological variability
  • Capacity calculation: incorporates Flow-Based Capacity Calculation introduced in the Nordic market in October 2024; cross-border capacity allocation now uses physical flow-based method (replacing NTC)
  • Demand assumptions: updated based on grid connection applications and revised industrial establishment timelines

Key findings

Demand revision downward

KMA2025 revises Swedish electricity demand downward compared to KMA2022 projections. The primary drivers:

  • Large industrial projects in northern Sweden (LKAB green steel, H2 Green Steel) have experienced delays and scaling adjustments — actual load connections are occurring more slowly than the bullish 2022 projections assumed
  • New data center demand has partially offset industrial delays but not fully replaced projected volumes
  • Net effect: Swedish demand growth in 2026–2030 is more modest than earlier models indicated

This is material context for grid investment planning — the case for accelerated north-south reinforcement is somewhat weakened in the near-term (2026–2030) relative to 2022 expectations, though the long-term case (post-2030) remains.

Sweden’s trade balance — near-neutral

Sweden is projected as a net exporter in 2026–2027, transitioning toward near-zero or slight net importer in 2028–2030 as new industrial loads come online before sufficient new production is commissioned.

The direction of Sweden’s trade balance has significant implications for bidding zone price levels and congestion revenue forecasts.

SE1 price convergence — gradient erosion

SE1 (northern Sweden) traditionally has the lowest electricity price of the four Swedish price zones, reflecting surplus hydro and wind production in the north with insufficient transmission south. KMA2025 shows:

  • SE1 prices converging toward SE2 in several modeled years, as new large industrial loads (particularly in Norrbotten for steel and hydrogen) increase consumption in SE1
  • The traditional north-south price gradient is expected to narrow, with SE1 no longer being the structural low-price outlier
  • This gradient erosion also reduces the value of north-bound interconnection capacity and changes the economics for new production siting in SE1

This finding is consistent with LMA2024’s observation that SE1 becomes the highest-price zone in high-demand long-term scenarios.

SE3–SE4 bottleneck remains dominant

The SE2–SE3 bottleneck (Snitt 2) and especially the SE3–SE4 bottleneck (Snitt 4) remain the dominant sources of congestion and congestion revenue across the 2026–2030 period.

  • SE4 (southern Sweden) often has higher prices than SE3 due to import needs
  • The SE3–SE4 border generates the largest and most consistent congestion revenues — the primary funding source for Svk’s investment plan
  • NordSyd investments are central to reducing this bottleneck

Flow-based capacity calculation — market effects

The transition to flow-based market coupling (FBMC) in October 2024 is reflected in KMA2025’s market modeling. Key effects:

  • FBMC allows more efficient use of existing transmission capacity across borders
  • However, in hours of high physical congestion, FBMC can generate higher price volatility than the previous NTC method — because physical constraints become binding more rapidly
  • Cross-border capacity becomes more variable, creating more uncertainty for BRPs and traders

Balancing market outlook

As renewable share grows over 2026–2030, Svk projects increasing need for:

  • aFRR volumes — doubling from current levels is expected as the Nordic ACE-based target replaces frequency deviation triggers
  • mFRR — continued growth in both up and down regulation requirements as VRE forecast errors increase
  • FFR and synthetic inertia — see also the Driftsäkerhet 2025 report; battery FFR participation continues to grow

The balancing market outlook chapter references Svk’s separately published Balancing Market Outlook 2030 for detailed volumes.

Relationship to other sources

Relevance to wiki

  • Bidding Areas — SE1 price convergence; SE3–SE4 bottleneck; north-south gradient erosion
  • NordSyd — congestion context supporting the investment case
  • Flow-Based Capacity Calculation — confirmed operational as of October 2024; KMA2025 is first analysis incorporating this change
  • Balancing Markets — near-term reserve volume projections; aFRR and mFRR growth
  • Svenska kraftnät — demand scenarios informing investment plan; congestion revenue projections

Data gaps

  • Specific quantified demand projections by sector and zone for 2026–2030
  • Detailed price scenario outputs by bidding zone