The Regulatory Architecture for Swedish Flexibility 2026–2028

Five regulatory instruments are converging on Swedish flexibility markets between 2026 and 2028. Each addresses a different dimension of the same underlying system — how distributed flexibility resources find their way into the grid services that need them. But they operate on different timelines, have different dependencies, and unlock different things for different actors. Understanding them as a system — rather than five parallel processes — is the prerequisite for anticipating what actually changes and when.

The five instruments

A sixth dimension — tariff reform (effektavgift redesign + förhandsprövning) — is covered in detail in Swedish DSO Tariff Reform — Three Parallel Tracks (2025–2027) and is referenced here where it interacts with the five instruments above.

Instrument 1 — NC DR: the market rules

The Network Code on Demand Response is the most architecturally comprehensive of the five instruments. It defines who can participate in flexibility markets, how they register and qualify, what products look like, how TSOs and DSOs coordinate over shared resources, and what infrastructure (FIS) is required. Commission adoption via comitology is now expected Q4 2026–Q1 2027 (per ENTSO-E’s June 2026 Balancing Report), later than earlier “summer 2026” assumptions; the Commission’s final text had not been published as of the report’s publication. (Source - ENTSO-E Balancing Report 2026)

What the NC DR does not resolve: Independent aggregation compensation — the financial mechanism enabling cross-BRP aggregation — was removed from the NC DR and assigned to an update of the EB GL (Electricity Balancing Guideline). This is an important architectural separation: NC DR sets market access rights; EB GL governs the financial plumbing. Sweden’s BSP implementation gap is an EB GL enforcement matter, not something NC DR T&C development resolves.

Swedish T&C development: Ei must design and approve the process through which system operators (all 168 elnätsföretag, per Ei R2026:05, plus Svk) develop national terms and conditions across the seven domains below; the process must be ready no later than 12 months after the NC DR enters into force. Ei announced on 20 November 2025 that it had begun designing this process, ahead of formal NC DR adoption. Project leader: Yuri Joelsson. Sweden’s many DSOs — predominantly small and medium-sized — are the central design challenge for representative participation in T&C development. (Source - Ei NC DR Förberedelser (2025))

Key T&C domains requiring resolution:

1. Service provider qualification framework (including SPG for aggregation)
2. Baseline methodology (national register of approved methods — no EU-wide mandatory baseline)
3. FIS design and implementation sequence
4. TSO-DSO coordination: observability areas, grid prequalification (three-status system), temporary limits, data exchange
5. Local market procurement rules (minimum bid size — currently 0.1 MW proposed but in brackets; derogation conditions)
6. DNDP local services content requirements
7. Small CU simplification thresholds (≤50 kW exemptions)

Five additional critical-action priorities from the DSO Entity (2026), correctly mapped to the report’s own A1–A5 (Source - DSO Entity Distributed Flexibility Practices (2026)): technical aggregator regulation and cybersecurity (A1), single-CU registration beyond the service validation point (A2), compensation-effect scope beyond the same connection point (A3), grid reliability/non-discrimination as an independent objective (A4), and data-exchange standardisation (A5). These are not resolved in ACER Annex 1 and must be addressed explicitly in Swedish T&C.

FIS timeline: T&C for FIS developed within 18 months of rules approval; existing platforms (SWITCH, NODES) may continue until national FIS is implemented; they must be updated or replaced within 2 years of FIS T&C approval; full interoperability within 4 years of entry into force. If NC DR enters force in late 2026 or early 2027: FIS T&C ~2028; existing platforms replaced ~2030; full interoperability ~2030. FIS is sequentially dependent on DHV (Instrument 5).

Instrument 2 — FNA/FNAM: the needs quantification

The Flexibility Needs Assessment is the upstream instrument that tells the system how much flexibility it needs, where, and at what timeframe. Part of the NC DR framework, but operational ahead of the main network code: ACER Decision 05-2025 (the FNAM) entered into force July 25, 2025. Sweden’s first FNA (Svk’s final report) was published 29 June 2026, approved by Ei in July 2026.

The three-way linkage (NC DR Art. 29.1): FNA must be considered by the NC DR Art. 29.1 biennial assessment (each SO, every 2 years), which is in turn used to fulfill DNDP obligations (Directive Art. 32(3) and 51(3)). See Flexibility Need Assessment › NC DR Art. 29.1 — the three-way FNA-DNDP-NC DR linkage for the diagram.

The FNA is not a standalone exercise — it is the upstream input that simultaneously feeds the NC DR biennial assessment and the DNDP cycle. This means one data collection effort (Tabell 15 template) serves three regulatory obligations, reducing duplication.

