Fitzgibbon’s mixed energy record

Michael Sabia hit hard. The head of Hydro-Québec said, essentially, that the government had not done enough for decarbonization and too much for economic growth and new businesses.

Michael Sabia thus attacked, in a way, the record of the outgoing Minister of Energy, Pierre Fitzgibbon. Let it be said, Hydro-Québec maintains a certain independence, and that is all the better…

Watching the video rather than just reading the words spoken, we realize that Michael Sabia is more nuanced, his nonverbal language tempering his message.^⁠1.

Still, his statement begs the question: what is Pierre Fitzgibbon’s record in this regard? Did the former Minister responsible for Energy and the Economy respect the wishes of Hydro-Québec, which wants to allocate 75% of its new energy blocks to decarbonization and 25% to economic growth?

As always, this numerical assessment must be qualified. First, two-thirds of the major projects authorized by the minister since he took power in February 2023 were authorized before Hydro-Québec tabled its new strategic plan (November 2023) and its 75%-25% allocation objective in favor of decarbonization.

In addition, several projects meet both objectives, namely decarbonization and economic growth (a table of the 22 projects and their megawatts is presented at the end of this article).

However, when reviewing the projects, it is clear that decarbonization has not been the top priority.

Over the past 13 months, only 11% of the 1,433 megawatts granted by the minister have targeted decarbonization and 54%, economic growth, such as those in the battery sector. The other projects (35%) have affected both aspects, according to my count.

In addition to these projects under Fitzgibbon, there were those from the CAQ era that had been negotiated by Hydro-Québec before we realized the extent to which our needs required us not to squander our energy. Hydro-Québec did not really have a choice but to serve businesses, according to its constitutive act.

Thus, around twenty projects benefited from acquired rights before the adoption of the law in February 2023, which gave the minister the power to choose among projects of 5 MW and more submitted to Hydro.

The bulk of these projects, around 460 MW, did not concern themselves with decarbonization, hence the exit of former Hydro CEO Sophie Brochu. Among them are Microsoft data centers, totaling a large block of some 130 MW.^⁠1. Not really any decarbonization in Quebec, little value creation…

Another nuance: criticism has been made about the lack of energy approval for Quebec companies, but the reality is that real decarbonization projects from local companies are not raining down.

Everyone has of course heard of the Forges de Sorel, which was refused around fifteen megawatts to reduce its dependence on natural gas. Or of the Papiers Rolland, in Saint-Jérôme, deprived of around ten megawatts.

But speaking to Jocelyn Allard, spokesperson for major industrialists, we see that companies truly frustrated by the lack of energy can be counted on the fingers of one hand, and that their projects often had growth as their primary objective, not decarbonization.

As for the companies already established here that would leave Quebec due to lack of energy, the representative of large gas consumers, Nazim Sebaa, does not count any among his members… In fact, what company can claim to want to leave Quebec and its green energy to decarbonize elsewhere with gray or black energy?

True, some data centers have been denied power, but that’s because the economics are slim compared to the large amounts of power at stake.

In short, economic growth is important, but it still needs to increase productivity, create value and reduce GHGs… We are therefore far from a massacre for this type of business in government decisions.

Two major energy allocations have been announced since the Minister of Energy has been given the task of sorting out requests for more than 5 MW: the first in August 2023 – before Hydro’s strategic plan – and the second in June 2024.

The battery sector captured 694 MW, or nearly half of the 1,433 MW granted, according to my compilation. And, surprise, the hydrogen sector managed to extract 450 MW, nearly a third of the total, despite criticism of the real effectiveness of hydrogen-related technologies in the Quebec context.

In any case, it is unthinkable that Quebec will relaunch an industrial strategy as energy-intensive as that of batteries in the coming years, if we follow Hydro-Québec’s plan.

Energy for the transition and decarbonization will be too essential to afford it… especially if negotiations with Newfoundland over Churchill Falls and Gull Island go sour.

For Hydro’s plan to work, 75% of energy will have to be devoted to decarbonization and 25% to economic growth, Michael Sabia told us.

And this plan, let us recall, implies that Hydro-Québec produces 30% more electricity by 2035, in addition to doubling energy savings, adding respectively 60 terawatt hours (TWh) and 21 TWh of energy to the current 200 TWh.

Each year, the Crown corporation must therefore invest $14 billion, three times the average of the last five years. That’s the equivalent of 2 REMs… per year!

So, notice to companies: without a significant decarbonization component, your projects will be shelved…

1. “To date, the government has placed a lot, a lot of emphasis on new businesses. It comes back to the question of the balance between decarbonization, new industries and economic growth. We said in our strategic plan that our objective is 75% decarbonization and 25% growth. Whether this distribution is reflected in the government’s decisions to date is not entirely clear.”

2. Read “Hydro-Québec was afraid of running out of electricity for Fitzgibbon projects” on the website of Montreal Journal