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IP/09/1425

Brussels, 6 th October 2009

Antitrust: Commission market tests commitments proposed by Svenska Kraftnät concerning Swedish electricity transmission market

The European Commission has invited comments from interested parties on the commitments offered by Svenska Kraftnät (SvK), the Swedish transmission system operator, following the Commission's concerns that SvK might have breached EC Treaty antitrust rules on the abuse of a dominant market position (Article 82). The Commission's concerns relate to the Swedish electricity transmission market, and in particular that SvK is limiting the amount of export transmission capacity available on electricity interconnectors situated along Sweden's borders, with the objective of relieving internal congestion on its network. This would appear to favour consumers in Sweden over consumers in neighbouring EU and EEA Member States by reserving domestically produced electricity for domestic consumption. To alleviate these concerns, SvK has offered to subdivide the Swedish transmission system into two or more bidding zones and to manage congestion in the Swedish transmission system without limiting trading capacity on interconnectors. If the result of the market test is positive, the Commission may adopt a decision under Article 9 of Regulation 1/2003, making the commitments legally binding on SvK.

Competition Commissioner Neelie Kroes commented, “This case is about integrating Europe's energy markets to bring more choice, more competition to keep prices down, better service and improved security of supply. EU consumers will not get these benefits if Transmission System Operators limit export transmission capacity on interconnectors in order to face internal congestion. I am looking forward to hearing the views of all stakeholders on the proposal of Svenska Kraftnät to address congestion on its network through other means.”

The Commission opened a case against SvK in April 2009 (see MEMO/09/191 ). According to its preliminary assessment, the Commission has concerns that SvK might have abused its dominant position on the Swedish electricity transmission market by discriminating between domestic and export electricity transmission services and segmenting the Single Market.

Following detailed discussions, SvK proposed commitments to address the Commission's concerns. In particular, SvK would subdivide the Swedish transmission system into two or more bidding zones and operate it on this basis by 1 July 2011 at the latest. The configuration of the bidding zones would be flexible enough to adapt quickly to changes in the future electricity flow patterns in the Swedish transmission system. Once the bidding zones were operative, SvK would manage congestion in the Swedish transmission system without limiting trading capacity on interconnectors, except for congestion in the West-Coast-Corridor. Svenska Kraftnät has argued that; unlike the other zones of congestion, congestion in the West-Coast-Corridor cannot be managed in an efficient manner through bidding zones and market splitting, because this area does not contain sufficient suitable generation resources to be able to set a market price by itself. However, SvK offered the commitment to alleviate this situation by reinforcing the West-Coast-Corridor section by building and operating a new 400 kV transmission line between Stenkullen and Strömma-Lindome by 30 November 2011.

Until the bidding zones become operative, Svenska Kraftnät offered the commitment to manage internal congestion in the Swedish transmission network through counter trade, as it can be cheaper to make the necessary adjustments in Sweden than in neighbouring countries. This would reduce the limitation of capacity on the interconnectors.

If the market test indicates that interested parties consider the commitments to be a satisfactory solution to increase competition on the Swedish electricity markets, the Commission may adopt a decision under Article 9 of Regulation 1/2003 making the commitments legally binding.

A summary of the commitments proposed by SvK has been published in the EU Official Journal ( C 239/9 of 6 October 2009 ) and the full non-confidential version of the commitments is available on the Europa website on

http://ec.europa.eu/competition/antitrust/cases/index/by_nr_78.html#i39_351

Interested parties can submit comments within one month from the date of publication.


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