EXPLAINED: Norway's divisive decision to connect a gas plant to the power grid

The Norwegian government has given the green light to plans to connect the Hammerfest liquified natural gas plant on the island of Melkøya in northern Norway to the local energy grid. 

The measure could cut up to two percent of Norway's total annual emissions, according to plant operator Equinor. The plan involves shutting down a gas plant that powers the facility and replacing it with energy from the grid. 

Electricity supplied from the grid would be much cleaner than energy from the gas plant because the vast majority of Norway's power needs are met by renewable sources. 

"This is an important day for building industry and creating jobs in northern Norway, and for the climate," Norway's Prime Minister Jonas Gahr Støre told a news conference held in front of the plant in Arctic Norway.

The planned power switch will take place in 2030. Equinor and its partners will invest 13.2 billion kroner to electrify Melkøya. The facility at Melkøya can deliver 6.5 billion cubic metres (bcm) of gas per year, enough to power about 6.5 million homes. By electrifying and upgrading the plant, it could remain in operation until 2040. 

Plans to electrify Melkøya have been met with heavy opposition. Norway's parliament had previously asked the government to explore other options, such as carbon capture storage at the plant. This would involve capturing emissions and storing them permanently under the ground at the site.    

To prevent Melkøya from using all the energy in the region, the government has planned a large-scale expansion of the power grid in Finnmark. 

Several wind projects in the region have also received licences to meet the power demands of the electrification. However, issuing licences for new projects to expand energy capacity in the north typically conflicts with the interest of reindeer herders. 

"The problem is that many of the wind power projects for which a licence has been applied for are located in areas with reindeer herding. So it will be full of conflict and not entirely easy to carry out," Olav Botnen at Volt Power Analytics told Norwegian financial newspaper Dagens Næringsliv (DN). 

Norway's government has been in several disputes with reindeer herders over the development of energy projects. In 2021, the Norwegian government lost in the Supreme Court after it was ruled that the Fosen wind farms in central Norway encroached on the rights of indigenous Sami reindeer herders. 

The court ruled that the wind farms, which disrupted reindeer herding, violated the International Covenant on Civil and Political Rights. It said that traditional Sami reindeer herding is a protected cultural practice. Despite the ruling, the Norwegian government has not announced plans to remove the wind turbines deemed illegal. 

The Sami Parliament has condemned the government's decision to electrify Melkøya.  

"It is completely unacceptable that the government announces the electrification of Melkøya in this way. Such a decision shows that the government is setting aside all promises about consideration for Sami rights holders. The promise of strengthened dialogue with the Sami Parliament also seems to be empty words," Sami Parliament president Silje Karine Muotka said. 

Locally, the plan could also push up energy prices for households. This is because energy analysts predict it will be difficult to develop enough power to electrify the plant. 

This means supply could struggle to keep pace with demand. Northern Norway, generally, sees the lowest energy prices in the country as it produces far more power than it needs. 

There are also concerns that other green energy projects may find it hard to get off the ground as priority will be given to meeting Melkøya's energy needs.