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Transmission capacity is a classic example of a neat economics problem.

If there was a benevolent dictator making ideal decisions, they would build enough transmission capacity to minimize generation+transmission costs while still serving all users in the country.

However, if there is a private company building a transmission line, they have an incentive to under-build capacity to maximize their profits - since if they overbuild, then the price in all the regions is identical, and their profits by transporting energy are nil.

Yet, due to the nature of transmission lines, it doesn't make sense for 50 companies to build 50 independent transmission lines on the same route to compete on transmission pricing - the total cost of fifty 1 megawatt lines is far higher than one 50 megawatt line.

It's a good example of an economics problem where the free/restricted market doesn't work anywhere near as well as the benevolent dictator model.

There are lots of similar problems - for example shipping goods from a place where they are less valuable to a place they are more valuable.

There has been massive investments into transmission capacity in Sweden. The capacity has not increased that much though. One of the reasons are that nuclear power plants have been closed. Large turbines contributes to an increased transmission capacity. All the big investments have been necessary just to ensure that the capacity doesn't get lowered due to the closing of the nuclear plants.

"If I was from Norway or Sweden I would demand the national grid to massively invest into the transmission lines to make all the electricity produced in the country actually usable anywhere in the country. " That would be fine if it was only about prices in the country. But due to the way the EU agreement works, higher capacity transmission lines only means that more electricity will be exported and more of those countries would suffer. Norway currently exports more than the surplus. With higher internal transmission capacity Norway would export even more. Which will have to be imported from EU comes winter, at prices which have already closed a LOT of businesses in Norway.

> higher capacity transmission lines only means that more electricity will be exported and more of those countries would suffer.

Build better transmission within the country but not between countries. The transmission lines between countries is how you limit how much electricity you can trade with other countries.

I do not think that effective transfer of energy from the north to the south would matter much. The price in the energy market is set by the actor willing to pay the most at any given moment.

If energy from the north was enough to influence the German or British prices then maybe, otherwise it wouldn't really matter.