Energy community (EC) is a citizen-driven energy initiative that contributes to the clean energy transition within local communities. EC could also contribute positively towards energy security, which is currently a topic of high interest in Europe. Sweden has limited experiences with ECs as compared to many other European countries. This paper, using Multi-Level Perspective (MLP) framework, discuss the challenges and opportunities for establishing ECs in the north of Sweden. The analysis highlights that limited national regulation specific to ECs, and complex concession and taxation rules are barriers to EC implementation. EC development is further constrained in northern Sweden due to relatively lower electricity price, long heating seasons and low solar irradiation affecting economic viability of solar PVs. The landscape development which resulted in new and amended EU directives could facilitate ECs in Sweden. The study concludes that although ECs could provide flexibility and contribute to climate and energy security goals, their wider adoption in high latitude regions requires clearer regulation, targeted financial incentives, adapted business and viable governance models, and stronger institutional support.