Document shows EU countries have scaled back their plan to finance power grids
A document from an internal negotiation revealed that governments 'have reduced the European Union’s proposal to spend national money on 'the bloc's' energy infrastructure' after Sweden threatened to limit power exports due to the plan. This dispute is over a proposed EU legislation to raise money for large energy infrastructure projects like interconnectors. These are necessary to integrate renewable energy sources into the network, and to meet increasing power demand due to data centres and other sources.
In December, the European Commission proposed that 25% of the unused congestion revenue collected by power grid operators be allocated to EU-backed projects.
The EU countries that are negotiating the legal proposal reduced this so that national operators would not be required to pay any congestion revenue collected on power traded within their own country. Their latest compromise proposal shows that.
The draft proposal would also reduce the amount of income from cross-border congestion earmarked for EU backed projects by?10%. This would gradually increase to a?25 percent share in 2030. Plans to reduce funding are raising questions about how cash will be raised for new power projects across borders. In recent years, some of Europe's largest planned power interconnectors have been stalled due to a lack of funding and other concerns.
According to the EU, power grid investment will need to reach EUR1.2 trillion ($1.4 billion) by 2040.
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Grid constraints can prevent electricity from reaching high-demand regions, both within and across borders. This results in significant earnings for network operators. Sweden, an outspoken opponent of the EU plans, collected $3 billion in congestion revenue in 2025.
Stockholm had threatened earlier this year to restrict electricity exports if the EU proposal was approved. Sweden exports surplus power via cables to Germany, Denmark and Finland.
The EU ministers will discuss the proposal and decide on their positions at a meeting scheduled for June 26. They will then negotiate the final legislation with the European parliament.
Cyprus' EU Presidency spokesperson, who drafted the compromise draft, stated that the?draft had already "broad" support among countries. Cyprus would propose "minor tweaks", to ensure approval by a majority next week.
A Swedish official said that the government will continue to work with Cyprus on finding a solution for the issue of congestion revenue.
(source: Reuters)
