Yes, you need a quicker power source to balance, and Sweden got that with the hydro power.
The hydro power is not enough as base power for the large cities in the south, on the other hand, in part because in part the capacity is not enough, and in part because how the extremely long transport lines from the far north (where the hydro power is located) to the major cities in the south are a serious bottle-neck. Increasing their capacity (across up to thousands of kilometers) isn't easily done in a few years even.
The thing is though, a lot of heavy industry is built in the North to take advantage of the cheap power there. Shoring up the grid connections would increase the electricity rates in the northern region, due to competition from the South.
The hydro power is not enough as base power for the large cities in the south, on the other hand, in part because in part the capacity is not enough, and in part because how the extremely long transport lines from the far north (where the hydro power is located) to the major cities in the south are a serious bottle-neck. Increasing their capacity (across up to thousands of kilometers) isn't easily done in a few years even.