Strategic development of the Swedish RTU market

Sweden’s energy sector is undergoing its most significant structural transformation since the large-scale expansion of hydropower and the creation of regional grids in the mid-20th century. As Managing Director for Sweden at Netcontrol, observing this shift is not merely about tracking sales figures. It is about understanding the intersection of aging physical assets, increasingly assertive digital regulation, and a fundamental redefinition of how electricity distribution works.

The RTU — Remote Terminal Unit — has evolved from a modest telemetry device into a critical intelligence layer of the modern power grid. This transition is defined by a paradoxical tension: on one hand, the historic expectation of a 50-year lifecycle; on the other, the rapid pace of digital obsolescence and escalating cyber threats.

Discover Netcontrol’s RTU solutions: https://www.netcontrol.com/products/substation-network-automation/

Market analysis and the foundation of modernization

Any meaningful assessment of the Swedish market must begin with the current state of infrastructure. A significant share of regional and distribution networks was built between the late 1960s and early 1980s. Many substations are now approximately 50 years old and approaching both their technical and economic end-of-life. This creates a sustained, high-volume replacement market that forms the structural backbone of the RTU sector.

Replacement, however, is no longer a simple “like-for-like” exchange. Electrification across society demands a level of visibility and controllability that was not required in an era of centralized and predictable generation.

Sweden’s target of achieving net-zero emissions by 2045 has accelerated the deployment of renewable and variable energy sources. In 2024, more than 41,000 new solar installations were connected to the Swedish grid, adding nearly 850 MW of capacity. Although the residential segment slowed compared to the record year 2023, total installed solar capacity reached 4,808.4 MW, largely consisting of small, distributed systems.

At the same time, wind power continues to play a strong role in generation despite permitting challenges. Together, solar and wind accounted for more than 26% of Sweden’s electricity production during the first three quarters of 2025. This distributed production structure compels distribution system operators to fundamentally rethink how they manage their networks.

Key drivers of grid investment

The Swedish market is shaped by multiple forces, ranging from technical end-of-life replacements to strategic resilience requirements. These can be grouped into three primary investment triggers.

1. Construction of entirely new substations
   This is particularly prominent in northern Sweden and industrial hubs such as Gothenburg, where new electricity-intensive operations, including green steel production, data centers, and battery manufacturing, require significant grid reinforcement. For example, Vattenfall Eldistribution is implementing extensive regional grid upgrades in Västra Götaland and Norrbotten to meet industrial growth demands.
2. Systematic renewal of the asset base
   As RTUs, protection relays, and intelligent electronic devices reach end-of-life, utilities must decide whether to replace individual components or invest in an entirely new technological platform. Increasingly, protection and control systems are renewed as complete architectures to ensure protocol compatibility and cyber resilience. This means a transition from traditional serial protocols toward standards such as IEC 61850 and IEC 60870-5-104.
3. Regulation-driven grid automation
   The majority of outages occur at the medium-voltage level. Sweden’s regulatory framework, which penalizes utilities for interruptions through SAIDI and SAIFI metrics, makes medium-voltage monitoring a necessity rather than an option. Intelligent RTUs, such as Netcon 200 and Netcon 500, enable fault detection and remote switching, supporting the implementation of self-healing grids.

50 years vs. digital reality

The most significant long-term risk is the so called lifecycle paradox. Traditionally, Swedish engineers have designed substations with a 50-year horizon. In contrast, the lifecycle of digital systems, software, cybersecurity standards, and communication protocols, is often less than ten years.

Customers are concerned about misinvestment: multi-million-euro solutions that risk technological isolation or regulatory non-compliance at the moment of commissioning. The market is gradually bifurcating: intense price pressure is directed at base hardware, while value shifts toward software-defined solutions offering cloud integration and remote upgradability.

Cybersecurity law and regulatory pressure

Sweden’s Cybersecurity Act (Cybersäkerhetslagen), implementing the EU’s NIS2 Directive, entered into force in January 2026. Cybersecurity is no longer best practice; it is a statutory obligation.

Key implications for the energy sector include:

• Executive-level accountability and mandatory cybersecurity training
• Security requirements throughout the supply chain
• Mandatory incident reporting within 24 hours
• Technical compliance with standards such as IEC 62443

Customers are concerned about administrative burden and unintended investments. Therefore, our message cannot be limited to hardware performance. We must position ourselves as a lifecycle partner, like we do with our ONE service.

The customers

In Sweden, our customer landscape is nuanced rather than uniform. We typically engage with three distinct roles, each guided by its own priorities and success criteria.

Engineers and contractors tend to value practicality above all: solutions must be intuitive, reliable in the field, and backed by responsive technical support. Utilities, in turn, take a longer view. Their focus lies in future-proofing the grid, ensuring regulatory compliance, and making investment decisions that remain sound over decades. Procurement organizations and consultants approach the same projects from a commercial perspective, placing emphasis on pricing structures, contractual clarity, and risk allocation.

Within larger organizations, price-driven decision-making remains one of the central challenges. Procurement processes often concentrate on unit price rather than total cost of ownership, even though lifecycle costs ultimately define the true economic outcome.

Netcontrol’s brand position in Sweden is strong. Small and medium-sized utilities, in particular, appreciate our local presence, Swedish-language support, and consistency in delivery. A Swedish identity in sales and customer support is not merely symbolic, it is recognized as a tangible competitive advantage grounded in accessibility, trust, and accountability.

Labor shortage

The energy transition is constrained by a shortage of engineers. Large-scale investments by major industry players absorb much of the available expertise, leaving smaller utilities resource-constrained.

For Netcontrol, this represents an opportunity. By offering managed services and easy-to-deploy RTU solutions, we can act as a force multiplier, enabling customers to achieve more with limited internal resources.

Vision for 2030

By 2030, the substation will be modular, intelligent, and environmentally optimized. Digital twins and AI-driven analytics will enable real-time monitoring and predictive maintenance. The RTU will function as the primary data source for these systems.

Devices must evolve from passive data transmitters into active edge computing units.

Sustainability will move to the forefront. Reusability, energy efficiency, and ease of refurbishment will become decisive competitive factors.

The roadmap

The Swedish RTU market is demanding and rapidly evolving. To succeed, we must strengthen our position as a quality leader and establish ourselves as a trusted compliance partner in the NIS2 environment. At the same time, we need to provide comprehensive services that help customers address the labor shortage and shift the commercial dialogue from unit pricing to total lifecycle cost.

Netcontrol’s strength lies in its ability to combine technology, cybersecurity, and lifecycle services into one integrated offering. With the ONE service, we can concretely demonstrate compliance and provide customers with transparent visibility into asset status, updates, and lifecycle management. ONE serves as a verifiable platform that supports compliance and strengthens our customers’ ability to manage risk systematically.

The energy transition is accelerating. The electricity grid is becoming smarter, more decentralized, and more complex from a cybersecurity perspective. Netcontrol is uniquely positioned to act as a lifecycle partner for Swedish utilities throughout this transformation, not merely as a device and system supplier, but as a partner ensuring security, performance, and compliance across the entire lifecycle of the grid.

Discover Netcontrol’s RTU solutions:

https://www.netcontrol.com/products/substation-network-automation/

Author

Örjan Eriksson is the Managing Director of Netcontrol AB, and is responsible for the company’s Swedish operations and sales. He joined the company in 2011, and has a strong background as a systems developer and electrical engineer, with a focus on leadership, sales management, service sales development and system sales.