> Sweden has ordered the expansion of a key power interconnector to Denmark to be halted after failing to reach agreement with the European Commission over bottleneck fees.
The interconnect already exists as Konti-Scan 1 and 2. Konti-Scan Connect, when built, will replace them.
> Bottleneck revenues, or capacity fees as they are also called, arise when there are large price differences between electricity areas, often between electricity area 2 (southern Norrland) and 3 (Svealand and northern Götaland). The price differences arise when the capacity in the network is not sufficient to transfer the electricity surplus in the north to the south where the supply is too small. When Svenska kraftnät handles this, revenues arise for the authority corresponding to the price differences.
In the UK, which has a single electricity market for the whole country, we have curtailment fees. There is insufficent grid capacity between Scotland and England. When lots of power in England is needed, Scottish wind farms could provide it, but the grid can't deliver it. So the grid operator pays twice -- a curtailment fee to the wind farms to ask them to dump their energy, and a fee to English power stations to switch on the gas turbines and provide the power England needs that it can't get from the bottlenecked grid connection to Scotland.
I have the suspicion that Sweden fears having to pay the equivalent of curtailment fees to Denmark. The EU agreed that wouldn't have to happen... but the EU still wants to constrain Sweden into using its collected bottleneck fees to upgrade its grid infrastructure, hastening their demise, rather than use it to subsidise power production.
> In March, the Commission agreed that Sweden would not have to share bottleneck fees paid to Svenska Kraftnät with other EU countries. But a new conflict has blown up over some of the Commission’s other proposals. According to TT, the Commission will not agree to let Sweden use the bottleneck fees to fund power production as well as grid expansion.
Sweden will not pay curtailment fees, such a thing does not exist. The reason is exactly what you quote at the end.
To state it again:
1. The intranational powercables means that German demand raises electricity prices in southern Sweden, which means businesses and consumers pay a premium vs what they would have paid without the cable
2. The extra charge is captured by network operators as what is called bottleneck fees and it's billions of euros per year, very large sums
3. The EC first wanted to confiscate these funds, which come from Swedish consumers and businesses. Now they want to rule about their use. Obviously this is completely unacceptable and nothing more than a bureaucratic powergrab, and no country would accept it.
You must always remember that the European Commission is unelected and has the same level of democratic involvement as that of China's Standing Committee.
Hmm, so basically Sweden has a surplus of goods (electricity), but the EU commissions is trying to pay for it with coupons that look like money but can't be used to buy everything, and now Sweden is saying "no, tak".
Sweden does not have surplus electricity. We have production of electricity that is better matched to demand than other nations, most notably the disaster that is Germany. German demand is causing Swedish industrial production to shut down due to increased energy prices, which makes production unprofitable.
From an economical and political point of view this is actually interesting.
The free market in EU caused the high electricity prices in Germany to be partially transferred to Swedish consumers, despite Sweden being a net exporter.
From a political POV, Sweden couldn't really stop this (or the government didnt want to as they were making bilions on transfer costs). And this cable would make things significantly worse for the swedish consumers
Germany cleverly designed this particular variant of the 'free market' to ensure that access to cheap energy can't be used as a competitive advantage against their industries when they closed their nuclear plants. Having the same price in northern Sweden and Norway in winter as in central Europe is insane.
Now Sweden is stuck in a terrible situation where we're forced to quickly sell our excess energy to Google/Microsoft/Facebook before the EU will force the use of the bottleneck fees to build more cables to Germany.
This is a good live map of how Europe is partitioned into zones and what their prices are. Right now you can see a large price difference between Sweden and Denmark and also with Norway.
Britain is often suffering high prices, likely due to lack of capacity in connections with the mainland EU.
Europe is scrambling to expand its electricity network, which doesn't have enough capacity. I don't know how badly Sweden and Denmark are affected, but in e.g. the Netherlands it inhibits the move away from fossil fuel for both homes and companies, and even disrupts building developments. So, anything that delays this for unexpected reasons is news. Is it interesting enough for HN? That's for you to decide.
Sweden is very well positioned due to well developed hydro, but when germany was forced to give up russian gas, more electricity was exported, causing record high prices.
Interestingly, the hydro plants are located in the north and the national power grid is not dimensioned for massive export, so the export to germany from the south of sweden caused a strong price gradient.
Most of the US isn't online yet, so I would expect this to be mostly people from the East side of the pond voting on it. In any case, onto the merits of the article itself:
Renewable, net zero energy requires massively expanding the grid to regions that cannot supply enough from regions that can. I.e. hydro during Dunkelflaute.
Here, we find yet another type of stumbling block in setting up such a system.
You're not missing anything. Its extremely uninteresting and nothing out of the ordinary in the early phases of large infrastructure projects. I guess EU/Denmark/power generation is a sure thing to reach the HN front page nowadays.
