Baltic Cable is a key part of the infrastructure that links together Europe’s electricity grids. It is a 250 km long high-voltage direct current (HVDC) submarine cable that transmits electricity between the converter stations in Kruseberg, Sweden, and Herrenwyk, Germany. There are several interconnections between Sweden and other countries in the form of submarine cables, most of which are partly owned by Svenska kraftnät. Baltic Cable is currently the only interconnector between Germany and Sweden. 

Since 2010, Baltic Cable AB is a wholly owned subsidiary of the Norwegian state-owned company Statkraft. 

Baltic Cable is certified in Germany as a TSO under the ITO unbundling model, which sets strict requirements for the separation between the activities of Baltic Cable AB and Statkraft Group. This entails that Statkraft Group has no direct or indirect influence on, or insights into, the day-to-day business of Baltic Cable AB or the operation of the Baltic Cable interconnector. 

Baltic Cable cannot influence the price on the electricity market, nor the demand for capacity in the cable. Congestion income is its only source of income; Baltic Cable therefore does not charge tariffs or other fees. Congestion income/revenue arise when the electricity price in the area where the power is produced is lower than in the area where it is consumed. The difference, known as the congestion income, goes to the company transmitting the electricity.  

In other words, it is the market – via the European power exchanges – that determines when the cable is used, how much of its capacity is utilized, and thus the size of the congestion revenues, which ultimately also depend on the price differences between various bidding zones, just as within Sweden. However, how these income/revenues may be used and how much profit Baltic Cable is allowed to make is determined by the relevant regulatory authority.  

Baltic Cable receives congestion revenues/income when the cable is in use. How the company may use these revenues to cover operating costs, investments, and make a reasonable return is regulated by the regulatory authority. This means that the regulator determines how much profit Baltic Cable may make, in a similar way to how Sweden’s power grids are regulated. This allowance does not change even if congestion income/revenues increase. The company does not have free access to all congestion revenues.  

Ultimately, EU law governs how the electricity market in the EU must function. Baltic Cable AB is classified as a TSO (Transmission System Operator) just like the connecting parties Svenska kraftnät and Tennet TSO GmbH. However, Baltic Cable does not apply tariffs, as it does not have any customers. 

Baltic Cable has a nominal interconnection capacity of 615 MW and operates at 450 kV and 1364 A, with a minimum flow of 50 MW. As opposed to the majority of the electricity network including household connections, it operates at direct current (DC), meaning that the electric current flows in only one direction with a constant polarity.  

The capacity is adjusted with a certain delay, with a power change rate of 30 MW per minute. As with all cables, some losses occur during transmission. The HVDC technology allows for relatively low losses, with approximately 2.4 percent with the converter stations included.  The cable is a double-armoured, single-core submarine cable with a total length of 250 km.  

Baltic Cable provides flexible capacity when needed, helping to secure electricity supply and reduce the risk of disconnection of energy markets due to capacity shortages. It supports society’s electrification and the clean transition. The basic idea is that EU countries should cooperate – including in the field of energy. The EU places great emphasis on creating reliable and interconnected power grids.  

Baltic Cable helps mitigate the uncertainty and intermittency associated with renewable sources such as solar and wind. Most of the time, electricity is exported from Sweden to Germany, but the exchange goes both ways. Given the increasing amount renewable energy in Germany, Sweden frequently imports electricity from Germany during periods of high solar and/or wind production.  

At the exact moment when Baltic Cable would cease to operate, the loss of capacity would need to be balanced immediately. Production and/or consumption in the balancing markets of Germany, Sweden, and/or neighbouring countries would be redispatched at once to compensate. 

In the longer term, the electricity market would need to adapt to new conditions, affecting the use of transmission capacities across the region and, in turn, influencing prices. The Nordics would still be connected to continental Europe through a great number of interconnectors between Norway/Sweden/Denmark/Finland and Great Britain/Netherlands/Germany/Poland/Estonia/Lithuania, which in turn are connected to the rest of Europe. Therefore, energy would still flow, at least indirectly, also between Germany and Sweden. The overall capability of the common market to integrate different parts of Europe would weaken and during times with strained energy systems either in Sweden, Germany or some other connected country, the capacity available to remedy such challenges would be scarcer.  

Baltic Cable is built on one of the EU’s core principles: the internal market for trade and exchange between member states. Electricity trading occurs in both directions, facilitating more efficient energy production, contributing to a secure power supply and reducing the risk of disconnection. Both Germany and Sweden rely on trade and cooperation between European countries – including in energy. Ultimately, all consumers benefit from a well-functioning EU energy market.