Vannkraft Oest, a Norwegian utility, says that higher electricity prices are necessary to make a planned hydro power development in central Norway’s Oevre Otta watershed profitable. The project, estimated to cost US$101.5-112.7M, could be axed if power prices linger below 130 Norwegian crowns per megawatt hour. Norway produces virtually all of its electricity from hydroelectric power.

An initial plan to expand annual hydro power capacity in Oevre Otta by 1069GWh was scaled down by 50% due to strong opposition from environmentalists aiming to protect the mountain watercourse from further development. Power companies Tafjord Kraft and Opplandsraft, owners of the project, revised their plan in line with recommendations from parliament last year and had resubmitted a required concession to authorities in February. Approval of the project is expected by early next summer so that construction of one of two planned hydro power stations can start by 2005, depending on power prices.

Construction of the project must begin before five years from the date a licence has been granted, otherwise the concession becomes obsolete