Right, so here is one example of what happens in southern Sweden and why prices are pushed up. This is an example to show how the mechanics work.
Sweden is divided into four price regions for electricity, SE1..4 from north to south.
Demand for power in SE4 (most south) comes from domestic use, and from export from SE4 to Denmark, Germany, Poland (typically, flows can also reverse).
The most expensive supplier sets the current price. Let's say domestic supply is 2 GW. Domestic demand is 1.7 GW and export demand (Denmark, Germany, Poland) is 0.7 GW.
The missing supply is solved by importing from Lithuania to SE4 (1.7 + 0.7 - 2 = importing 0.4 GW); this becomes the most expensive power supplied at this instant and sets the current electricity price in SE4 for domestic users and for those that receive the export. (So we have cheap Swedish electricity for the most part, but the expensive Lithuanian production sets the price in this example.)
In this way, SE4 has enough domestic supply to cover domestic demand. Imports are smaller than exports, but the imports still push up the price for everyone.
Note that import/exports are both on the synchronous grids where applicable as well as using HVDC connections.
Sweden is divided into four price regions for electricity, SE1..4 from north to south.
Demand for power in SE4 (most south) comes from domestic use, and from export from SE4 to Denmark, Germany, Poland (typically, flows can also reverse).
The most expensive supplier sets the current price. Let's say domestic supply is 2 GW. Domestic demand is 1.7 GW and export demand (Denmark, Germany, Poland) is 0.7 GW.
The missing supply is solved by importing from Lithuania to SE4 (1.7 + 0.7 - 2 = importing 0.4 GW); this becomes the most expensive power supplied at this instant and sets the current electricity price in SE4 for domestic users and for those that receive the export. (So we have cheap Swedish electricity for the most part, but the expensive Lithuanian production sets the price in this example.)
In this way, SE4 has enough domestic supply to cover domestic demand. Imports are smaller than exports, but the imports still push up the price for everyone.
Note that import/exports are both on the synchronous grids where applicable as well as using HVDC connections.