Due to the development of the battery sector and growing industrial needs, Hydro-Québec will run out of electricity two years earlier than expected, forcing the company to increase its imports during peak winter periods.
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A year ago, Hydro expected to have enough electricity by 2029. However, in a document filed with the Régie de l’énergie earlier this month, the state-owned company says it is now looking for new supplies for 2027, two years earlier than forecast in November 2022.
“The electricity balance shows that supplies will be needed from winter 2027 to 2028,” the document says.
Hydro-Québec predicts that the battery sector will consume 85 megawatts (MW) more in the winter of 2026-2027 than planned last year. The gap will increase to 205 MW the following winter and to 343 MW in 2028-2029.
Note that Swedish battery manufacturer Northvolt alone has received a 360 MW block for its factory project in Montérégie, which is scheduled to go into operation in 2026.
Projects criticized
Pierre-Olivier Pineau, energy specialist at HEC Montreal, hardly understands the Legault government’s “rush” on the battery sector.
“These are investments in industries that can contribute to decarbonization, but just building a battery factory will not achieve decarbonization,” he emphasizes.
The other element that will lead to an increase in electricity consumption, according to Hydro, is the desire of several companies to reduce CO2 emissions by electrifying their processes, particularly heat production in the agri-food industry and wood processing.
“We now assume that the conversion of industrial processes will occur slightly earlier than originally planned,” says Maxence Huard-Lefebvre, spokesman for Hydro-Québec.
The state-owned company assumes that decarbonizing the industrial sector alone will require 175 megawatts more than expected in 2026-2027 and 600 MW more in 2028-2029.
Imports that could be expensive
To meet this significantly greater than expected demand, particularly during peak winter periods, Hydro will need to increase its electricity purchases in the United States and Ontario. These electricity imports in short-term markets (“spot markets”) are forecast to increase from 900 MW last winter to 1,350 MW in 2027-2028 – an increase of 50%.
Hydro-Québec “plans to increase the maximum recognized contribution of short-term electricity markets, which is currently 1,100 MW […] to establish it at 1,500 MW from winter 2024 to 2025,” says the document submitted to the Régie.
Electricity imports are threatening to become increasingly expensive, notes Normand Mousseau, professor at the University of Montreal and scientific director of the Trottier Energy Institute.
Normand Mousseau is Professor of Physics and Scientific Director of the Trottier Energy Institute. Photo provided by Normand Mousseau
“In seven years, the amount of electricity available on international markets will be significantly lower because everyone wants decarbonization,” he says.
Several experts say Hydro-Québec would do better to work harder to encourage Quebecers to reduce their consumption, especially in the winter.
“It is unimaginable that we would run an outdoor spa at -20 degrees,” says François Bouffard, a professor at McGill University. This consumption is completely ridiculous!”
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