What FNA 2026 did and did not deliver: Sweden’s first FNA used minimum requirements agreed in the November 2025 tripartite agreement (Svk + DSOs + Ei). Four significant elements were deferred to FNA 2028: contractual means (villkorade avtal vs market-based — regulatory framework still unclear); guiding criteria for existing resources (requires flex register that doesn’t yet exist); SO GL Art. 182 grid prequalification data; and Svk transmission-level flexibility needs (methodology not mature). Confirmed in the published report: the FNA 2026 covers distribution-network and system-level flexibility needs, but no transmission-level needs and no data on which procurement mechanisms are viable.

What FNA 2026 generated that is new: the first official, systematic Swedish data on market barriers — specifically FNAM Barrier Category 6, which asked DSOs directly whether they have sufficient incentives to consider non-wire alternatives (91 anonymous survey responses received). Headline system-level result: RES spill rises from ~3.7 TWh (2030) to ~5.2 TWh (2035) and is structural rather than extreme-event-driven; under Sweden’s base-case RES ambition the analysis finds zero unmet RES-integration need — only a more ambitious sensitivity scenario produces a gap (~4 TWh by 2035). Distribution-level: the RES-linked share of down-regulation need is 52% (2030) rising to 71% (2035). See Flexibility Need Assessment › FNA 2026 results (Svk final report, 29 June 2026) for full detail. (Source - Svk FNA 2026 Slutrapport (2026))

Downstream from FNA: National indicative targets for non-fossil flexibility (Art. 19f) are due January 2027. ACER EU-wide cross-border analysis due July 2027. FNA 2028 cycle begins with improved scope.

Instrument 3 — DNDP/EIFS 2024:1: the planning backbone

DNDPs are the primary data source for the FNA — the ACER/CEER 2025 guidance states this explicitly. They are also the vehicle for the anticipatory investment obligation (Ei2025:03). And under NC DR Arts. 43–44, they will become the mandatory disclosure of where local flexibility services are needed and how cost-effectiveness assessments were performed.

EIFS 2024:1 is in force. 155 first-round DNDPs were submitted by December 2024. Ei PM2025:03 published the synthesis (covering 152 of the 155) in March 2025. Next cycle: submission deadline 31 December 2026 (for the 2027–2036 period).

What the next DNDP cycle must deliver differently:

• NC DR Arts. 43–44 will (once in force) require a structured local services assessment using the FNAM Tabell 15 template — the same format as the FNA. The two cycles must be aligned
• Both-direction flexibility needs (upward and downward) — already required from FNA 2026 by the Tabell 15 v1.03 template (obligatory ↑/↓ rows, value 0 permitted); Sweden’s DNDP first round reported only one direction, so the 2027–2036 DNDP cycle must catch up
• Cost-effectiveness analysis of flexibility vs. reinforcement — currently varies widely across DSOs; NC DR will require documented methodology

Vattenfall’s N/A position: Vattenfall Eldistribution reported N/A for all flexibility needs across all horizons in its first DNDP — a deliberate policy stance that no market-based flexibility is viable anywhere in its network. If this position is carried forward into DNDP 2026 and FNA 2028 unchanged, Sweden’s largest DSO by network area will continue to produce zero input to the FNA’s distribution-network quantification, despite expecting +7,500 MW of demand growth requiring 22 major investments.

Instrument 4 — TOTEX RP5: the incentive layer

The revenue cap reform is the only instrument that operates entirely within Sweden’s national regulatory framework — it does not depend on NC DR adoption, FNA results, or DHV construction. It is also the instrument that can change DSO behaviour most directly by making flexibility procurement economically equivalent to grid investment.

The mechanism: TOTEX benchmarking covers both capex and opex in a single efficiency measure. A DSO that addresses a capacity problem by procuring flexibility (opex) is benchmarked identically to one that builds new grid (capex). This is lösningsneutralitet — regulatory language for “the incentive system does not care how you solve the problem.” The statutory basis is ellagen 5 kap. 12a § (Lag 2022:596) (Source - Ellag (1997-857)); the ellagen is replaced by the elmarknadslag from 1 January 2027 (Elmarknadslagen).

The timeline: Calculation föreskrifter in force H1 2027; revenue frame decisions by October 2027; RP5 begins 2028. Between now and RP5 launch, DSOs operate under RP4 — where the CAPEX bias remains fully operative. Every flexibility service contract signed before 2028 is signed into a regulatory framework that still systematically favours grid investment.

