Baltic Cable is 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 either the price on the electricity market or 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, although the company is not allowed to charge transmission tariffs.