Sweden’s power sector is set for further expansion driven by renewables, supported by industrial electrification, green hydrogen development, battery manufacturing, data centres and continued investment in wind power. However, transmission constraints between northern Sweden – which has abundant generation capacity – and demand centres in the south risk limiting the value of new capacity and widening regional differences in electricity prices, according to GlobalData, a leading intelligence and productivity platform.
GlobalData’s latest report, “Sweden Power Market Trends and Analysis by Capacity, Generation, Transmission, Distribution, Regulations, Key Players and Forecast to 2035,” reveals that the country’s installed power capacity will grow at a compound annual growth rate (CAGR) of 2.9 per cent between 2025 and 2035. Renewable technologies will account for an increasing share of the national power generation mix, led by wind power and solar PV, whilst hydro and nuclear continue to provide the reliable, low-carbon generation base that underpins the system.
Attaurrahman Ojindaram Saibasan, Power Analyst at GlobalData, comments: “Sweden is in a strong position, with hydro and nuclear power providing a largely fossil-free electricity base and wind power accounting for much of the incremental growth. The next phase of the market will be shaped as much by demand as by supply. New electricity-intensive industrial projects, including fossil-free steel production, battery manufacturing, hydrogen production and data centres, are increasing the importance of a reliable power supply in the areas where demand is emerging.”
The main challenge is geographical. Sweden’s northern bidding zones have substantial hydroelectric and wind resources, whilst much of the country’s population, industrial demand and electricity consumption is concentrated in the south. Limited north-to-south transmission capacity can cause congestion, restrict renewable generation and leave southern consumers exposed to higher prices despite a national electricity surplus.
Saibasan adds: “Investment in the grid is a critical enabler of Sweden’s energy transition. Without faster delivery of transmission upgrades, surpluses of clean energy in the north may be curtailed or exported, whilst industrial users in the south face tighter supply and greater price volatility. Svenska kraftnät’s transmission expansion plans will therefore be just as important as investment in generation in determining whether Sweden can convert its resource advantage into reliable, competitively priced electricity.”
Offshore wind represents a major long-term opportunity, although project delivery depends on progress in maritime spatial planning, defence approvals, environmental assessments, seabed access and grid connection arrangements. Onshore wind and solar PV will also continue to play an important role in expanding supply, particularly where projects can secure viable connection capacity and long-term offtake agreements.
Sweden’s policy framework supports a fossil-free electricity system and economy-wide net-zero emissions, whilst the planned phasing out of the electricity certificate scheme is changing the support landscape for new renewable projects. At the same time, the government’s nuclear roadmap signals a renewed role for nuclear generation as a source of long-duration, firm, low-carbon capacity.
Saibasan concludes: “Sweden has the generation resources, industrial demand base and market structure to remain one of Europe’s most important clean power markets. Realising that potential will require coordinated decisions on planning permission, grid reinforcement, offshore wind development and the financing framework for new nuclear capacity. The policy challenge is not simply to add more capacity, but to ensure that clean electricity can reach consumers when and where it is needed.”
