Court ruling paves way for future investments in Swedish electricity supply

A majority of Sweden’s electricity network companies appealed the Swedish Energy Markets Inspectorate’s (Ei) decision on how large the companies’ revenues are permitted to be. The matter has now been settled in the Administrative Court – which has ruled in favour of the network companies. The provisions of the revenue framework ordinance are in violation of the Electricity Act and the third electricity market directive.

- This is a balanced ruling that respects the interests of both electricity consumers and electricity network companies, notes David Bjurhall, Head of Regulation at Ellevio.

Today’s ruling from the Administrative Court means the court has assessed that Ei’s decision did not follow current practice in terms of how network companies’ revenue frameworks are established. The ruling also states that the authority’s independence was circumvented, based on the descriptions contained in the EU’s electricity market directive.

For network companies, this represents a step in the right direction in terms of having a reasonable chance of making the investments required to safeguard future electricity supply and achieve climate targets.

- We take our role in the climate transition very seriously. While politicians set the targets, it is up to us to achieve them. This will require extensive investment in the electricity network, and the court’s decision supports us in that regard, adds Bjurhall.

Extensive digitalisation ahead

Sweden is in the midst of extensive development. Extensive digitalisation and swift technical development is paralleled by an urgent climate transition. Sweden is to be the world’s first fossil-free welfare nation. By 2030, emissions from transportation are to fall by as much as 70 percent, and the country is to achieve net-zero emissions by 2045. By that point, Swedish basic industry aims to be electrified, posing an enormous challenge for electricity distribution.

- If we as an electricity network company are to deliver on the climate targets, we quite simply have to have reasonable conditions for investing in the networks. It is vital for us to have long-term, stable rules in place, Bjurhall explains.

Achieving climate and energy targets by building and restoring critical infrastructure entails major costs. Ellevio alone is looking at investments in the electricity network of as much as SEK 100 billion by 2045.

- If we fail to maintain and invest in the electricity networks, costs will end up being even higher. If we neglect the electricity network, not only will the political vision collapse, but so will our ability to tackle both climate challenges and modern society’s growing energy demands, concludes Bjurhall.

FOR FURTHER INFORMATION

Jesper Liveröd, Head of Media, +46 70 92 99 623, jesper.liverod@ellevio.se