Swedish Flexibility Market Landscape

A case study of Swedish local flexibility markets — their history, current operational status, supply-side dynamics, and near-term pipeline. For the concept definition, EU regulatory framework, and international comparison, see Flexibility Market.

Nordic comparison

As of the Nordic Energy Research 2025-03 study, Sweden was the only Nordic country with commercialized (permanent) demand-side flexibility solutions. Norway had the most initiatives (20) but none had reached commercial maturity; Denmark had 4 initiatives (all pilots or demos), Finland 7 (1 commercial: DSO Elenia’s smart meter relay service). (Source - Nordic Energy Research 2025-03 Current Utilisation of Flexibility in the Nordics)

The table below is the 2025-03 snapshot:

Update (2026) — Norway now has an operating local flex market. The “Norway 0 permanent” figure is a pre-Euroflex snapshot. Norway’s Euroflex (on NODES) ran its first trading season in winter 2024/25 and, in V2025/26, has 8 nettselskap (DSOs) and ~20 active flexibility providers, with December 2025 traded volume roughly 7× December 2024 and contracts lengthening from 1–2 weeks to 1–3 months. It uses the same LongFlex/ShortFlex/MaxUsage products as Effekthandel Väst plus a new Armering overlay for DSO+TSO value stacking. So Sweden is no longer the only Nordic country with a commercial LFM — though it retains the longest track record and the most markets. (Source - Euroflex Norwegian LFM (NODES, 2026))

Sweden’s lead reflects: (1) early mover advantage from CoordiNet (2019); (2) E.ON’s transition of flex markets from project to line operation (2022); (3) Effekthandel Väst reaching permanent status from 2022; (4) Ei’s standardization of LFM products (December 2025).

Market inventory

Seven markets have existed in Sweden. As of 2025: three active, four closed. (Source - Sweco Kartläggning av lokala flexibilitetsmarknader (Ei, 2025))

All trades flow through one of two platforms: SWITCH (E.ON-owned) or NODES (NODES AS, independent Norwegian company). The two platforms have independently evolved similar product designs, creating a de facto Swedish market standard.

Market closure dynamics: Markets close when (a) the project was time-limited, or (b) the capacity constraint was resolved. The 400 kV Söderåsen–Barsebäck line connected in October 2024 (+600 MW) made CoordiNet’s Skåne markets “much less necessary or even unnecessary.” sthlmflex closed when warm winters, high energy prices, and TSO subscription grants combined to eliminate sufficient congestion need.

DSO stances

Vattenfall — formal withdrawal: Vattenfall Eldistribution‘s DNDP confirms closure of both UppFlex and sthlmflex, concluding that required market liquidity (≥5 independent actors, supply ≥5× demand) cannot be achieved in its network. Vattenfall is the first major Swedish DSO to formally withdraw from flex market participation entirely. See Vattenfall vs E.ON — DSO Approaches to Flexibility for comparative analysis. (Source - Vattenfall Eldistribution Nätutvecklingsplan 2025-2034)

Ellevio — intermediate stance: Ellevio‘s DNDP states that market-based flexibility solutions currently don’t exist in any of its 17 areas, but unlike Vattenfall, Ellevio acknowledges markets may develop as the ecosystem matures. (Source - Ellevio Nätutvecklingsplan 2025-2034)

Critical calibration: No Swedish local flexibility market has yet managed an acute capacity shortage as its primary sharp tool. Markets have demonstrated load-shifting is possible, reduced subscription violations, and built operational capability — but Villkorade Avtal remain the tool that provides operational certainty.

Phase 1 — First-generation pilots (2019–2022)

Three concurrent pilot projects: CoordiNet (four DSO areas), sthlmflex (seasons 1–2, Stockholm region), and Effekthandel Väst (from V2021/22, Gothenburg). All were R&D projects; none was designed to operate as permanent infrastructure. The first market demonstration winter was V2020/21. E.ON has operated flex markets continuously since, making V2025/26 the sixth consecutive winter season of Swedish LFM operation.

CoordiNet outcomes (Source - CoordiNet D4.7.2 Swedish Demonstration (2022)):

sthlmflex seasons 1–2: S1 (2020/21): 2,276 MWh activated, avg 485 kr/MWh; S2 (2021/22): 878 MWh activated, avg 883 kr/MWh, LongFlex 7,381 MWh pre-procured.

Key findings from the pilot generation:

The two-equilibrium problem: market outcomes depend more on TSO subscription policy than market design. When Svk denies subscription raises, DSOs buy routinely at low prices and high volume (Uppland). When Svk grants temporary subscriptions at ~244 kr/MWh, DSOs only buy as a last resort at high prices and thin volume (Skåne, sthlmflex). The TSO subscription functions as a de facto price ceiling.

Availability contracts as breakthrough: energy-only payment is insufficient to sustain FSP participation given the 3× year-to-year variation in winter activation frequency. Availability contracts provide the revenue floor that makes the FSP business case viable.

