With its “Action Plan 2035. Towards a decarbonized and prosperous Quebec”, fully aligned with the needs of the energy transition, Quebec openly displays its desire to be in the leading pack of States launched in the great global battle of green economies.
It is therefore a promising plan for Quebec, at a time when several experts are announcing that the great economic powers of tomorrow will be those which will succeed in distinguishing themselves with an economy without net greenhouse gas emissions responsible for climate disruption.
The plan first impresses with the addition of electricity production capacity. Hydro-Québec already considered the addition of more than 4,000 megawatts of capacity between 2005 and today to be a remarkable achievement. However, within 12 years, we want to add more than double, or 9,000 megawatts. These additions will require 5,000 kilometers of transmission lines. It’s very ambitious.
Focus on wind power
Wind power appears to be the big winner of this plan, with an addition of 10,000 megawatts, or 2.5 times the current capacity. Hydro-Québec even intends to explore offshore wind power, an energy already anchored in Europe, but which is currently having difficulty establishing itself in America in a context of difficulties in supply chains, increases in interest rates and inflation.
Hydro-Québec demonstrates its seriousness in energy efficiency with 21 terawatt hours of targeted savings over 12 years. This is considerable: we are talking about a quantity of energy equivalent to twice the export contract to New York. In this matter, we move from appeals to the virtue of citizens, often without major impact, to concrete actions to truly release more useful energy for other needs.
The state-owned company also understood the message sent in December 2022 by the Auditor General of Quebec regarding the state of its network. Its performance in terms of the number and duration of outages is in fact declining, a troubling fact when we know the extreme importance of electricity in Quebec, which is used for heating.
Another novelty of this plan: for the first time, Hydro will launch into one of the most promising options in terms of storing pumped reserves. This technology is in vogue at the moment to compensate for the intermittency of solar and wind energy. It is now established as a necessary solution, particularly because batteries can only store energy for a few hours, which is insufficient to manage a network which has needs to cover over much longer periods.
Having become the new “queen” of energy, according to the International Energy Agency, Hydro-Québec is finally embracing the solar sector, previously considered uninteresting due to the fact that it cannot contribute during peak periods. The state-owned company will promote its penetration into tens of thousands of residences. In a new world where every kilowatt hour counts, this contribution will certainly be less strategic than wind power, but it will be beneficial.
Who will pay the bill?
However, there are concerns after the announcement of this plan. With at least a tripling of its investments to cope with these major projects, Hydro’s expenses should explode. Without a doubt, this will have an impact on prices. Even if we indicate that we want to limit inflation increases for the residential sector, it is clear that the money will not fall from the sky. When this plan is announced, Hydro-Québec’s commercial and industrial customers will be right to question themselves.
In this regard, it appears clear that the Quebec government will have to be much less demanding regarding the annual dividend required of its state corporation. The company will need its net profits to make all its major investments.
Likewise, as we know, these projects will require a vast quantity of labor, which Hydro-Québec estimates at 35,000 construction-related workers. Other economic sectors will certainly ask themselves the question of possible competition from the projects of the state company, a deep-pocketed company, to the detriment of other activities.
Finally, how will communities react to all these projects which will greatly modify the landscape? The question of social acceptability will be at the heart of numerous works throughout Quebec. For Indigenous people, Quebec is innovating with a concessional financing offer, therefore advantageous, for direct participation in the infrastructure to be put in place.
These are no small challenges. But they are promising for the future, and they respond to the great challenge of our time, the climate issue. With this plan, Quebec indicates that it intends to take its responsibilities. Better still, it aims to become a leading player in this field.