What TOTEX does not do: it does not create demand for flexibility services where no grid constraint exists. It removes a disincentive; it does not create an incentive. The actual procurement demand is determined by whether grid constraints exist and whether market-based flexibility is available and cost-effective. TOTEX makes the cost comparison neutral; the DNDP and FNA determine whether the comparison is triggered.

The FlexAbility qualification: TOTEX regulation must not penalize proactive grid building for future energy system needs. A purely cost-efficiency-focused benchmark risks discouraging anticipatory investments that society requires. Ei is investigating adjustments for heterogeneous company conditions (electricity prices across bidding areas, ground conditions). The maximum cap on the incentive’s revenue impact is also unresolved. Both under investigation spring 2026.

Instrument 5 — DHV/FIS: the data infrastructure

The centralt datahanteringsverktyg (DHV) and its companion Flexibilitetsinformationssystem (FIS) are the most critical dependency in the architecture — because almost every other instrument depends on infrastructure that doesn’t yet exist.

The September 2025 government decision assigned Ei and Svk jointly to develop the DHV proposal (Regelingsbeslut KN2025/01781), explicitly naming three required functions: market settlement, data distribution, and compensation for independent aggregation. The joint report was delivered in September 2026 (Ei R2026:08); the government has not yet decided. (Source - Uppdrag Centralt Datahanteringsverktyg (2025), Source - Ei R2026-08 Förslag Centralt Datahanteringsverktyg (2026))

Ei+Svk’s emerging design (consultation document, early 2026): two-component architecture:

• DHV (centralt datahanteringsverktyg): handles delivery structure, market master data, and settlement. Svk proposed as operator. Must go live first.
• FIS (flexibilitetsinformationssystem): handles DER registration, qualification, measurement, verification, and settlement basis for flexibility deliveries. Implements NC DR Arts. 24–28 register-once principle, single national access point, data portability. Sequentially dependent on DHV v1.

Build timeline: Ei and Svk’s September 2026 report (Ei R2026:08) gives an indicative schedule in months from the start of implementation, not calendar dates: first go-live in months 36–42 if the old Elmarknadshubb work is reused, 90–96 months if the solution is built from scratch. The government has not set a start; on the wiki’s own arithmetic a 2027 start means ~2030–2031 (reuse) or ~2034–2035 (from scratch). FIS operational: after DHV v1. (Source - Ei R2026-08 Förslag Centralt Datahanteringsverktyg (2026))

What DHV unlocks:

• Model 4 independent aggregation compensation (korrigerad faktura) — the compensation mechanism for sub-1 MW household resources
• NC DR FIS register functions — SPG qualification, single national access point, CU switching within supplier-switching timeframes, data portability across platforms
• Settlement infrastructure for cross-BRP aggregation compensation — currently exists at eSett (Nordic) level but not at Sweden’s national level

What is possible without DHV: Model 3 aggregation (multiple delivery points, ≥1 MW consumption or any production/storage); BSP free-standing role at balancing market level (elmarknadslagen writes BSP/BRP into law; full implementation expected 2028–2029, independent of DHV); existing SWITCH/NODES platforms continuing under transitional provision.

The dependency map

The critical path

The critical path through this architecture is DHV. Almost every element that would make Swedish flexibility markets functionally complete passes through it:

• FIS requires DHV v1
• Model 4 compensation (sub-1 MW household resources) requires DHV
• NC DR FIS register-once principle requires DHV infrastructure
• NC DR baseline verification and settlement requires FIS → requires DHV

On the September 2026 report’s schedule (36–42 months with reuse, 90–96 without) DHV would be operational ~2030–2031 to ~2034–2035 on a 2027 start. Full FIS compliance follows. The NC DR’s 4-year interoperability deadline (from Commission adoption now expected Q4 2026–Q1 2027, so ~2030–2031) is tight against this trajectory.

What is NOT on the DHV critical path: The free-standing BSP (2028–2029), TOTEX RP5 (2028), the effektavgift new model (post April 2027 proposal), and förhandsprövning (conditional on government adoption, then Ei föreskrifter ~2028+) are all independent of DHV. These reforms proceed regardless of infrastructure build progress.

What each actor faces

Ei: Simultaneously running the NC DR T&C process design, the DHV/FIS architecture proposal, the TOTEX methodology finalization, the Art. 6a flexible-connection framework development (mandate under Prop. 2025/26:16, in force 1 January 2026; the Directive’s own transposition deadline was 17 January 2025), the effektavgift model mandate (due April 2027), the förhandsprövning legislative proposal (pending government adoption), and supervisory authority over the FNA process. The workload concentration in 2026–2027 is exceptional.