Energy price effects on liquidity: high spot prices destroy cheap flexibility supply. In S2 (2021/22), SE3 average prices tripled (28 → 116 SEK/MWh), causing district heating companies to run electric boilers less — withdrawing cheap, dispatchable thermal load from the flex market at exactly the moment cold-period congestion was highest.

sthlmflex season 3 (2022/23) (Source - sthlmflex säsong 3 (2022-2023)):

S3’s very low activation resulted from a warm winter, high electricity prices, and Stockholm Exergi running 200–300 MW of local city CHP. Product evolution: S3 introduced ShortFlex Availability with forecast-driven hourly targeting (1–5 days ahead), replacing the fixed weekly VeckoFlex schedule.

Ei’s 2023 evaluation (Source - Ei Flexibility in Distribution Grids (2023)):

• Primary driver confirmed: regional DSOs managing peak demand against TSO subscription limits
• Supply dominated by large heating plants; aggregator supply was small in capacity terms
• Key barriers: low revenue and rare activation (sällanköpsmarknad), insufficient transparency, lack of standardization, regulatory uncertainty from pending NC DR
• Ei’s design preference: nationally integrated market over fragmented local platforms; GOPACS cited as model

Phase 2 — Live production markets (2022–present)

Post-pilot, three live markets emerged. E.ON converted its CoordiNet infrastructure directly into commercial operations; Effekthandel Väst continued on NODES; Kinnekulle Energi launched Götene Flex.

E.ON SWITCH markets

Empirical data from info.switchmarket.se (Source - SWITCH Marknadsdata (info.switchmarket.se, 2026)):

Market count: 4 (V2023/24) → 9 (V2024/25) → 12 (V2025/26, including Halland summer). Södra Skåne remains the dominant market:

Declining fill rate despite rising prices reflects grid relief from the October 2024 400 kV upgrade (+600 MW). The price premium over other markets is in the availability rate (Södra Skåne 5,800 vs 3,000–3,500 SEK elsewhere — the DSO-set Model A figure), partly explained by impact factors of ~0.6–0.68 applied in Södra Skåne — normalized for the ~0.6 factor, Södra Skåne’s availability is ~3,500 (FSP-side), in line with other markets; the higher posted rate is the gross-up compensating for lower grid relief per FSP-MW. (The “292” above is the LFM-h activation only; including seasonal LFM-p activation, Södra Skåne’s full V2025/26 activation is ~408 MWh — Source - SWITCH CSV Exports V2025-26 (2026).) Thin market problem confirmed at scale: 6 of 11 markets show zero clearing in V2025/26. Bålsta emerges with the highest V2025/26 fill rate (22.7%, 658 MWh awarded), indicating growing structural congestion in this commuter-belt area north of Stockholm.

Liquidity gap: across all E.ON markets in 2025/26, only 25.2 MW is pre-qualified against a total stated DSO need of 59.5 MW — a 42% fill ratio. 10 qualified FSPs, 19 assets registered. (Source - BeFlexible D5.2 Demo Planning and Deployment 2 (2025))

Comprehensive price history (FlexAbility, volume-weighted average activation prices across all markets): (Source - FlexAbility Delrapport 2 (2025))

The 700 SEK/MWh all-time average is dominated by large early CoordiNet Uppland volumes. Stripping those out, the market is on a consistent upward price trend. Hässleholm is a structural outlier at ~16,000 SEK/MWh.

V2025/26 (computed from per-market info.switchmarket.se CSV exports): total activation ~1,400 MWh; volume-weighted activation price ~5,757 SEK/MWh — but heavily lifted by Hässleholm (~16,000 on 194 MWh); excluding Hässleholm, ~4,100. Largest volumes: Bålsta (458 MWh @ 5,103), Nordöstra Skåne regional (331 MWh @ 2,121), Södra Skåne (408 MWh = TO 292 @ 4,646 + ST 116 @ 4,400). This aggregation combines LFM-h (Tillgänglighetsordrar) and LFM-p (Säsongstillgänglighet) activations, which are additive. The step up from 3,300 (24/25) therefore partly reflects the Hässleholm outlier and the inclusion of seasonal activations, not only a price rise. (Source - SWITCH CSV Exports V2025-26 (2026))

Local market prices vs national alternatives: During activation hours, local flex prices are competitive. In 2024/25, mFRR exceeded local prices in only 16 of 233 activation hours; FCR-D exceeded local in zero hours. Batteries in Effekthandel Väst and FCR-D received roughly equal revenue from each market. The case against local flex market viability based on national market competition is empirically disproven — but activation occurs only 6% of hours, requiring value stacking.

Season 2024/25 aggregate: 233 activation hours (6% of season); 8,800 MWh availability purchased (doubled from prior season); activations cluster around 09:00–10:00.

Kinnekulle Flex — fully manual, operationally essential

Kinnekulle Energi runs Sweden’s only active local flexibility market outside E.ON and Göteborg Energi networks. It is also the only active Swedish LFM not running on SWITCH or NODES — all operations are manual (email/phone avrop, Excel validation). Kinnekulle’s grid faces a 2.5× capacity growth gap (54.5 MW subscribed 2023 → projected 135 MW need by 2028).

