1 November 2011 Sweden was divided into four bidding areas. One consequence of this is that the Elspot market at Nord Pool Spot receives all transfer capacity between Swedish bidding areas, as is the case between Norwegian areas. This capacity will be utilized in the price calculation, and there will be a requirement on all parties to have a planned hourly balance per bidding area.
The names of the different areas are from north to south are SE1 (Luleå), SE2 (Sundsvall), SE3 (Stockholm) and SE4 (Malmö). The city names indicate the reference points for the CfD contracts in the financial market.
The decision to divide Sweden into four bidding areas was made by Svenska Kraftnät (SvK) after legally binding commitments from SvK to the European Commission. This is to handle internal congestions in the Swedish transmission grid without moving the internal limitations to the border.
You can find more background information on the four bidding areas at Svenska Kraftnät and Svensk Energi.