Quebec must stop selling its clean electricity at a discount. And be wary of the new environmental eldorado, green hydrogen.
Posted at 6:45 p.m.
Not so long ago, rolling out the red carpet to major energy-intensive projects could be justified, in a context of energy surplus and high unemployment. But the surpluses of the heritage block of Hydro-Québec, at 3 cents per kilowatt hour, will be exhausted by 2026, as well to say tomorrow. And the costs of new projects are rising fast.
“If we buy supplies at 11 cents and we have an industrial rate of 5 cents, well, that doesn’t work,” said Sophie Brochu, CEO of Hydro-Quebec, during a conference at the Council on International Relations of Montreal (CORIM), two weeks ago.
It was time for us to address this issue, as Hydro-Québec does in its strategic plan. It will be up to the Government of Quebec to set the guidelines, but Sophie Brochu’s explanations are essential: Quebec will need a lot of green energy to achieve carbon neutrality and it must therefore limit waste.
PHOTO PATRICE LAROCHE, THE SUN
Sophie Brochu is right to raise a yellow or even red flag, according to Francis Vailles. Hydro-Quebec has also warned promoters claiming more than 50 MW of power not to dream in color, by spending their money hastily.
Since the beginning of the year, Hydro-Québec has received requests to supply energy-intensive projects totaling 15,000 MW. That’s enormous, knowing that the current industrial demand is 8,500 MW and that Quebec’s production capacity is some 40,000 MW.
Why so many requests? Well, there you have it, Hydro-Québec is called upon to supply the new El Dorado for the environment, namely the energy produced with water. From this water is extracted hydrogen, which would make it possible to move heavy vehicles and supply certain large industrial sectors without GHG emissions.
Of the 15,000 MW of projects, two thirds concern the production of hydrogen. Major international groups are looking for cheap, green energy sources in the world to position themselves, and Quebec is obviously on the list.
One of the big players, the German company Hy2gen, has leaked its $1 billion project in Baie-Comeau, which would require 300 MW of hydroelectric power. Green hydrogen could be used to power the Alcoa aluminum smelter and feed ships with green fuel. The port of Baie-Comeau is also seen as an asset for Hy2gen. The Caisse de depot et placement is one of the investors, according to the daily The sun.
But there is a catch. The production of green hydrogen, in particular by electrolysis of water, requires a great deal of hydroelectricity.
And in the end, if this hydrogen is used as fuel for a heavy truck, for example, 3 kWh of hydroelectricity generates only 1 kWh of green hydrogen energy1. In comparison, the efficiency of the lithium-ion battery for an electric car is 95%.
The production of green hydrogen from hydroelectricity must therefore be reserved for specific and very limited uses, for example as a battery for peak periods or for remote regions.
In this context, needless to say, exporting is heresy. Who wants to sell our hydroelectricity for 5 cents per kilowatt hour to a hydrogen producer when the supply could cost us 11 cents, and in addition, this energy will be exported without us benefiting from it for our development?
The situation is different in the west of the country. The hydrogen that is produced in the factory with natural gas (CH4) would make it possible to capture the carbon that is released, which is not the case when natural gas is burned, as in normal times.
And this so-called “blue” hydrogen would be cheaper to produce than a liter of diesel, we promise. It is not for nothing that the Canadian Hydrogen Congress is taking place in Edmonton, Alberta these days.
Energy Minister Jonatan Julien, who has promised to unveil his hydrogen strategy by the end of spring, will therefore have to go about it sparingly. Especially since according to the IPCC, hydrogen will not represent more than 2.1% of the world’s energy consumed in 2050.
Not sure that the Quebec Liberal Party, which wants to make hydrogen a social project for Quebec, has taken note of it.
Sophie Brochu is right to raise a yellow, even red flag. Hydro-Quebec has also warned promoters claiming more than 50 MW of power not to dream in color, by spending their money hastily.
Here is an excerpt from the letter sent to them recently:
“Although we have a significant volume of electricity, we are working, together with the government, to develop guidelines that will make it possible to determine the most promising projects that can be authorized. Consequently, it is important that you exercise sound caution in the implementation of your projects until they are clearly accepted by Hydro-Québec. »
The state corporation can refuse projects larger than 50 MW, but cannot do so, in theory, for smaller projects.
Twenty years ago, I denounced the Alcoa aluminum smelter expansion project in Deschambault because it would have cost $480,000 per job created per year for 25 years, given the low rates of Hydro-Québec.2.
The reasoning is the same today. Ministers Jonatan Julien and Pierre Fitzgibbon should temper their enthusiasm.
1. Going from a hydroelectric kilowatt hour to a hydrogen kilowatt hour results in a loss of 30 to 40%, depending on whether it is gaseous or liquid. And if this hydrogen is used as fuel for a heavy truck, another loss must be added, so that in the end, the hydrogen only recovers 30 to 45% of the hydroelectric energy in such a case.
2. The calculations of the late economist Marcel Côté were then based on the difference between the cost of the heritage block (3 cents per kilowatt hour) and the cost of new hydroelectric projects, then 6 cents. For various reasons, the project ultimately did not take place.