The Legault government's battery sector projects, particularly that of Northvolt, caused a wave of panic behind the scenes, to the point where Hydro-Québec spoke of the death sentence of already approved industrial projects and the construction of a new gas power plant, disclosing confidential documents that were received from The newspaper.
Last year, Quebec gave the green light to five priority projects in the battery sector. These will consume 664 megawatts (MW) of electrical power, including 360 MW for Northvolt alone (see table).
However, Hydro was already planning to run out of power for the 37 industrial projects that were “locked in” from December 2022 and will require more than 1,700 MW.
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In a presentation made by the state-owned company to Energy Minister Pierre Fitzgibbon in June 2023, it was recalled that Bill 2, adopted in February 2023, “forces Hydro-Québec to recognize these projects”.
“Without structuring measures, Hydro-Québec does not plan to be able to meet the obligations related to the 37 projects implemented or other projects,” we warned.
When asked by Le Journal, Hydro assured that the 2035 Action Plan of its new CEO Michael Sabia will make it possible to generate the thousands of megawatts required for all these projects (see other text).
CEO Michael Sabia during the press conference on Hydro-Québec's 2035 Action Plan – Towards a decarbonized and prosperous Quebec. Montreal, November 1, 2023. Photo Pierre-Paul Poulin
Red flags
Three months after the announcement of Northvolt's arrival, the situation was critical for the 19 projects that had not signed a firm agreement with Hydro (see table).
Hydro-Québec didn't beat around the bush in its presentation, telling the minister that it no longer had any room for maneuver:
- “Negotiations are necessary to optimize these projects and mitigate the risk of exceeding capacity,” we wrote.
- “The promised megawatts exceed the available capacity. Mitigating risk requires strategies that are responsive to demand,” we added.
“Irresponsible”
“The current government only sees economic development as attracting energy-intensive industries, which makes no sense,” complains Normand Mousseau, a professor at the University of Montreal and scientific director of the Trottier Energy Institute.
“We say to all current companies that want to decarbonize in Quebec, ‘Too bad, die!’” he says.
Normand Mousseau Full Professor of Physics, University of Montreal Scientific Director of the Trottier Energy Institute https://iet.polymtl.ca Member of the Executive Committee of the Energy Modeling Hub https://cme-emh .ca Research Director https:/ /www.accelerateurdetransition.ca Photo provided by Normand Mousseau
“It shows the completely irresponsible and contradictory nature of the productivist rush that this government is orchestrating,” denounces Jean-François Blain, an independent energy sector analyst.
Thermal power plants and imports
To meet strong industrial demand, Hydro-Québec submitted a “scenario” to the government to increase its capacity by 800 MW by 2032, in addition to production expansions already planned.
The scenario envisaged the use of the Bécancour natural gas power plant (400 MW) and a “new thermal power plant” for peak periods.
“In the event that the full potential is not reached or an adverse climatic event (low hydraulics) occurs, thermal power plants would be required to support it (Bécancour power plant at the base and new power plant at the top),” the presentation highlights.
“We go back 20 years when we had the debate about thermal power plants,” protests Greenpeace’s Patrick Bonin.
3D rendering of the Northvolt Six factory in Quebec. Photo provided by Northvolt
“Significant uncertainty»
The capacity improvement scenario presented in June 2023 also included an increase in energy efficiency targets, “increased dependence on external markets with low hydraulics”, tight management of reserves and the use of battery storage.
Hydro-Québec warned Minister Fitzgibbon that “significant uncertainty remains regarding most of the variables in this scenario,” highlighting the expected uncertainty of the balance between electricity demand and supply in Quebec.
When asked by Le Journal about a return to thermal power, Hydro-Québec said: “Building a new power plant is out of the question.”
Battery sector, data centers, greenhouses, decarbonization…
Hydro-Québec has received more than 30,000 megawatts of industrial projects, equivalent to 10.5 million homes. Projects with a consumption of 21,500 MW, mainly in the hydrogen sector, have already been rejected.
Here are the projects that were furthest along last year.
4 important dates
October 2022: Pierre Fitzgibbon gets energized
The day after the elections, Prime Minister François Legault entrusted energy to his long-time friend Pierre Fitzgibbon, already in charge of the economy and innovation portfolios.
January 2023: Sophie Brochu announces her resignation
Hydro-Québec CEO Sophie Brochu caused a surprise when she announced her resignation in April with two years left on her term. Last fall, she worried that Hydro would become an electricity “dollarama.”
Sophie Brochu led Hydro-Québec from May 2020 to April 2023. Photo Agence QMI, Thierry Laforce
May 2023: Michael Sabia is appointed head of Hydro
The government announces the appointment of Michael Sabia, former CEO of the Caisse de dépôt, to head Hydro-Québec. He will officially take office on August 1st.
September 2023: Announcement of the arrival of Northvolt
Justin Trudeau and François Legault announce the arrival of the Swedish company Northvolt, which they promise will produce “the greenest batteries in the world” in Quebec.
Hydro vows to keep up with demand
Hydro assures that it can find all the megawatts needed
The battery sector will not jeopardize industrial projects already underway, Hydro-Québec responded firmly when asked by Le Journal about an alarming presentation it made to the minister in June 2023.
“We have had a new CEO since August 2023 and published an action plan in November. The above documents or information […] are no longer relevant,” emphasized Maxence Huard-Lefebvre, spokesman for Hydro.
Commitments respected
The state-owned company has assured that it is able to meet its electricity supply commitments made until December 2022 with regard to the 37 industrial projects.
The capacity expansion scenario presented to the government in 2023 in the order of 800 MW or 6.4 TWh by 2032 is no longer on the cards, Mr Huard-Lefebvre said.
He noted that Hydro-Québec's 2035 Action Plan, presented in November by CEO Michael Sabia, calls for the addition of 60 TWh of energy, or between 8,000 and 9,000 MW of additional capacity, by 2035.
To achieve this goal, which is much more ambitious than that of the strategic plan presented in 2022, Hydro plans to significantly increase the number of wind farms, work hard to renew hydroelectric power plants, increase imports, use renewable natural gas and battery storage to use.
Investments of at least $155 billion are planned by 2035, of which only $90 billion will be for electricity production.
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