This paper highlights the possibilities and limitations of investing in energy storage for use at distribution level under the existing regulatory framework in Sweden. The paper further gives a brief overview of possible applications and ownership models for energy storage in a distribution grid. It was concluded that it is allowed for a network operator to own an energy-storage installation; there are however restrictions in the use of the installation for trade in electricity. A general observation from the study was that there are uncertainties in the interpretation of the laws and regulations due to the complete absence of experience in the use of grid-size energy storage.