Electricity shortage Where has Hydro Quebec39s surplus gone

Electricity shortage: Where has Hydro-Québec's surplus gone?

In less than two years, Hydro-Québec went from a surplus of 40 TWh to a demand of over 100 TWh. But it's not just the hydroplaners who are to blame. According to experts, subsequent CEOs also bear their share of responsibility for this turnaround.

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In a document filed with the Energy Authority at the turn of 2020, Hydro-Québec noted that “the production capacity of its power plants and its other sources of supply exceeds its needs by more than 40 TWh per year.” »

However, from November 2021, the state-owned company announced the end of electricity surpluses and the introduction of tenders to purchase significant quantities on the market.

March 2022: New CEO Sophie Brochu announces that Quebec will need an additional 100 terawatt hours (TWh) of energy if the province wants to achieve carbon neutrality by 2050, equivalent to almost half of the company's annual production.

Who was wrong?

“We must differentiate between the Hydro-Québec employees who plan and the company's managers. For example, Éric Martel (editor's note: predecessor of Sophie Brochu) had a short-term vision and wanted to monetize excess energy, while Madame Brochu was someone more realistic, relying on internal analysis. explains Gaétan Lafrance, energy planning specialist and professor emeritus at the National Institute of Scientific Research.

The expert, who has been involved in this type of planning for 40 years, points out that managers sometimes receive the same information internally, but communicate this information differently depending on their vision.

“Mr Martel and even François Legault at the time were against wind power because they said we had enough energy and didn't need it. This was the message sent to both the government and Hydro-Québec. However, it was wrong. People like me who were internal didn’t think so at all,” says Mr. Lafrance.

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The cryptocurrency boom

In 2018, everything began to change, explains Sylvain Audette, professor at HEC, with the windfall of data centers and cryptocurrency companies.

“They’ve been a little too successful at attracting these companies. “In one year, the electricity demand of these sectors quadrupled, and that’s when we started to worry and talk about it publicly,” he explains.

But in 2019, Hydro-Québec's communications were still talking about surpluses of 40 TWh. “In my opinion, there must have been clans internally that said: No, that won't work.” Then Sophie Brochu arrived and the message changed, the professor notes.

A paradigm shift?

At Hydro we are talking about a “total paradigm shift” that happened quite quickly and took everyone a little by surprise,” spokesman Maxence Huard-Lefebvre recently told the Journal. “What changes [c’est] that industrial players want to decarbonize. And also the power grids, especially those that are still powered by coal. We were not able to recognize this evolution of demand in our strategic plans before the arrival of Sophie Brochu,” he explains.

“We did not expect such strong economic growth after the pandemic,” notes François Bouffard, a researcher at McGill University. “In addition, the number of square meters of average housing built in Quebec today is much higher.” “One of the reasons that explains the disappearance of 40 terawatt hours is also the ever-increasing demand for residential real estate,” he says.

The thread of events

June 2015 : Éric Martel appointed head of Hydro-Québec.

November 2018 : Hydro expects electricity surpluses by 2026.

January 2018 : Hydro-Québec wins the export contract to Massachusetts (9.45 terawatt hours/year for 20 years).

November 2019 : A Hydro document submitted to the Régie confirms the surplus of 40 TWh per year.

March 2020 : Éric Martel leaves Hydro-Québec and joins Bombardier.

April 2020 : Sophie Brochu replaces Éric Martel at Hydro-Québec.

November 2021 : Hydro's supply plan makes it clear that the era of surpluses is over. Hydro-Québec is launching several tenders to fill the supply gap expected by the end of 2026.

November 2021 : Hydro-Québec signs the export contract with New York (10.4 terawatt hours/year for 25 years).

January 2022 : Hydro-Québec is sending a letter to its industrial customers to warn them that certain projects will not be automatically accepted as before.

March 2022 : Hydro-Québec announces that Quebec needs 100 TWh to achieve carbon neutrality by 2050.

October 2022 : Minister Pierre Fitzgibbon reiterates that Quebecers must observe a form of “energy sobriety” in the coming years.

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