Hydro-Québec–Énergir Agreement | The transition without breaking the bank

The dual-energy heating project that Hydro-Québec and Énergir want to have approved by the Régie de l’énergie is arousing passions… essentially against it.

Posted at 12:00 p.m.

Sylvain Audette and Pierre-Olivier Pineau
Energy Sector Management Chair, HEC Montréal

The two main reasons given are the increase in costs, in the short term, for Hydro-Québec customers and the fact that the current natural gas network will still be used or even under development, whereas the objective is to finish with natural gas. The problem is that these two premises are false, the costs will be lower and this is in fact the beginning of the decline in the use of natural gas for a healthy energy transition. We must not trust appearances and fall into easy demagoguery. It is better to understand the situation in more detail, especially when many Quebecers are not ready to pay more for their electricity.

Let us recall the situation: there are approximately 130,000 households in Quebec that heat with natural gas, while the majority of the others heat with electricity (nearly three million households). This natural gas heater emits just under one million tonnes (Mt) of greenhouse gases (GHG), out of a total of more than 80 Mt. Quebec aims to reduce its greenhouse gas emissions by 37.5%. by 2030 and must eliminate them completely by 2050. By completely electrifying this heating with natural gas, we could directly eliminate these GHG emissions. The problem is that this would require adding more than 2000 MW of capacity to the electricity network (about 5% more), and would cause a 3% increase in the bill for everyone. Not only would Quebecers not be happy with this additional upward pressure on their bill, but many would oppose the necessary new installations. At the same time, Énergir’s natural gas network, already built, already in the ground and visually discreet, offers a temporary option to get started, while waiting for new approaches to maintain a comfortable temperature at all times.

Why hesitate if, right now, we can avoid a significant increase in costs (+1.3 billion dollars) by reducing GHG emissions by more than 50% by 2030?

Hydro-Québec electrifies two-thirds of the heating of current natural gas users, using natural gas for costly peak periods. These occur on days when it is very cold, such as in January and February of this year when we broke the records for electricity consumption. By keeping the natural gas for those days, we avoid adding the 2000 MW of additional capacity that would otherwise be required. It is one of the least expensive energy optimization measures available now for reducing GHGs and which allows a Quebec company, Énergir, to slow down an economic shock while waiting for it to make its own transition. In short, no one loses, everyone wins… that’s what justifies the project.

More broadly, what the opponents misunderstand is that the energy transition will require efforts from all Quebecers, will increase costs, and will require changes in habits. We also know very well that if a movement of social discontent begins, it can derail the best intentions and leave deep scars. Think of the uprisings in France or the truckers who blocked everything in Ottawa for three weeks. It is therefore important to have action plans that are effective, temporary without price shock and that minimize changes in habits. This agreement between Hydro and Énergir allows for that. The alternative of full electrification is the opposite: more expensive with more changes in Hydro infrastructure.

With this agreement, nothing will prevent getting rid of natural gas after 2030. By 2050, different approaches will have to be deployed: more efficient insulation, geothermal energy, more advanced demand management programs, more innovative pricing. These elements are inevitable, but they are not yet part of Quebec culture. It takes time to change cultures: let’s therefore take the first steps towards the energy transition, without stumbling from the first steps with higher costs for all. But also, let’s get ready for a lot of other changes, because this is just the beginning. This idea is very positive on all fronts between now and 2030 and the nature of the agreement is not to preserve or develop the current natural gas network in the medium and long term.


source site-58