Hydroelectric power is not very environmentally friendly either. Like the giant dams of China that destroy the whole ecosystem near the power plant.
Most hydroelectric power in Norway are generated with the help of a reservoir, usually a natural lake that's been regulated with the help of a relatively small dam, but there are some wholly artificial ones as well, the biggest one being 84 square km.
That said, yes - the environmental impact is small. It also helps that the Norwegian population is very small.