Posted yesterday at 10:00 a.m.
Quebec has the power to be more selective in hydroelectricity
The differences of opinion between the CEO of Hydro-Québec, Sophie Brochu, and the person who could inherit responsibility for energy within the framework of an economic superministry, Pierre Fitzgibbon, highlight two quite different visions of the use of the unique advantages of Quebec hydroelectricity: its low cost and its ecological character.
If we trust the Strategic Plan 2022-2026 of Hydro-Quebec, its CEO is counting on these assets to accelerate the colossal decarbonization project in Quebec, while the minister seems more driven by a vision based on all-out economic development.
A bit of context
The establishment of Quebec’s hydroelectric park and its promotion as an economic benefit to foreign investors took place in a context that was very different from the one we know today.
From the 1970s to 2010, the unemployment rate in Quebec was substantially higher than that of its Canadian and American neighbours. For example, this rate reached 13.2% in Quebec in 1993, compared to 10.9% in Ontario.
During this long period, it was normal for our governments in Quebec to bet on low electricity prices to attract as many job-creating investments as possible in order to fill our significant wealth gap with neighboring territories. The environmental nature of hydroelectricity was put forward, but less than its advantageous pricing.
However, the situation has changed since then. Quebec fares better economically: in 2010, unemployment was 8% in Quebec, while it was close to 9% in Ontario; this summer, it was 4.2% in Quebec, still lower than that of Ontario (5.5%)1. Moreover, with the emergence of the climate issue in the public debate, another virtue of hydroelectricity has been added: its low greenhouse gas (GHG) emissions.
Faced with the climate emergency, Quebec is indeed in the enviable position of having a carbon-free electrical network, which almost immediately offers many companies a green balance sheet in terms of energy consumption. This is an advantage that is now highly valued on a global scale, since commitments to zero GHG emissions within 20 to 30 years are multiplying among companies. The renowned organization Net Zero Tracker affiliated with the University of Oxford even speaks of an “explosion” of these commitments2which have gone from fringe to normal in the last three years, even to a moral obligation for any self-respecting organization.
Land of choice for businesses
In this brand new context, Quebec has become a land of choice for these organizations wishing to achieve their carbon neutrality objective. Requests from companies seriously considering setting up in Quebec have multiplied.
To meet these growing but still theoretical needs, Hydro-Québec would of course have to add a number of facilities: power stations, lines, substations. However, its room for maneuver has been reduced: its surpluses have melted, so much so that the state-owned company must already plan major investments to meet demand by 2029.
More fundamentally, the priorities of its strategic plan are more closely aligned with the major project of energy transition in Quebec itself. The magnitude of this project cannot be underestimated, since the fossil fuels used in transport, heating and air conditioning of buildings must be replaced by electricity. And, at the same time, meet emerging needs: batteries, data centers, blockchains, hydrogen, greenhouses, etc. And this, while continuing to sell clean energy to neighboring networks, helping them to accelerate their decarbonization.
An additional 100 terawatt hours of electricity would therefore be needed within 30 years, an increase of some 50%.
This vast electrification objective raises its share of issues. First, it will be necessary to have an available and qualified labor force in a context where unemployment has never been so low. Then, new projects will cost more, which will exert upward pressure on the price of electricity in Quebec. If our transition is to be just, the poorest citizens will need to be protected, and we will collectively need to use electricity much more efficiently. Finally, these projects will have to be developed more closely with the communities, including Aboriginals, which will require patience and skill.
Québec has clean megawatts that are the envy of investors more than ever. This is a major asset for our leaders who want to contribute to the prosperity of the community. But it also allows as much as it requires to be more pragmatic, more selective and to take the time required to make the most promising choices on the tariff, community and environmental levels.
*Former sales representative at Hydro-Québec
A change of governance for the energy transition
Rumors report the will of Prime Minister François Legault to concentrate the responsibilities of the energy transition in the hands of the future Minister of the Economy. This proposal may have merit, but only if it has an explicit mandate on the priority of climate objectives and an independent, non-partisan and transparent body, responsible to the National Assembly, monitors the performance of the actions towards achieving climate targets.
Despite major efforts and considerable expenditure on the part of the government, the transformations remain marginal and diffuse and greenhouse gas emissions remain at levels incompatible with the legal targets adopted by the National Assembly. It must therefore be recognized that the governance structure adopted four years ago does not meet expectations. Without a major change, we cannot expect the situation to improve in the second term of the Legault government.
As Paul Journet pointed out last Saturday1, countries have understood that carrying out the profound transformations of the energy system requires that the project be led by an influential ministry and, therefore, with an economic vocation. But, in itself, such a structure does not guarantee success.
Any transfer of responsibility must be accompanied by clear guidelines coupled with adequate indicators for monitoring the achievement of climate targets, so as to ensure economic development compatible with the government’s carbon neutrality orientations.
Whatever minister is appointed, he or she will find himself, on a daily basis, subjected to pressure from colleagues and economic players, to support one project or another. It is therefore essential that, in parallel with a ministerial overhaul, the government put in place an independent structure capable of transparently monitoring the indicators, highlighting the successes and failures of the performance of the measures, and indicating actions to be taken. put in place, with the necessary resources, to achieve the targets set by the government.
This is not the case, for example, of the Advisory Committee on Climate Change created two years ago. This committee is made up of volunteer experts and does not have an independent technical team responsible, on a daily basis, for conducting analyzes and carrying out essential follow-ups. Unsurprisingly, this committee is therefore unable to play the role of watchdog and critical guide promised by the government. A better model could follow that of the United Kingdom2 whose independent committee has a legal obligation to report to Parliament on the progress made by departments towards their emission reduction targets and to recommend corrections and conduct studies as necessary.
Independent mechanism
The centralization of powers surrounding the energy transition in the hands of a minister with economic levers, and capable of standing up to his colleagues from other ministries, such as that of Transport or Municipal Affairs, could therefore lead to lasting success. Provided that the government sets up an independent mechanism capable of imposing permanent and cross-cutting accountability for the performance of the climate actions of the ministries. Also on condition that this decision is accompanied by a mandate with clear decarbonization objectives.
Such a reform should avoid that energy transition efforts are reduced to the simple creation of new “clean” industries and energy production (e.g., hydrogen, electric dams, batteries of electric vehicles) without lingering, as a priority, deep decarbonization and improved energy management of our existing markets and industries, as feared by Sophie Brochu.
After decades of failures, Quebec no longer has the right to make mistakes. It must rely on best practices to implement non-partisan, transparent and effective climate governance that ensures the economic and carbon-neutral development of Quebec society. Rumors suggest that the Prime Minister is aware of this need. We can only hope that he does not choose, instead, to set aside the climate objectives adopted by the National Assembly and to drown the energy transition in blind economic development that would set Quebec back.