Energy sobriety | Hydro-Québec wants to increase its subsidies for heat pumps

(Quebec) The Minister of the Economy, Pierre Fitzgibbon, wants Quebecers to turn to energy sobriety, and Hydro-Quebec has a solution: it proposes to him to change the law to allow him to subsidize more efficient technologies such as heat pumps and geothermal energy, which is currently impossible due to overly strict profitability rules.

The Legault government has asserted its intention to table a “robust” bill on energy sobriety in 2023. The objective of the new Minister of Energy: to tackle an energy saving potential estimated by Hydro-Québec at nearly 24.5 TWh, equivalent to nearly three times the Romaine complex. This is, in the “short term”, its main “renewable energy source” to meet Quebec’s needs in 2050, which it estimates at 100 TWh.

The state company has its own target, set at 8.2 TWh by 2029, but it will have to save a lot more to meet Mr. Fitzgibbon’s expectations, and is banking on carrots to achieve it. In particular, it wishes to improve its subsidy programs to allow consumers to save energy, through heat pumps, geothermal energy or heat accumulators, which reduce electricity demand during peak periods. consumption.

“More energy efficiency”

But to get there, the lock of the Régie de l’énergie, which analyzes these programs from a strict “economic” point of view, would have to be broken, pleads the state company, which wants the notion of “energy transition » is added in the calculation. Rather, these initiatives should be compared to the cost of building wind turbines or new dams, with the electricity transmission costs they generate, it is argued.

“We would have leeway to provide greater financial support, to reach greater potential than we had in mind. If we arrived at a situation that gives greater latitude to be more aggressive in financial support, that could result in more energy efficiency,” notes Frédérik Aucoin, Head, Market Development and Energy Expertise, at Hydro-Québec. .

For example, a thermal accumulator system costs nearly $17,000 to install, but Hydro-Québec provides financial support of $10,000, he explains.

By giving a little more money, she could convince more people to adopt this technology.

In the residential, commercial and institutional sectors, the savings potential is 6.8 TWh for heating alone, according to a Technosim study commissioned by Hydro-Québec in 2021.

A price increase would help

According to expert Pierre-Olivier Pineau, holder of the Chair in Energy Sector Management and professor at HEC Montréal, the carrot will not be enough. “Yes, the Régie must take into account the objectives of the transition, but we must also get away from the idea that subsidies are always necessary,” he says in an interview. Mr. Pineau applauds Minister Fitzgibbon’s desire to do more to save our electricity. “We can do much better, and we know that would enrich us,” he said.

In his State of Energy, he shows that Quebecers are more greedy than Swedes and Norwegians.

But Mr. Pineau believes that current electricity pricing is too low to allow behavioral changes. The cheaper electricity is, the less profitable it is to invest in expensive technologies such as geothermal energy.

The first step, according to him: put an end to “cross-subsidization”, a measure that currently means that commercial and industrial consumers in Quebec partially subsidize the electricity of residential consumers. This would cause the latter to increase prices by 10 to 15%, which could be spread over a few years. “It’s not true that the majority of Quebecers need to be subsidized for their consumption. If we want to protect the poorest 40%, we can give them checks, ”he drops.

A real debate

But before modifying the electricity rates and the subsidies that Hydro-Québec may or may not give, the consumer defense associations want a real debate. Jocelyn B. Allard, president of the Quebec Association of Industrial Electricity Consumers, militates in favor of an end to cross-subsidization and opposes Hydro-Québec’s proposal.

According to him, it is not up to customers to subsidize other customers who pay for a new heat pump from their electricity bill. If Quebec, to achieve climate goals, wants to make these choices, it must subsidize them with taxpayers’ money, he says. As for the effort that will be required of manufacturers — studies commissioned by Hydro-Québec show that large industries could save 9.5 TWh, compared to 5.6 TWh for all residential customers in Quebec —, Jocelyn B. Allard says government assistance will be needed.

“Changing the light bulbs, caulking the windows, it was done by the big companies. When it was easy and relatively accessible, it was done. There, we touch on the industrial process and we need support, ”he said.

On the side of Option consommateurs, which closely follows the issue of energy prices, Sylvie De Bellefeuille, lawyer and budget advisor to the organization, has doubts. “Electricity tariffs should not become an indirect and regressive tax, because not everyone can afford to pay for electricity. »