MaxUsage discontinued from 2026–27: mandatory time-differentiated power tariffs (EIFS 2022:1, from January 2027) implicitly achieve the same load shifting. The market is moving to a pure LFM-h model, with multi-year bilateral contracts under consideration.

First confirmed multi-market FSP stack: Dafgårds participates in both Svk FCR and Kinnekulle’s local LFM, using a 5 MW elpanna with HVO fuel switching — first documented case of an FSP simultaneously registered in a TSO balancing market and a DSO local flex market.

Operational significance: In V2025/26 week 7, peak demand reached exactly 60 MW — the subscription ceiling. The flex market was operationally essential that week, not merely precautionary. The market graduated from liquidity-building (2024–25) to binding operational necessity (2025–26).

(Source - Flexsäsongen i Götene 2024-2025 Sweco, Source - Kinnekulle Energi Marknadsdata Web 2025-2026, Source - Nationell Dialog Flexibilitet Nätkapacitet 12 Maj 2026)

JämtFlex (2023/24) — proactive pilot

Jämtkraft Elnät’s JämtFlex ran one season as a proactive capability-building pilot while actual flex needs were “small” — the DSO’s goal was to build knowledge and supply ahead of an expected connection wave (EVs, batteries, new industry). Compensation reference from other Swedish markets: 400–5,000 SEK/MWh activation, ~500–800 SEK/MWh availability. (Source - Jämtkraft JämtFlex (web, 2023-24)) Ei’s SGI reporting records 126 upregulation activations for Jämtkraft in calendar year 2024 — first year it appears, and the highest single-DSO count outside Effekthandel Väst. (Source - Ei SGI Data 2023-2024)

FSP participation — the supply side

Palm et al. (2023) provide the only systematic qualitative study of the supply side of Swedish LFMs, interviewing 25 organizations (30 informants) invited to participate in CoordiNet Uppland and Skåne for V2020/21 — 12 enrolled FSPs and 13 PFSPs who declined. (Source - Palm et al LFM Drivers and Barriers (2023))

Monetary incentives matter less than assumed. Most FSPs did not join primarily for revenue — activation was too infrequent, prices too low. The potential for future income was a driver; actual current payoff was not decisive.

The champion — the most important but overlooked driver: The single most frequently mentioned factor — by both FSPs and PFSPs — was an internal champion: an individual inside the organization with personal interest in energy and flexibility who drove the organization’s engagement. Without the champion, the organization would not have participated. This driver was not covered in prior LFM research and emerged spontaneously in interviews.

The aggregator as participation gatekeeper: FSPs who had an aggregator partner would not have participated without one. The aggregator handled technical setup, bidding and activation management, day-ahead forecasting and scheduling, and revenue distribution. See Aggregation.

Top barriers:

• Information barrier (primary PFSP barrier): difficulty understanding and explaining the market concept internally to secure budget, mandate, and cross-departmental coordination
• Automation (universal requirement): manual bidding and activation universally described as unworkable at scale
• D-1 gate closure loses all real-time information between bidding and delivery; short seasonal contracts prevent capital investment in enabling technology
• Baseline uncertainty: confusing concept and susceptible to manipulation — see Baseline Methods
• TSO market revenue competition: balancing market revenue approximately 5× higher than CoordiNet Skåne’s local market, creating rational diversion to national markets

Non-monetary drivers worth cultivating: social responsibility, sustainability image, learning opportunity, and grid capacity risk mitigation for organizations denied connection capacity upgrades.

Emerging Skåne DSO markets

The Skånes Effektkommission NUP synthesis (May 2025) provides the first systematic picture of flex market plans across smaller Skåne DSOs — largely outside the E.ON SWITCH and Effekthandel Väst ecosystems. (Source - Nätutvecklingsplaner i Skåne 2025-2034 Region Skåne (2025))

Key observations:

• Ystad 2027 is a hard planning date driven by EU shore power regulation (all ships >8,000 GT require shore power from 2030) and E65 charging infrastructure growth
• Österlens 2028 is triggered by solar growth (up to 250% increase) that will exceed consumption peak, requiring production curtailment capacity
• Skånska Energi Nät (SENAB) explicitly tied flex market participation to “regulatory development and revenue cap incentives” — first public documentation of a Swedish DSO making market participation conditional on Ei’s TOTEX reform (RP5, from 2028)

These markets, if they materialize, would add 20–25 MW of flex procurement capacity to the Skåne region outside E.ON’s SWITCH infrastructure.

Data gaps

• Whether Göteborg Energi / Mölndal Energi will continue Effekthandel Väst given the NC DR implementation work required — see also Effekthandel Väst › Data gaps

• Reason for Bålsta’s high V2025/26 fill rate — what is the specific congestion driver? — see also SWITCH › Data gaps

• Season 5 (V2025/26) Effekthandel Väst FSP count and total cost — activation volume now known (~1,744 MWh: Göteborg ~1,214 MaxUsage-heavy, Mölndal ~530; see Effekthandel Väst › Market outcomes); FSP count and cost still open