UPDATE 2-Sweden halts plans for power cable to Denmark over disagreement with EU funding plan

Sweden will ​put on hold plans for a ​new power cable to ‌Denmark, Energy ​Minister Ebba Busch said on Friday, adding that the country disagreed with a European Commission proposal on the use ‌of revenues from electricity congestion charges.

This year Sweden threatened to restrict electricity exports to neighbours unless disagreements with the European Commission over the use of national funds for EU energy ‌projects were resolved. Sweden exports excess power from its fleet of nuclear, hydropower and renewable ‌energy generators via cable to countries including Denmark, Finland and Germany, for which it expects to charge 130 billion Swedish crowns ($14.11 billion) over the coming decade.

Busch said it wants to able to use the ⁠revenue ​from Swedish congestion charges to ⁠build electricity production capacity, but the Commission's current proposal indicated it would have to use the money ⁠for the energy grid specifically. "We are now moving from words to action and will ​not invest in new cables to continental Europe," she said, calling the Commission proposal "unacceptable".

Congestion ⁠revenues arise when grid constraints prevent electricity from flowing to high-demand areas, resulting in substantial earnings for network ⁠operators. Busch ​said Sweden would pause the Konti-Skan Connect cable between southwestern Sweden and Denmark, which is designed to replace two ageing power cables.

The centre-right government is trying ⁠to secure funding for four large-scale nuclear reactors, with installed capacity of around 5,000 MW, or ⁠the equivalent ⁠in small, modular reactors. Half of those should be onstream by 2035. ($1=9.2127 Swedish crowns)

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