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Alvøen is one of the oldest industrial places in Norway. As early as the 1620s a gunpowder mill was built here. The place itself was well situated for industrial activity, lying only 100 m from the waterfall, which provided power for the mill, and a good harbour wherefrom the products were shipped. The success of the gun-powder mill varied in the 1600s and 1700s, but what made Alvøen best known was its paper production.
Today Tyssedal appears like a classical industrial community, a picture of modern Norway from the turn of the former century until today. A/S Tyssefaldene was established in 1906, and on 1 May 1908 Tyssedal power station was put into operation. The work on the first stage of the facility was completed in a short time, with a work force of 500 men. They built water tunnels, regulation reservoirs, power station, penstocks, harbour, cableways, office buildings, houses and 6 km of power lines in the wild mountains above Odda to provide the new melting plant with power.