This week, Hydro-Québec CEO Michael Sabia criticized in veiled terms the Legault government’s significant allocation of electricity to “new companies.” Since the ministry has been choosing projects that benefit from more than 5 megawatts, who are the lucky ones?
A small fraction of the electrical power blocks of more than 5 megawatts (MW) allocated by the Quebec government since 2023 are aimed at decarbonizing existing industrial activities. The vast majority of selected projects instead consist of building new factories, especially in the battery sector. A choice based on the principle of green growth.
According to a review of the Dutyonly 5 of the 22 high-power connections authorized by the Quebec Ministry of Economy, Innovation and Energy (MEIE) since last year are intended to decarbonize the developers’ current activities. The remaining megawatts — highly coveted due to the scarcity of electricity — are dedicated to the development of new activities.
Battery, bioenergy, green hydrogen: almost all new activities contribute to the global energy transition, which is essential to curbing climate change. However, these megawatts do not directly power Quebec companies that are seeking to reduce greenhouse gas emissions from their current balance sheet, something that Hydro-Québec has made a priority.
On Tuesday, the CEO of the Crown corporation, Michael Sabia, suggested that a better balance needed to be found between decarbonizing Quebec companies and welcoming new projects. “The government has put a lot, a lot of emphasis on new companies,” he said during the study of Bill 69 on the governance of energy resources.
In recent months, Quebec industrial players have failed to obtain electrical power to decarbonize their activities, added Jocelyn Allard, president of the Quebec Association of Industrial Electricity Consumers, the next day. Some of its members are experiencing “frustrations,” he explained, because they are being refused electricity to replace natural gas.
Since the law entrusted the allocation of blocks of 5 MW and more to the MEIE, in February 2023, five projects aim (at least in part) at the decarbonization or electrification of existing activities, according to a categorization carried out by The Duty.
Thirteen promoters have received megawatts to develop new projects in the clean energy and battery sectors.
Finally, four promoters obtained valuable power blocks to develop new projects outside the energy sector.
“When we look at this list, we can’t say that it is very oriented towards the decarbonization of Quebec industries…”, observes Normand Mousseau, scientific director at the Trottier Energy Institute and professor of physics at the University of Montreal.
In terms of megawatts awarded, new plant projects are taking big slices of the pie: 360 MW for Northvolt, 150 MW for TES Canada, 104 MW for Greenfield Global, 93 MW for Volta, 77 MW for Nouveau Monde Graphite and 74 MW for Ford-EcoPro CAM.
A “multi-criteria” and confidential analysis
As a reminder, the ministry evaluates the power requests submitted to it using a “multi-criteria analysis” covering the economic, social and environmental impacts of the projects. The details of these evaluations are confidential. The power granted to a project is not disclosed until a final agreement is reached between Hydro-Québec and the promoter.
In its 2035 Action Plan, unveiled last November, Hydro-Québec details how it wants to distribute the allocation of new electricity over the next decade: 40% must go to the electrification of transportation and the decarbonization of buildings, 35% to the decarbonization of industries, 25% to economic growth.
Industrial connections obviously do not monopolize all the new power available. The correspondence between the projects authorized by the ministry and the percentages targeted by Hydro-Québec is therefore not direct. In addition to the large power blocks, we must add the charging of electric vehicles, new residential complexes, the electrification of heating, the decarbonization of small and medium-sized businesses, etc.
Nevertheless, the resigning minister Pierre Fitzgibbon’s preference for economic development is reflected in the industrial connections authorized. Since February 2023, two batches of 11 projects have been announced. The first group won 956 MW; the second, an undisclosed total power.
For comparison, Hydro-Québec distributes more than 40,000 MW of electricity to all of its customers during very cold weather. By 2035, the government corporation plans to acquire an additional 9,000 MW of power — the equivalent of the LG-2, Manic-5 and La Romaine hydroelectric power stations combined.