Good one. If anything, this is a refreshing change from the daily "look how independent and free Europe is now that the commune of Nowhereaux's planning committee switched from Excel to LibreOffice" article
The Danish traders are parasites on the energy infrastructure earning billions in arbitrage fees taking advantage of being the transit of Norwegian and Swedish power exports. All I can see from the EU energy market is an enormous wealth transfer from the users to the middle men. The market does not work unless the goal is to enrich the financial elite.
Resource is expensive in location A due to too low supply. Resource is cheap in location B due to higher supply. Moving resource from B to A is non-trivial.
Why is it so crazy that the facilitators of getting the resource moved get compensated?
Let's not make this a Nordic conflict. We, the Nordic countries need to stay brothers and sisters with each other as we have done for centuries (not without sometimes serious squabbles, but still). Not even a European countries conflict. It is the EU as an institution that has started growing and reaching way beyond the will and welfare of the people.
Spain tried to kick out all the bankers (in this case "the jews"). It was a financial disaster.
That you don't understand financial markets doesn't mean the realities of those marks won't hurt you really really badly if you try to adjust it with communist misapprehensions.
https://www.europesays.com/dk/80254/
> Sweden has ordered the expansion of a key power interconnector to Denmark to be halted after failing to reach agreement with the European Commission over bottleneck fees.
The interconnect already exists as Konti-Scan 1 and 2. Konti-Scan Connect, when built, will replace them.
What are "bottleneck fees"?
https://swedenherald.com/article/surplus-from-electricity-cu...
> Bottleneck revenues, or capacity fees as they are also called, arise when there are large price differences between electricity areas, often between electricity area 2 (southern Norrland) and 3 (Svealand and northern Götaland). The price differences arise when the capacity in the network is not sufficient to transfer the electricity surplus in the north to the south where the supply is too small. When Svenska kraftnät handles this, revenues arise for the authority corresponding to the price differences.
In the UK, which has a single electricity market for the whole country, we have curtailment fees. There is insufficent grid capacity between Scotland and England. When lots of power in England is needed, Scottish wind farms could provide it, but the grid can't deliver it. So the grid operator pays twice -- a curtailment fee to the wind farms to ask them to dump their energy, and a fee to English power stations to switch on the gas turbines and provide the power England needs that it can't get from the bottlenecked grid connection to Scotland.
I have the suspicion that Sweden fears having to pay the equivalent of curtailment fees to Denmark. The EU agreed that wouldn't have to happen... but the EU still wants to constrain Sweden into using its collected bottleneck fees to upgrade its grid infrastructure, hastening their demise, rather than use it to subsidise power production.
> In March, the Commission agreed that Sweden would not have to share bottleneck fees paid to Svenska Kraftnät with other EU countries. But a new conflict has blown up over some of the Commission’s other proposals. According to TT, the Commission will not agree to let Sweden use the bottleneck fees to fund power production as well as grid expansion.
To state it again:
1. The intranational powercables means that German demand raises electricity prices in southern Sweden, which means businesses and consumers pay a premium vs what they would have paid without the cable
2. The extra charge is captured by network operators as what is called bottleneck fees and it's billions of euros per year, very large sums
3. The EC first wanted to confiscate these funds, which come from Swedish consumers and businesses. Now they want to rule about their use. Obviously this is completely unacceptable and nothing more than a bureaucratic powergrab, and no country would accept it.
This sounds... exceptionally uninteresting. Am I missing something here?
Or is this just a dog whistle for the HN crowd who like to complain about anything related to EU regulations?
The free market in EU caused the high electricity prices in Germany to be partially transferred to Swedish consumers, despite Sweden being a net exporter.
From a political POV, Sweden couldn't really stop this (or the government didnt want to as they were making bilions on transfer costs). And this cable would make things significantly worse for the swedish consumers
Now Sweden is stuck in a terrible situation where we're forced to quickly sell our excess energy to Google/Microsoft/Facebook before the EU will force the use of the bottleneck fees to build more cables to Germany.
Britain is often suffering high prices, likely due to lack of capacity in connections with the mainland EU.
https://app.electricitymaps.com/map/zone/DK-DK2/live/fifteen...
Interestingly, the hydro plants are located in the north and the national power grid is not dimensioned for massive export, so the export to germany from the south of sweden caused a strong price gradient.
Renewable, net zero energy requires massively expanding the grid to regions that cannot supply enough from regions that can. I.e. hydro during Dunkelflaute.
Here, we find yet another type of stumbling block in setting up such a system.
Yeah, not super riveting stuff, I suppose...
Only topped by the number of people who love to cheer for US vs China while living in neither.
Is that something that really requires that much more regulation? If there's one thing markets tend to be good at solving it's arbitrage.
Why is it so crazy that the facilitators of getting the resource moved get compensated?
That you don't understand financial markets doesn't mean the realities of those marks won't hurt you really really badly if you try to adjust it with communist misapprehensions.
There's a strong tradition of a Jewish Left fwiw.
The point is that banking is something you remove at your peril.