It is time to reflect on the pricing of electricity consumption by industrial players, believes the president and CEO of Hydro-Québec, Sophie Brochu. The state corporation will not be able to offer the same rate indefinitely without “digging a financial hole”.
Due to hydroelectricity’s smaller environmental footprint, Hydro-Quebec is experiencing unprecedented industrial demand, Ms.me Brochu during a speech before the Council on International Relations of Montreal (CORIM), Monday.
She mentioned that the electrical production capacity for the industrial sector in Quebec was 8,500 megawatts (MW), compared to 5,000 MW for Ontario. “Today, there are over 10,000 MW of people who want to come and settle in Quebec. Big projects, 100, 200, 300 MW. In the last ten years, not a single 50 MW project has come to Quebec. »
This request comes at a time when the state company estimates that it will need new electricity supplies from 2027. These new sources of supply are also expected to cost more. Quebec will need an additional 100 terawatt-hours (TWh) of energy if the province wants to achieve carbon neutrality by 2050, according to Hydro-Quebec’s 2022-2026 strategic plan unveiled at the end of March.
The cost of the heritage block is 3 cents per kilowatt hour (kWh). The average cost of post-heritage supplies will average 11 cents. “If we buy supplies at 11 cents and we have an industrial rate of 5 cents, well, that doesn’t work,” said M.me Leaflet.
It will be up to the government to decide whether it is worth selling electricity at a loss in certain cases by taking into account the economic spinoffs of a project, such as innovation, job creation or tax spinoffs, specifies she.
Questioned on the subject at the beginning of the month, the Minister of the Economy, Pierre Fitzgibbon, had mentioned that it would inevitably be necessary to prioritize industrial projects in Quebec due to the tightening of electricity surpluses.
“Some projects perhaps in the future will not see the light of day because the allocation of hydroelectricity would be more beneficial for Quebec to put it elsewhere, he said. This is clearly an issue that must be addressed. »
Quebec intends to prioritize two areas for projects requiring high energy consumption: greenhouse gas reductions and the creation of collective wealth, the minister explained. The electrification of transport, hydrogen, the battery sector, aluminum and green steel are among the industries that are “consistent” with these priorities.
However, we must question the relevance of selling our electricity at a low price, said the manager at a press briefing on the sidelines of the event. “We don’t want to stay in the paradigm of ‘we don’t sell at a high price’ knowing that our marginal supply costs are much higher than our historical costs so we won’t dig a financial hole for life”, she underlines .
Hydropower has environmental benefits that justify higher billing for businesses, she said. “If you’re able to sell a product and you’re able to sell it for more because you’re clean, that means you’re able to pay more for your electricity because it’s clean. »
Hydro-Québec will not decide on the rates paid by companies, shade Mme Leaflet. It is a societal decision. “It’s not what I think that’s important, it’s what Quebecers will think,” she said in an interview. Our job is to provide the facts. »