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That predates the discovery of oil. A significant portion of the major hydroelectric power plants were built around 1910. We didn't have much coal, but our country looks like this:

http://upload.wikimedia.org/wikipedia/commons/9/98/Odda_frå_...

The town on the picture (Odda, Hordaland) was a major center of industry, thanks to the cheap power.

That's mostly because we have the opportunity to run hydroelectric plants very easily, with all our mountains and water.

You know, you could say the same about lots of other countries and they don't do it, they invest in highways and other kinds of waste. Think of my home country, Portugal: we have mountains and rivers everywhere, we have the ocean, we have Europe's most dry land (Alentejo) and how much of our energy is renewable? 45%. And in 2005 it was around 15%. It could have been like Norway since the nineties...

New Zealand is similar - the majority of electricity generation is hydro. We're similar in that we have a lot of mountains and a small population.