Swedish benefits – Danish costs

Swedish benefits – Danish costs

April 13, 2015

Svenska Kraftnät regularly resorts to limiting export capacity on the Oresund-connection in order to solve internal bottleneck problems in the Swedish electricity network.

On behalf of Energinet.dk, Copenhagen Economics has investigated whether these actions may harm Danish consumers due to higher spot prices and price volatility, and may benefit Swedish consumers due to lower spot prices and lower costs of network management.

Overall, we confirm that the actions of Svenska Kraftnät led to large-scale losses for Danish consumers and to significant gains for Swedish consumers. We show, conservatively, that Danish consumers experience economic losses arising from higher spot prices estimated to be at least 725 million DKK. We also show that Swedish consumers experience economic gains due to lower costs of network management. We estimate the gain (avoided costs) passed-on to Swedish consumers to be 215-265 million DKK.

The report can be downloaded here
For further information you can contact Claus Kastberg Nielsen