The current Electricity Act dates from 1997. Since then, the Act has been amended extensively to keep pace with developments in the Swedish and European energy markets. As a result, the Electricity Act has become difficult to navigate, and the terminology no longer reflects applicable EU law. A comprehensive overhaul has also been needed to align the Electricity Act with the amended EU Electricity Market Directive (Directive 2024/1711 amending Directives 2018/2001 and 2019/944).
Two new laws will replace the Electricity Act; the Electricity Market Act and the Electric Lines Act, where the Electricity Market Act will cover market functions, system responsibility, consumer protection, and other commercial aspects of the electricity sector and the Electric Lines Act will regulate network concessions (Sw. nätkoncessioner) for electrical lines and related infrastructure.
The Electricity Market Act updates the rules on balance responsibility, bringing them closer to EU terminology. In simple terms, supply must always meet demand on the electricity grid. Svenska kraftnät holds the operational responsibility for maintaining this balance and may purchase balancing services (Sw. balanstjänster) from a balancing service provider (Sw. leverantör av balanstjänster) (BSP). Market participants must also do their part by ensuring that a balance responsible party (Sw. balansansvarig part) (BRP) is assigned for each delivery and feed-in point.
The new legislation draws a clearer line between balance responsible parties and balancing service providers. The BRPs bear economic responsibility for imbalances at their delivery points. In practice, they forecast consumption and buy electricity to cover shortfalls, or sell any surplus if actual consumption turns out lower than expected. The BSPs serve a different function by helping correct imbalances across the system, for instance by providing extra electricity at short notice.
The current Electricity Act does not use the term BSP, but operates with a single role, the balance responsible (Sw. balansansvarig), covering both of the functions that EU law treats as separate. Under the Electricity Market Act, a BRP is a market participant, or its chosen representative, responsible for that participant's imbalances, while a BSP provides balancing energy or balancing capacity to the transmission system. The two roles are not mutually exclusive; a BRP may itself be, or may appoint, a BSP. Chapter 11 of the Electricity Market Act is drafted as a complement to the EU Electricity Market Regulation (2019/943) and the EU Balancing Guideline (Regulation 2017/2195) rather than as a free-standing Swedish regime.
The term grid company (Sw. nätföretag) is replaced by the term system operator (Sw. systemansvarig), an overarching category split into two roles. Transmission system operators (TSOs) (Sw. systemansvarig för överföringssystemet) are responsible for the high-voltage national transmission grid; distribution system operators (DSOs) (Sw. systemansvarig för distributionssystemet) handle regional and local grids. In Sweden, Svenska kraftnät is the primary TSO, operating the national transmission grid. A number of other companies act as DSOs. End customers, meanwhile, buy their electricity from electricity suppliers, who use the DSO’s grid to deliver it. The new terminology is meant to clarify who does what and to ensure consistency with applicable EU regulations.
Svenska kraftnät will no longer hold the formal title of system-responsible authority (Sw. systemansvarig myndighet). Instead, supervisory responsibility for operational security will move to the Swedish Energy Markets Inspectorate (Sw. Energimarknadsinspektionen). That said, Svenska kraftnät keeps its operational powers and responsibility as the TSO, including the authority to direct balancing service providers and electricity producers to adjust their infeed or offtake when needed to maintain system stability.
The new legislation abolishes the previous system under which customers who refrain from choosing an electricity supplier are assigned to a default supplier. Under the new legislation, customers who have not made an active choice of electricity supplier will not have access to electricity until they do so.
For customers who are unable to enter into a contract with their preferred electricity supplier, the new legislation introduces a supplier of last resort system (Sw. leveransskyldig sistahandsleverantör). The electricity supplier with the largest market share in each local grid area will be designated as the supplier of last resort. As a general rule, this supplier may not refuse to enter into an electricity supply agreement with customers in its designated area – though it may require security from customers with poor creditworthiness. Customers served by the supplier of last resort will be able to choose among the supplier’s standard market offerings, giving them access to competitive terms.
The provisions introducing a supplier of last resort system will enter into force on 1 July 2027, six months after the main body of the legislation comes into effect. Transitional rules will apply to existing assigned electricity contracts, which will remain valid until 30 June 2027.
The Electricity Market Act introduces rules on energy sharing from renewable energy sources. Under these rules, a customer may consume renewable electricity produced at a different location if (i) they own, lease, or rent the production facility (in whole or in part); or (ii) the right to the electricity has been transferred from the producer of the electricity, provided that participation in flexibility or energy efficiency schemes is not the producer’s principal commercial or professional activity.
Energy sharing is one way for customers to qualify as “active customers” under Directive 2019/944. Active customers may transfer their rights to shared electricity to other active customers without needing to become licensed electricity suppliers.
Energy sharing is allowed anywhere within the same bidding zone (Sw. elprisområde). Businesses may only participate if their total installed capacity does not exceed 6 MW. A BRP must also be assigned for each feed-in point used in energy sharing. Importantly, energy sharing may not be the participant’s primary commercial or professional activity – so while a farm or business may share surplus electricity as a side activity, commercial energy trading through the energy sharing framework is not permitted.
The legislation also introduces energy sharing organisers (Sw. organisatörer av energidelning), which are third parties that participants may appoint to facilitate their arrangements. Organisers might handle registration, communication, technical installations, or billing. Where an organiser handles billing commercially, it will face consumer protection obligations similar to those applying to electricity suppliers. Small-scale arrangements, though, are exempt from certain supplier obligations.
Energy sharing can reduce participants’ electricity costs, as the electricity supplier must deduct shared electricity from the participant’s total measured consumption when billing. For electricity suppliers, however, the new rules entail lower revenues from participating customers and increased administrative costs, as suppliers must keep a register of these customers and develop systems for calculating deductions. Suppliers may offset these costs and the associated costs and the associated loss of revenue to some extent, but may not offer participants in energy sharing less favourable terms than other customers unless the difference is objectively justified. More detailed rules on the methods for calculating the deduction are not set out in the Electricity Market Act itself, but will instead be laid down in secondary legislation issued by the government or the authority designated by the government.
Much of the reform is editorial in nature, with the primary aim of clarifying the Swedish legislation and aligning it with EU law. The reforms will nonetheless have practical implications for several categories of market participants. Electricity customers must now actively choose their supplier to receive electricity, and the new energy sharing framework may allow them to participate in energy sharing arrangements and benefit from renewable energy. DSOs face new responsibilities, including identifying the electricity supplier with the largest market share in their local grid area and publicising this information as part of designating that supplier as the supplier of last resort in their areas. Electricity suppliers may face new challenges, as customers currently on an assigned electricity contract will need to actively choose to stay with their current supplier or else be transferred to the designated supplier of last resort. These suppliers may therefore need to step up their marketing to encourage such customers to switch to ordinary electricity contracts. Conversely, electricity suppliers that hold the largest market share in a grid area may acquire additional customers through their designation as supplier of last resort. Since suppliers of last resort will, as a general rule, be obliged to contract with customers in their designated area, including customers with poor creditworthiness (albeit subject to the right to require security), these suppliers will likely need to strengthen both their operational capacity and their credit risk management.
Most of the new legislation takes effect on 1 January 2027, with some provisions following six months later. With implementation now only months away, market participants – including electricity suppliers, DSOs, and customers – should begin reviewing their existing arrangements and assessing how the changes will affect them or their operations, and whether any existing agreements need to be amended. It will also be important to monitor the government’s forthcoming secondary legislation and regulatory guidance, which will provide further detail on the implementation of the new laws.