Large DSOs (Vattenfall, Ellevio, E.ON, Skellefteå Kraft): Primary participants in FNA 2026 data delivery (done April 2026); must prepare for the DNDP 2026 cycle (due 31 December 2026), ahead of the NC DR Arts. 43–44 content requirements; under Ei effektavgifter tillsyn (Ellevio and Göteborg Energi Nät named); will be the primary beneficiaries of TOTEX reform from 2028; must participate in NC DR T&C development as both regional and local grid operators.

Small DSOs (the long tail outside the six large — ~162 of today’s 168 companies; historically ~149 of the 155 first-round DNDP submitters): Structurally under-capacitated for the compliance stack they face: FNA data submission done (April 2026); DNDP 2026 due December 2026; NC DR T&C process participation; TOTEX RP5 preparation. The small DSO capacity problem documented in Small DSO Capacity — The Binding Constraint on Swedish Flexibility Policy intersects with every one of these five instruments. If small DSOs cannot meaningfully participate in NC DR T&C development, Sweden’s national terms will be shaped by the six large companies.

Aggregators: The 2026–2028 window is the regulatory unlocking period: NC DR provides the market access rights framework; TOTEX creates DSO demand by eliminating the CAPEX bias; FNA 2026 produces the first official national map of where flexibility is needed. But the infrastructure that would make aggregation of household-scale resources fully operational (DHV/FIS) is roughly 4–5 years away on the report’s reuse schedule and 8–9 years away without reuse. Aggregators building scale now are doing so ahead of the infrastructure, into a market that will significantly expand when DHV arrives.

Svenska kraftnät: Joint DHV/FIS proposal with Ei (September 2026); implementing free-standing BSP by 2028; TSO-DSO coordination T&C development under NC DR; FNA Designated Entity (national report due July 2026); anvisningssystem proposal requiring government adoption. The heaviest operational load in the 2026 calendar year.

The 2026–2028 window in practice

2026:

• FNA 2026 final report published by Svk (29 June); approved by Ei (July 2026)
• DHV/FIS architecture proposal delivered (September)
• NC DR Commission adoption (now expected Q4 2026–Q1 2027, not within 2026 as earlier assumed)
• DNDP 2026 cycle submissions (31 December) — plans for 2027–2036
• Ei begins NC DR T&C process design; engagement with the DSOs begins

2027:

• National non-fossil flexibility targets (January, Art. 19f)
• NC DR national T&C development process active (12-month deadline from EIF)
• TOTEX föreskrifter in force (H1)
• Revenue frame decisions for RP5 (October)
• Effektavgift new model proposal from Ei (April)

2028:

• RP5 begins — TOTEX fully operative
• Free-standing BSP targeted (full BSP/BRP implementation 2028–2029) — cross-BRP aggregation unlocked at balancing market level
• NC DR FIS T&C approved (approximately 18 months after ~mid-2027 rules approval)
• SWITCH, NODES must prepare for FIS migration (2-year clock from FIS T&C)

2030–2035 (indicative; depends on the start and on reuse):

• DHV operational (on a 2027 start: ~2030–2031 with reuse, ~2034–2035 from scratch)
• FIS operational (after DHV v1)
• Model 4 aggregation compensation operational
• NC DR full interoperability (~2030–2031: 4-year deadline from entry into force, adoption now expected Q4 2026–Q1 2027)

Relationship to other wiki pages

• Network Code on Demand Response — full detail on NC DR structure, FIS, TSO-DSO coordination, open questions
• Flexibility Need Assessment — FNA/FNAM process, Swedish first cycle, four deferrals, Tabell 15 bridge to DNDP
• Distribution Network Development Plan — DNDP obligation, three-pillar planning process, NC DR Arts. 43–44 requirements
• Ei — institutional actor for NC DR T&C, TOTEX, DHV proposal, Art. 6a, FNA supervision
• Elmarknadshubb — DHV/FIS history, 2015–2025 pause and restart, architecture design
• Swedish DSO Tariff Reform — Three Parallel Tracks (2025–2027) — the tariff dimension (TOTEX, effektavgift, förhandsprövning) in full detail
• Independent Aggregation in Sweden — The Implementation Gap — DHV as the primary constraint on aggregation compensation
• Small DSO Capacity — The Binding Constraint on Swedish Flexibility Policy — why small DSO organizational capacity intersects with all five instruments
• TSO-DSO Coordination — The Central Design Problem — the NC DR coordination architecture and its open design questions