By dint of repeating it, it has become commonplace: Sophie Brochu’s vision for Quebec’s energy future and that of the government diverge. But, in reality, what are the points of friction, and where are the connections? A look back at four files that may have contributed to the decision of the CEO of Hydro-Québec.
Hydroelectric dams
“Are you going to end up doing some roadblocks? “asked Guy A. Lepage to Sophie Brochu in October 2021. “In the foreseeable horizon, we don’t have that in our boxes at all”, replied this one. Energy efficiency and wind power will be the first responses to increased demand, explained Ms.me Brochu on the set of Everybody talks about it. Of course, she said, no one knows the future: Hydro-Québec strives to be ready for all eventualities. The state corporation is therefore carrying out the necessary studies on possible hydroelectric dams, but does not expect to have to resort to this option anytime soon. ” Say under my watch, I don’t see that at all, ”summarized the boss. A few months later, Hydro-Québec’s strategic plan — which Mr.me Brochu now considers as an important legacy — also approached the question of new dams from a hypothetical and distant perspective.
“We must seriously consider the construction of new dams,” declared François Legault in November, in the opening speech of his second term. The Prime Minister recognizes that wind power and the modernization of existing power stations will play important roles, but he thinks that Quebec should not give up on new hydroelectric works. “The problem with solar, then wind, is that it’s intermittent. So it’s not enough to meet our needs,” he said. Mr. Legault foresees possible new hydroelectric projects in the medium term: between the announcement of a project and the commissioning of the facilities, he expects to have to count about 15 years. This is why he is calling for a “genuine societal debate” to be held by 2026. His Minister for the Economy, Innovation and Energy, Pierre Fitzgibbon, affirmed for his part that the fall last, that “the dam is the result, it is not a strategy”. In other words, the government is not adamant about dams, but considers that they will become essential in the context of the increase in demand.
New industrial customers
Sophie Brochu is not opposed to the arrival of new “energy-intensive projects” in the province. In particular, the state-owned company plans to quintuple its sales to data centers (excluding cryptocurrencies) in the next decade. However, meeting the needs created by Quebec’s deep decarbonization will already put enormous pressure on electricity demand by 2050, states Hydro-Quebec’s strategic plan. Projects must therefore be carefully selected based on their ability to generate “the most positive impact for Quebec”. In theory, these orientations dovetail perfectly with those of the government. In practice, however, the question of the rates offered to companies landing in the province seems to pose a problem. “We need to support our businesses. But, in this day and age when our fees are going up, and the value of their green products is going up, our prices need to go up too,” Ms.me Booklet at Globe and Mail in a long portrait published at the end of November. “If we get our supplies at 11 cents and we have an industrial price of 5 cents, well, that doesn’t work,” she said last April.
The question of quantifying “positive impacts for Quebec” also remains unresolved. The objective of the committee on the economy and the energy transition, explained Minister Fitzgibbon in October, “is to allow Hydro-Québec to understand the work as a whole”. “The economic benefits of aluminum in the Saguenay, for example, may be much higher than the profitability we have at Hydro-Québec,” he said. Tax revenue from major industrial projects should also be taken into account. With this information in hand, policy makers must prioritize economic benefits over other concerns. According to Mr. Legault, the choices concerning the production and sale of electricity — for which “the demand is greater than the supply” — are articulated “according to our two main objectives: to create wealth, then to eliminate GES”.
The extra energy
Quebec will need at least 50% more energy by 2050: on this, Hydro-Quebec and the government agree. In addition to the issue of new hydroelectric dams, discussed above, the two entities also agree on the essential measures to be adopted to obtain this additional energy. Consuming more efficiently is one of the strategies that will serve to free up kilowatt hours. In terms of production, modernizing the turbines of hydroelectric plants will provide a good boost. But, above all, all the players expect a lot from the potential of wind energy. “We can do a lot more, it sells a lot in certain places in Quebec,” said Minister Fitzgibbon at the beginning of December.
A recent development shows that Hydro-Québec, like the government, intends to boost wind power production as quickly as possible. Until very recently, promoters had the option of submitting wind energy projects to calls for tenders issued by Hydro-Québec throughout the territory. However, explained Sophie Brochu in October 2021, this way of doing things is not ideal: it can create congestion on the distribution network. “There will come a time when, to manage the optimality of the electricity network, we will have to indicate where it is most efficient on the network. We are not quite there, but it will come, ”she said. This time has come. Last December, the government rejected two calls for tenders that the state-owned company was preparing to launch. A new mechanism will allow you to target strategic areas where you can quickly add power. The state-owned company, which welcomed this decision “favourably”, will have to launch a “procurement process” in the coming months. The new volumes of wind energy will be higher than those initially planned in the two blocks pushed back.
Prices and sobriety
Both parties agree that Hydro-Québec’s rate structure will have to be modernized to meet the requirements of the energy transition. The process, delicate, presents a multitude of pitfalls on which the discussions can hang. According to its latest strategic plan, Hydro-Québec plans to submit tariff changes to the Régie de l’énergie in order to “strengthen price signals” to encourage judicious consumption. “Does the increase in demand have an effect on prices? The answer is yes,” said Ms.me Booklet at To have to. This orientation will make it easier for Hydro-Québec to achieve its peak power reduction objectives, which are largely based on the willingness of its customers to consume less during extreme cold weather.
The government, for its part, is preparing a “very, very massive” bill that will concern Hydro-Québec and the Régie de l’énergie. Few details have leaked out on this subject since Minister Fitzgibbon made the announcement in early December, promising consultations. One thing is certain, “dynamic pricing” — which consists of selling electricity at a higher price during peak periods — will be among the topics discussed. This type of measure should enhance Quebec’s energy sobriety. “To know a little about what is happening in the world, we are not sober in our consumption” in Quebec, argued Mr. Fitzgibbon. Businesses will also be affected by this regulatory fuss: the government could retain the right to reduce the supply of power to businesses during peak periods. “The idea, of course, is to make Hydro-Québec more agile in the face of the new energy reality,” explained the minister.