This text is part of the special Energy Transition section
Efforts to develop a local and sustainable supply chain in the green energy sector are gaining momentum in Quebec. Such progress is seen as a crucial asset to ensure Quebec’s energy resilience.
In September 2022, the Association of the Electric Industry of Quebec (AIÉQ) launched a first call for interest as part of the PASQÉ project. This aims to build a responsible and competitive supply chain for the electrical industry in Quebec by focusing on productivity and innovation.
Since the construction of the James Bay facilities in the 1970s, Quebec has become a hub for innovation in the electricity sector. “However, cutting-edge technological innovations over the last 20 years have largely taken place in Europe and Asia,” specifies Marie Lapointe, CEO of AIÉQ. Today we must consolidate Quebec’s place as a crossroads of innovation. »
This is all the more important as Quebec is engaged in an energy transition which is largely based on electrification. The demand for equipment aimed at electrifying buildings, transportation and industries is enormous. “It’s like that almost everywhere in the world, so we must secure our supply, in particular by developing our production capacities,” adds the CEO.
The key, according to her, is to prioritize the production of the most sought-after equipment. Of the 5 million dollars from the PASQÉ initiative, 3.75 million will go to support SMEs that want to increase or diversify their manufacturing of products, such as circuit breakers, cables, pylons or even transformers.
The battery industry
It’s hard not to think of electric batteries when you list the popular products. “We have all the assets to bring the entire supply chain of the battery sector back to Quebec,” assures Karim Zaghib, professor at Concordia University, where he directs Volt-Age, the main research program on electrification in Canada.
He recalls that the territory of Quebec contains all the necessary minerals, such as copper, graphite, silicon, aluminum and lithium. Only manganese is missing, which is found in New Brunswick. Hydroelectricity also makes it possible to transform these materials with much greener energy than elsewhere.
The professor adds that we also have sufficient expertise and easy access to several markets thanks to free trade agreements, notably with the United States and the European Union. “All these advantages make it possible to envisage the creation of a stable, green supply chain that respects human rights,” he believes.
Pieces are already in place. From 2025, the Ultium CAM plant in Bécancour will produce battery components for GM. GM and Panasonic have also recently invested in Nouveau Monde Graphite, which is developing a graphite mine in Saint-Michel-des-Saints and a plant to transform the ore into anode material for electric vehicles.
“There is good news; everything is not reduced to the Northvolt project, emphasizes the professor. But it will take time to build such a supply chain. »
The sinews of war
Time…and money. “We will have to make colossal investments to hope to achieve the objectives of the Paris Agreement, and the sector that can most easily be tackled is that of energy,” says Sophie Cousineau, director of sustainable investment at Power Sustainable, a climate-focused alternative fund manager.
Signed in 2015, the Paris Agreement aims to limit global warming to 1.5°C. BloombergNEF estimates that $215 trillion will be needed to completely decarbonize the global energy system by 2050.
According to Sophie Cousineau, this creates business opportunities, particularly in solar and wind power, which are already profitable and where costs continue to fall thanks to increasingly proven technologies. Several investment firms are looking for opportunities to support projects that will accelerate the energy transition.
In Quebec, organizations like Fondaction, Idealist Capital, Cycle Capital or the Canada Growth Fund, among others, are working on it. The latter, created in 2022 by the federal government, but managed independently by the Montreal firm Investissements PSP, is endowed with 15 billion dollars. Its goal is to invest in Canadian companies and projects that help reduce carbon emissions.
Investors are also interested in developing more local supply, in particular to reduce certain risks. Sophie Cousineau gives the example of solar panels, around 80% of the components of which are manufactured in China.
“With rising geopolitical tensions, this creates vulnerabilities in supply, hence the importance of achieving a certain autonomy and independence,” she concludes.
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