The year was eventful at Hydro-Québec. Demand for clean electricity is exploding and the province's industrial policy is increasingly reliant on this energy. But there is not enough electricity to meet diverse needs and the government has to make decisions.
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The year 2023 was marked by this reality: the surprise departure of CEO Sophie Brochu following a disagreement with Minister Pierre Fitzgibbon over the use of our electricity. The choice that the government must make between the numerous investment projects that require electricity. New dams and thousands of new wind turbines that risk sowing discord among citizens…
At the same time, storms cause cracks and breaks in the network, and outages have never been so numerous and long-lasting. Will the new CEO Michael Sabia be able to steer the liner out of difficult waters? The latter does not want to save on resources because it wants to spend $185 billion over the next eleven years.
The “Electricity Dollarama”
For many, the highlight of 2023 will have been the impact of politics and Minister Pierre Fitzgibbon on the province's energy future. In particular, Bill 2, which aimed to cap Hydro-Québec tariffs, sparked anger among many.
“This bill arbitrarily imposes price increases of 3% for consumers and even more for commercial and industrial companies, whereas if, as in the past, it had been the authority that made its assessment, it would have been much lower,” notes Jocelyn Allard, president of the Quebec Association of Industrial Electricity Consumers.
For others, Sophie Brochu's departure and the new direction taken by Hydro-Québec revive the specter of the “Electricity Dollarrama,” an image created by Sophie Brochu that suggests Quebec is selling its electricity to companies at a discount would.
“Hydro-Québec's presentation of the 2035 Action Plan marked a break with the rule of Sophie Brochu, relegated its development plan to the past and crystallized the grand reopening of the Dollarama of energy,” says Jean-François Blain, energy analyst.
Surprising resignation of Sophie Brochu
The year 2023 started with a bang. After just three years at the helm of Quebec's largest state-owned company, Sophie Brochu has announced her retirement. His disagreement with Energy Minister Pierre Fitzgibbon over the use of clean hydroelectricity may have contributed to his departure. His legacy will be particularly marked by the export contract with the State of New York, the largest in the history of Hydro-Québec, and the acquisition of 13 hydroelectric power plants in New England. These gestures were primarily intended to “put a foot on the ground” in New England, a region of the United States that Hydro has set its sights on. However, it leaves in limbo a major reorganization of Hydro-Québec aimed at eliminating the historic production, transmission and distribution departments and forming “Une Hydro.” Several employees accuse him of leaving the ship without completing the work.
Endless connection times
The length of outages has more than doubled in a year, with customers spending an average of more than 14 hours without power last year. Additionally, nearly 500 Hydro customers have been waiting for more than two years to be connected, forcing some of them to pay thousands of dollars for heating with generators at the risk of suffering damage to their property in the winter. A situation that Hydro-Québec explains with a record demand for connections that surprised the state-owned company and delays attributed to customers. But Hydro-Québec's complex and bureaucratic process is also to blame. The CEO, Michael Sabia, himself admitted that Hydro's service is not up to par, that there are too many outages and that communication is poor. In response, Hydro plans to spend up to $50 billion to reduce the number of outages by 35% within seven to 10 years.
Towards a “privatization” of Hydro-Québec?
Given Quebec's enormous electricity needs (Hydro aims to double its production by 2050), Energy Minister Pierre Fitzgibbon paved the way for private participation in electricity generation, particularly through dams, private companies and allowing certain companies to produce their own electricity. If voices were raised against a hypothetical “privatization” of Hydro-Québec – which Prime Minister François Legault quickly denied – experts such as Pierre-Olivier Pineau of HEC emphasize that this contribution could, on the contrary, be beneficial for everyone by opening up production to everyone, who wish to do so without affecting Hydro-Québec. Companies like Innergex say they are ready to respond to the minister's call and are just waiting for the green light.
Wind turbines? Not in my garden!
Hydro-Québec aims to triple Quebec's wind capacity within 12 years. After being embedded in the skies of Gaspésie and eastern Quebec, the next wind towers will this time grow on agricultural land near citizens and communities in the heart of Quebec. Citizens from several regions have already taken to the barricades against certain projects. Several mayors see this as a very lucrative stroke of luck. Wind turbine fees are generous (nearly $40,000 per turbine per year) and can transform a community's operating budget. But with the construction of thousands of wind turbines that will supply 10,000 MW of electricity – as envisaged by Michael Sabia's plan – numerous and sometimes heated conflicts are likely to arise.
Energy sobriety in 2024?
We will remember that Minister Pierre Fitzgibbon threw a wrench into the water at the turn of the year with his concept of “energy sobriety”. He even mentioned a possible law that would force Quebecers to reduce their consumption by, for example, turning on their dishwashers at night or by proposing to limit heating to 19 degrees.
In order to increase the amount of electricity available, companies, but also citizens, are required, announced Michael Sabia. Will it be the stick or the carrot? Hydro-Québec says it primarily offers “incentives” and “supports” its customers. Prime Minister Legault also assures that Hydro will not increase citizens' tariffs by more than 3%. However, Hydro will focus heavily on energy efficiency. In his plan unveiled on November 2, Michael Sabia says he wants to double Hydro customers' energy savings to save a total of 3,500 MW by 2035.
– Amount of investments required by 2035: up to $185 billion
– Electricity requirements until 2050: between 150 and 200 TW
– Proportion of new electricity used to decarbonize the environment: 75%
– Energy savings Hydro customers will achieve by 2035: 3500MW
– Number of customers who have been waiting for a connection for more than two years (as of November): 492
– Number of hours on average that customers spent without electricity in 2022: 14