Hydro-Quebec has the smallest margin of maneuver of all electricity producers in America for this winter, according to a report. In a scenario of extreme conditions, the state-owned company would have to carry out load shedding and cut off electricity to customers.
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On Wednesday, Hydro-Québec announced that it would pay top dollar to obtain supplies from large industrialists like Resolute, which has just signed an agreement with the state-owned company. If Hydro-Québec requests it, it will be possible for Resolute Forestry Products (PFR) to sell it up to 60 megawatts of power this winter, at a price of 14.4 cents per kWh.
That’s almost as much as the approximately 22,000 participants in the Hilo program provided last year in energy savings, or the equivalent of the consumption of 9,000 residences.
But this agreement above all demonstrates the little room for maneuver available to Hydro-Québec in the event of extreme cold.
With the “interruptible option”, Hydro-Québec industrial customers can, on a voluntary basis, interrupt or reduce their electricity consumption during periods of extreme cold and peak demand to reinject power into the electricity network. Hydro-Québec, in order to avoid power outages.
According to PFR, this is the continuation of an existing agreement. “What’s different this year is that we wanted to extend our participation from our factories in Saguenay to Jonquière. And to do it, we needed permission from the Quebec government,” explains Louis Bouchard, v.-p. public affairs for Papier Excellence, parent company of Résolu.
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More room to maneuver
On the other hand, Hydro-Québec’s reserves are becoming increasingly scarce, as highlighted in a report from the North American Electric Reliability Corporation (NERC), an organization whose goal is to ensure the reliability and security of networks. in North America. These reserves could prove insufficient in the event of extreme conditions, such as a prolonged period of intense cold, the report said.
In a scenario of extreme conditions, Hydro-Québec would have -2% room for maneuver, according to the report, which would force the state-owned company to carry out load shedding and cut off electricity to customers.
Also, Hydro-Québec has the smallest margin of maneuver of all producers in America in a normal scenario, according to the report.
“To my knowledge, this is the first time that Quebec is in negative territory,” underlines Jean-Marc Pelletier, former Hydro-Québec engineer who also worked for 25 years at the Hydro-Québec Research Institute. (IREQ).
“We have always made agreements with paper manufacturers and large industrial consumers to meet peak demand. But right now, there aren’t enough of them. Demand in Quebec has increased for electricity and they are scraping the bottom line,” he adds.
Black eye
PFR owns, for self-production purposes, seven hydroelectric power stations with a total installed capacity of 176 MW, five of which are located on the Shipshaw River.
The newspaper tried to find out what price PFR would receive from Hydro-Québec for its MW of power, but Hydro refuses to answer. “Large industrial customers who sign up to the Interruptible Electricity Option allow, year after year, the curtailment of around 1000 MW during the winter peak period. However, the information on the files of each of our customers is confidential,” Francis Labbé, spokesperson for Hydro-Québec, told us.
However, Hydro-Québec’s price list indicates that the price of interruptible electricity is 14.39 cents per kWh.
According to Jean-Marc Pelletier, the situation is something of a black eye for Hydro-Québec.
“Hydro-Québec has gone from the status of a reliable electricity supplier in the Northeast market to that of a producer who will have to import electricity for Quebec’s future needs, or even close factories to avoid not cause complete breakdowns,” he laments.
“And to correct these errors, we are going to penalize people here by asking them to turn down the heat or start their dishwashers at 3 a.m.!”
From surplus to shortage of electricity
- November 2018: “We have surpluses, we must export them.” –Éric Martel, CEO of Hydro-Québec, during the presentation of the strategic plan
- March 2022: More than 100 additional terawatt hours (TWh) of clean electricity will be required for Quebec to achieve carbon neutrality in 2050, or more than half of Hydro-Québec’s current capacity, according to the new strategic plan submitted by the company. State and presented by CEO Sophie Brochu.
- December 2022: Quebecers must reduce their electricity consumption, warns Pierre Fitzgibbon, minister responsible for Hydro-Québec. Reduced heating, hourly pricing… Everything is considered by the minister responsible for Energy, including the installation of thousands of wind turbines in the North.
- September 2023: The Minister of Economy and Energy, Pierre Fitzgibbon, raises the possibility of having to double electricity production capacity by 2050 by creating more partnerships with private companies.
- September 2023: “Electricity is no longer a commodity. In Quebec, for years and decades, there has been the perception that electricity is abundant with significant surpluses. […] We need to adjust prices to better reflect the reality that electricity has now become a valuable asset.” Michael Sabia, CEO of Hydro-Québec, during a Zoom meeting with employees, his first since his appointment.
- November 2023: Due to the development of the battery sector and growing industrial needs, Hydro-Québec will run out of electricity two years earlier than expected, which will force it to increase its imports during winter peaks. A year ago, Hydro expected to have enough electricity until 2029. However, in a document filed with the Régie de l’énergie, the state company reveals that it is now looking for new supplies for 2027, two years earlier than it forecast in November 2022.