Hydro-Québec President and CEO Michael Sabia said Wednesday that the state-owned company wants to play a more active role in the wind energy sector.
In the parliamentary committee, where the deputies examined Hydro-Québec’s credits, Mr. Sabia explained that this desire is not the product of a plan.
“It is our intention to become much more present in the development of this sector,” he said. To do this, we have to work in partnership with experts but we also have to develop our own skills and we are in the process of doing that. »
The member for Québec solidaire, Haroun Bouazzi, recalled that his political party was in favor of the state company not relying solely on private companies to obtain wind energy supplies.
“We think that private production of all wind turbines is not a good idea,” Bouazzi said.
In January 2023, the Minister of the Economy and Energy, Pierre Fitzgibbon, expressed a prejudice towards maintaining the status quo in favor of private producers.
A Hydro-Québec spokesperson, Marc-Antoine Pouliot, said that the objective is not for employees of the state-owned company to be assigned to operations.
In a brief press briefing, Mr. Sabia clarified that the planned addition of 10,000 megawatts of wind power requires more expertise in partnerships with private producers.
“I think we should develop a better understanding of all of these technologies,” he said. […] We are not uncomfortable working in partnership but there is a role for Hydro-Québec to act as architect or coordinator of the development of this system and that is what we are going to do. »
The 2035 Action Plan, designed by Mr. Sabia, provides that Hydro-Québec will have to invest between $155 and $185 billion in the coming years in order to increase its production from 150 to 200 TwH to meet the needs by 2050. linked to the energy transition and economic development.
Mr. Sabia underlined the importance of Hydro-Québec’s role in this plan, particularly to promote economies of scale. On this subject, Mr. Sabia took stock of a recent consultation carried out by the state company from which it emerged that its activities should not be privatized.
“No one is seriously proposing the privatization of Hydro-Québec and I am very happy that no one [la] proposed because I think it’s a very bad idea,” he said.
Churchill Falls
With the addition of wind and possibly hydroelectric capacity, one of the elements of Quebec’s energy equation is based on the renewal of the supply agreement with Newfoundland and Labrador for the production of the Churchill Falls complex.
Mr. Sabia affirmed that the exchanges have not yet reached the negotiation stage.
“We are having conversations, not negotiations and there is an important difference between those two words,” he explained.
Mr. Sabia recalled that the current contract is there until 2041 and he insisted on the importance of being in a position of strength when the negotiations formally begin.
“Are we under pressure to do something with Newfoundland, the answer honestly is no,” he said.
The CEO remained vague but said other options are being actively explored. As for the option of building a new dam, he said other solutions could be considered.
“With a little creativity there are so many things we could do. It’s not necessarily another dam,” he said.
Tariff impacts
Mr. Sabia is still unable to quantify the tariff impact of the 185 billion development plan which aims to increase the state company’s electricity production.
He explained that the estimated cost of the new kilowatt-hours produced will be between 12 and 13 cents, compared to 6.4 cents for the most recent La Romaine hydroelectric project on the North Shore.
But several elements remain to be clarified, such as borrowing costs and the technologies used, which could have a financial impact. It will then be necessary to determine what part of the development costs will be amortized by a reduction in profits paid to the government or by subscribers.
“The question remains an open question at the moment,” he said.
At his side, Mr. Fitzgibbon recalled that his government promised to cap Hydro-Québec’s annual rate increases at 3% until the end of the current mandate, in 2026.
“The decision of 3% for residential rates is a political decision,” he said.
More carrots
Earlier, Mr. Fitzgibbon declared that the Quebec government still has carrots to offer Hydro-Québec subscribers to encourage them to consume less electricity in the context of needs linked to the energy transition and decarbonization, the costs of which will be pharaonic, he warned.
Mr. Fitzgibbon outlined his vision for achieving the 3,500 MW energy efficiency target, for example by inviting subscribers to install heat pumps.
“We will have to provide incentives,” he said. We still have carrots in the bag to convince consumers. »
The minister warned that the “stick” would be to raise prices as in Europe.
Mr Fitzgibbon said decarbonisation will require massive investment.
“These are going to be enormous costs, the figures will be pharaonic,” he said, admitting that it was impossible to specify them.
According to him, the capture of greenhouse gases will be necessary to achieve this objective. He also mentioned nuclear energy, while admitting that Quebec “is not there yet.”
Mr. Fitzgibbon recalled that he still plans to present a major bill by June with the hope that it will be adopted before the end of the year.