ECONOMIC 2035 Hydro-Québec Action Plan: Québec Is Ramping Up Its...

2035 Hydro-Québec Action Plan: Québec Is Ramping Up Its Energy Transition Efforts – Oil, Gas & Electricity

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As awareness of the climate emergency continues to grow amid
events such as the record heat waves seen in the summer of 2023 or
the series of devastating wildfires, many countries are stepping up
their investments in the energy transition with a focus on clean
energy sources. Despite its favourable position thanks to its early
adoption of hydroelectric power, Québec does not intend to
rest on its laurels: the province plans to ramp up its efforts to
achieve carbon neutrality by 2050.

Hydro-Québec’s recently published Action Plan
2035: Towards a Decarbonized and Prosperous Québec
(the
Action Plan) is aligned with those efforts insofar as this
Québec government corporation plays a pivotal role in terms
of the province’s decarbonization and economic stimulus
plans.

For Hydro-Québec, decarbonization will require a major
push towards electrification, which means significantly higher
electricity demand. By 2035, Hydro-Québec plans to add 60
TWh (between 8,000 and 9,000 MW) of additional power.

The goal is to tackle two major challenges: completing the
energy transition and meeting consumers’ needs. This ambitious
project is divided into five priority areas summarized below.

Priority #1: Improving service quality

Climate change is putting the resilience of
Hydro-Québec’s facilities to the test, requiring
investments to be increased to ensure reliable service.
Accordingly, the Action Plan aims to reduce outages by 35
per cent in the next 7 to 10 years
, with
investments of $45 to $50 billion by 2035 aimed in
particular at strengthening the power grid and addressing
vegetation issues. That represents investments of $4 to $5 billion
per year on average, nearly double the level of long-term
investment over the past three years.

Hydro-Québec also plans to speed up the processing of
electricity connection requests while improving the consumer
experience. The main goal is to offer a service that is more
reliable, straightforward and affordable.

Priority #2: Encouraging energy efficiency

Hydro-Québec also commits to encouraging more efficient
electricity consumption. The objective is to double its
customers’ energy savings by 2035, freeing up 1,600 to 1,800 MW
of additional power (for a total of 3,500 MW).
This will
help meet growing electricity demand. Initiatives include creating
a dedicated team to offer personalized advice to all clients,
financial incentives for the installation of high-efficiency
equipment and flexible rate options aimed at shifting consumption
outside of winter peak periods.

Despite these investments, Hydro-Québec is pinning its
hopes on a more flexible rate structure, under which increases for
residential customers would be capped at 3 per cent. For industrial
and commercial rates, the focus will be on maintaining
Québec’s competitive position.

The overriding objective is to raise awareness of more efficient
consumption and to create incentives to achieve these goals.

Priority #3: Increasing the power generation capacity

Recognizing that optimized and reduced consumption will not be
enough to meet growing electricity demand during the energy
transition, Hydro-Québec plans to increase its
production capacity significantly
by continuing to focus
on hydroelectricity, wind power and exploring other options.

Commitments include tripling its wind power production capacity
to meet needs totalling 1,500 to 1,700 MW. Hydro-Québec aims
to incorporate more than 10,000 MW in new wind power capacity by
2035. This additional capacity represents more than $30 billion in
private and public investments.

Hydroelectric power will complement wind power production as
well. Plans for improved hydroelectric power production include
increasing the power of existing generating stations by 3,800 to
4,200 MW and the development of new hydropower facilities,
including pumped storage facilities. Investments totalling $35 to
$45 billion are planned to provide additional hydroelectric
capacity.

Emphasis will also be placed on solar energy and battery
storage. In addition, there is the possibility that TransCanada
Energy’s existing thermal power plant may be converted to
renewable natural gas to meet peak periods needs.
Hydro-Québec also plans to explore other emerging energy
sources worldwide and is even mulling its nuclear power
options.

To maximize access to this new output, investments
totalling $45 to $50 billion are expected in the transmission
network
, with more transparent planning enabling market
actors to better organize their own activities as they will know
which areas have available capacity. Hydro-Québec’s
President and CEO, Michael Sabia’s recent speech to the Chamber
of Commerce of Metropolitan Montreal discussed the construction of
approximately 5,000 km of transmission lines. On
average,
investments aimed at meeting additional
power demands range from $7 to $9 billion per year for the required
assets in terms of production, transmission and
distribution.

Priority #4: Partnering with Indigenous communities

Having acknowledged the impacts of past projects on Indigenous
territories, Hydro-Québec commits to achieving economic
reconciliation with the First Nations and the Inuit. Related
efforts include creating financial partnerships aimed at
facilitating the economic participation of Indigenous communities
in new energy projects during all phases, from design to
operation.

Priority #5: Becoming an agile, innovative and transparent
organization

To reach the goals of decarbonization and economic growth,
Hydro-Québec recognizes the need to transform its methods.
Commitments include creating a center of expertise in collaboration
with the Government of Québec to draw up a roadmap,
collaborating with external partners to rapidly integrate
innovations with a view to achieving its ambitions faster, and
streamlining its practices and governance.

All told, these ambitious commitments to implement the Action
Plan add up to between $155 and $185 billion by 2035 (an
average of $12 to $16 billion per year
). These investments
are expected to generate major economic benefits for Québec,
mobilizing an estimated workforce of 35,000 construction
workers.

According to Hydro-Québec, adjustments to the legislative
and regulatory frameworks will be necessary to facilitate the
energy transition, particularly towards more flexible energy supply
processes and simplified processes for granting government permits.
A targeted dialogue with stakeholders, including Indigenous
communities, municipalities, energy sector experts and other
stakeholder groups (business, unions, environmental and
construction sector), as well as with consumer representatives,
will take place from November 2023 to March 2024. The findings will
be presented in the spring of 2024.

Hydro-Québec’s Action Plan 2035 and the accompanying Highlights sheet are both available
online.

Read the original article on
GowlingWLG.com

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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