It is not verbal swelling to say that the mandate awaiting the next president and chief executive officer of Hydro-Québec, Michael Sabia, will define not only the destiny of the Crown corporation, but also that of Quebec society. A significant part of its efforts will have to be devoted to the energy transition in Quebec and even throughout the northeast of the continent, due to the close ties that Hydro maintains with neighboring networks.
Globally, the transition is just beginning. Everything is to be done: to date, less than 1% of vehicle fuel consumption has been reduced thanks to electrification. However, this movement should accelerate.
For the new CEO of Hydro, this will mean juggling a multitude of projects in various fields simultaneously. Projects whose realization will of course test the operational skills of the executives who will report to him.
This means that the new CEO will have to pay attention to the employees from the outset. Mobilized in favor of the transition by the outgoing CEO, Sophie Brochu, they were quite shaken, even disappointed by her departure. She certainly leaves behind a strategic plan for the years 2022-2026, but she also leaves in the middle of a major reorganization of Hydro-Québec.
Mme Brochu has in fact implemented an operational separation between production, transmission and distribution activities that has existed for a long time. This new organization will have to be reassessed in light of the priorities of the new CEO, knowing that the employees are still adapting to the structure that has just been implemented.
Externally, the huge investments that will have to be made due to the objectives of decarbonization and the transition away from fossil fuels are a major challenge.
First of all, there is the vast project of energy efficiency. Hydro recently tripled its targets, increasing them from 8 to 25 terawatt hours. This is the equivalent of three times the energy produced annually by the Romaine hydroelectric complex.
Hydro will also have to invest in equipment projects aimed at increasing the production capacity of its power stations and, at the same time, integrate hundreds of megawatts into wind projects.
In terms of adaptation to climate change, the state-owned company published a plan in 2022 containing a series of measures aimed at strengthening its network and managing climate risks more effectively.
The power balance, ie the energy to be supplied in times of high demand, will also be a concern for Michael Sabia. It will thus have to accelerate the digitization of the network, make it more bidirectional, in order to include customers in a more active management of their consumption.
In addition, this new CEO with a long and rich professional experience will have to be actively involved in the renegotiation with Newfoundland of the Churchill Falls contract, which will expire in 2041. For his predecessors, the expiry of this contract was on a very distant horizon. This is no longer the case. It is therefore more than 5,000 megawatts, a reliable and very inexpensive source on which Quebec has been able to rely very advantageously for decades, which will have to be filled in less than twenty years.
All of these objectives and challenges will be broken down into dozens of projects intended for numerous and diverse clienteles involving a host of suppliers. Accustomed to investing for this purpose about three billion dollars a year in Quebec, Hydro will have to double this envelope. We will then be close to six billion, perhaps even more. These projects will also have to pass the test of social acceptability, including transmission line projects, which are never easy to pass.
The new CEO will therefore, together with his team, have to demonstrate an extraordinary capacity for operational management. The multiple projects to be launched, in different sectors of activity, throughout Quebec, will require enormous rigor in terms of cost control and deadlines.
Michael Sabia will have to mobilize his teams as well as the entire Quebec industry to face these major challenges. If it succeeds, it is all Quebecers who will reap the benefits and who will have made giant strides in decarbonizing our economy.