Norwegian Deputy Minister of Oil and Energy Ane Hansdatter Kismul announced an agreement Wednesday under which state-owned grid operator Statnett will purchase two local Lofoten power producers, thus freeing $160 million in the next seven years to beef up the islands' chronically unstable power supplies.
The move comes after years of complaints of inadequate electric service in the scenic islands north of the Arctic Circle, which intensified after 55,000 residents of the Lofoten and Vesteralen archipelagos were left without for 10 hours March 12 due to a transformer fire in Harstad, Norway.
The islands are renowned for their Viking heritage, 1,000-year-old cod fishery and rugged beauty that has attracted thousands of tourists to its 24-hour summer daylight and dazzling displays of the aurora borealis.
Lofoten has also been the scene of new offshore arctic oil finds, which are estimated at as much as 2 billion barrels.
Kismul cautioned at an appearance in Stokmarknes the agreement for Statnett to buy local power companies Trollfjord Kraft and Lofotkraft hasn't been finalized, but the plans to incorporate them into the national grid have been approved by the energy ministry.
"Their functionality, together with a continuing uncertainty about whether Lofotkraft and Trollfjord Kraft will be able to maintain the security of supplies in the region, has been crucial to this conclusion," she said.
Lofotkraft had earlier launched a $35 million effort to build a new 132-kilovolt main power line from the Kanstadbotnen fjord to Kvitfossen in the municipality of Vagan, a distance of about 40 miles. It is meant to replace a line that was built in 1966.
But the ability of the two small companies to carry out such large-scale projects had been questioned as blackouts in the region have become commonplace.
Saying it is the legal responsibility of transmission system operators to keep the networks working and ensure energy security, Kismul asserted the move is justified.
"In recent years, the Lofoten Islands have had several power outages and associated costs," she said. "Parts of the network have capacity problems and are old. Meanwhile, the weather conditions of the area are demanding.
"There is great uncertainty Lofotkraft and Trollfjord's financial capacity to carry out the large investments that are now necessary."
The issue was brought to the fore in March when the transformer fire plunged 55,000 islanders into darkness, bringing commerce and everyday life in the islands to a standstill.
The blackout brought calls for action from local politicians.
Christian Democratic Party Member of Parliament Kjell Ingolf Ropstad in March demanded to know what Norwegian Energy Minister Ola Borten Moe was going to do to "take action to ensure population and industry in Lofoten and Vesteralen the same energy supply as the rest of the country.
"He believes the responsibility must lie with Statnett, only it seems that Statnett is considering a possible opening for the oil business before considering strengthening the power grid."
Meanwhile, local residents are paying high prices for spotty service, added CDP candidate Ingelin Noresjo.
"When we will we get more in terms of increased security of electricity supply?" she asked. "Lofoten and Vesteralen seem to have one of the worst deals in the country."
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