Electricity was very present in the electoral campaign. The CAQ spoke of the rapid construction of dams. The PLQ dreamed of a massive green hydrogen production program. The day after the election, the issue resurfaced, with the reluctance aroused by the passage of the Ministry of Energy under the control of that of the Economy.
Posted yesterday at 1:00 p.m.
It is a great thing that the use of our low-carbon electricity is the subject of public debate. But for it to be successful, you have to ask the right questions. What should our electricity be used for? To what uses and users should it be attributed? According to what criteria? Who should decide?
These are the questions that we addressed in a study by the Institut du Québec, where we proposed a framework and criteria to help us identify the most promising uses, both for decarbonization and for economic development.
But a serene debate must first be based on conclusive facts and complete information. To do this, we must dispel the background noise fed by two myths.
The first is that there would be a shortage of electricity. According to the projections of the experts we consulted, current resources, as well as those that Hydro-Québec can normally add to its generation fleet, will be sufficient to meet needs by the 2050 horizon, even if Hydro-Québec plans that this demand will increase by 50%, or 100 TWh more. The room for maneuver will be even greater if we resolutely tackle the issue of improving energy efficiency.
Remember that the idea of a shortage is circulating because Hydro-Québec’s leeway has been reduced since it devoted 30 of the 40 terawatt hours of its surpluses to two firm export contracts in the United States.
We do not lack electricity, we have chosen to sell it elsewhere.
The second myth is that we sell electricity at a discount to industries. With a production cost of about 2 cents, Hydro-Québec makes money with its industrial rates, to such an extent that we are witnessing a cross-subsidization phenomenon, where profit margins on industrial sales subsidize consumer prices. As for the future, the cost of 11 cents, often mentioned, corresponds neither to current costs nor to the foreseeable cost of new supplies, but rather seems to correspond to the possible cost of future dams, in 20 or 30 years… if they are built. .
The important thing is to remember that with current resources, foreseeable additions, an acceleration of efficiency efforts, and even more so if one of the contracts with the United States falls through, Quebec has electricity needed to decarbonize and ensure economic development if, of course, we show discernment in the choice of industrial projects.
For this, it is necessary to establish a scale of priorities. Clean electricity must first be used to achieve decarbonization targets.
Because of the intrinsic importance of the issue, and also because the Legault government’s Plan for a Green Economy relies heavily on green electricity to reduce GHGs. We cannot both bet on Hydro-Québec for decarbonization and not make this decarbonization a priority for the government corporation!
Next, the allocation of electricity resources intended for economic development must be part of a strategic framework, which does not currently exist. This explains, for example, why so many resources have been allocated to exports, when these have an insignificant impact on economic growth, compared to the transformation of electricity in Quebec.
This framework, for new projects, must go beyond the scale of the investments or the immediate impact on economic indicators, and must take into account the added value and the factors that will strengthen the potential of the economy of Quebec and will support its efforts to raise the standard of living.
This strategic framework, with objectives and criteria, would protect our decision-makers from passing fads. Think of blockchains, data centers, mass production of hydrogen, which we have seen for some time as the paths of the future for electricity.
It would also protect us from the temptation to headlong.
Our electrical potential is not a candy dish. Resources are limited.
A multiplication of projects could force us to build dams which we would not otherwise need and could not be qualified as profitable collective investment.
The same logic should apply to decarbonization. There too, there are more promising uses, which further support Quebec’s ability to reach its GHG reduction targets.
The development of such a strategic framework could finally play a role as a safeguard to mitigate the governance problem caused by the passage of Hydro-Québec under the control of the Ministry of the Economy. There would be less concern if Quebec adopted guidelines, that is, clear priorities and a vision that would govern the use of this precious resource, electricity.