OSLO: Norway's main opposition party said on Wednesday it would support the government's plan to adopt European Union energy rules, likely securing the law's passage and allowing the European Union outsider to remain a full member of EU markets.
However, Labour's support may come with the condition that all power cables should be state-owned, raising questions about the future of NorthConnect, a planned 2 billion-euro power cable between Norway and Scotland.
For the past 24 years, Norwegian companies have enjoyed market access on equal terms with companies in the EU via the European Economic Area treaty, in return for the country's adoption of EU common market regulations.
The centre-right minority government feared that rejecting the EU's Third Energy Package, designed to enhance energy flows and improve regulatory oversight, would put Norway on a slippery slope to a Brexit-like ending of its close EU relations.
Norway's parliament is expected to vote on the package on March 22, said a spokesman for the oil and energy ministry.
Trade unions and several centrist and left-wing parties have opposed the regulation, believing Norway could lose control of its abundant hydroelectric resources.
However, the opposition Labour Party, the biggest party in Norway's parliament, said it would back the proposal in return for government guarantees of continued public-sector ownership of most power production and infrastructure.
Under the EEA treaty, Norway retains the right to refuse the adoption of EU rules, but has never done so as this would allow the EU to retaliate by suspending other parts of the agreement.
Norway is working on three cables, two of which are under construction by state-owned grid Statnett and will export electricity to Britain and Germany.
Plans for a third cable to Scotland, called NorthConnect, could come under scrutiny as it is backed by a private consortium consisting of Norway's Agder Energi , Lyse and E-CO as well as Sweden's Vattenfall .
"If this goes through, NorthConnect must be taken over by Statnett or it will be very difficult to realise the project," Leiv Ingve Oerke, Lyse's head of energy business, told Reuters.
Cancelling the 1.4 gigawatt cable will mean all subsidies that European Union so far spent on it will be lost, he added.
Labour is also asking that any decision on a cable built after the first two should be made after they are completed and have been assessed.
Statnett, which in January said NorthConnect should be delayed as it may overburden the existing power infrastructure in the Nordics, declined to comment.
The government did not want to comment on the final outcome of its talks with the opposition, a ministry spokesman said.
(Editing by Gwladys Fouche and David Evans)