Sell the wind, kill Hydro-Québec on the altar of the private sector

Self-generation and the risk of skyrocketing electricity rates

In January 2018, Hydro-Québec CEO Éric Martel said, "if people start self-generating with solar, it's going to cause electricity rates to skyrocket: that's the risk of “ the death spiral ". His logic was as follows: if some customers start self-generating, that means fewer customers to share the bill for Hydro-Québec's fixed costs. Increased costs would become inevitable, pushing more customers to opt for self-generation. A downward spiral of customer attrition and economic death would follow.

Industrial self-production

By 2024, it's industrial self-generation that threatens Hydro-Québec's profitability and could lead to a death spiral. This is the direction advocated by Minister Fitzgibbon, and it's what's happening right now with the industrial project. TES Canada in Shawinigan which intends to produce hydrogen. This private company is proposing to erect 140 mega-wind turbines on farmland within a 60 km radius of the plant: it becomes a self-producer to meet its own energy needs. Such an installation alone could produce almost half a Roman, or 800 MW, enough to power 235,000 homes.

The death spiral? What are we talking about? Hydro-Québec's operating costs are fixed, and massive investment will be needed to update the power grid. We're talking about 50 Billion only for the installation of new high-voltage lines. And Hydro-Québec's customers are likely to be saddled with a hefty bill, as they have to absorb the rising costs of new generation, maintenance of the network which suffers from a chronic lack of investment, not to mention the impact of extreme weather events on the grid. These costs would no longer be shared with this independent self-generating clientele, unfairly placing the economic burden of Hydro-Québec's viability on the shoulders of the public.

Now look at the big picture: if large companies turn to self-generation, who will foot the bill for the future?

Rio Tinto Alcan's self-production model

The model set by Pierre Fitzgibbon, Minister of the Economy, Innovation and Energy, is the Lac Saint-Jean-based company Rio Tinto ALCAN, which obtained the privilege of building dams on the Saguenay and Péribonka rivers, without paying any compensation to the State. Today, Rio Tinto ALCAN produces much of the electricity needed for its aluminum production with seven dams on the Saguenay and Péribonka rivers.

Minister Fitzgibbon recently authorized multinational Rio Tinto ALCAN to build its own wind farm to meet all its electricity needs. These are mega wind turbines of 5 MW or more on the best wind deposits in the region. Rio Tinto ALCAN's wind turbines are coupled with its existing river mining operations, the ultimate means of guaranteeing the energy autonomy of this huge mining multinational. It's important to realize that without coupling with Quebec's hydraulic capacity, none of these projects is viable.

Balancing wind power by damming new rivers

Industry needs constant electricity production. By definition, wind power is variable. So a predictable source is needed to compensate for wind variations, and hydroelectric power plants provide this stability. And with power plants already stretched to capacity to meet demand, we can expect industrial pressure to build new dams to soar in the years ahead. Hydro-Québec will have to compensate for power fluctuations with its existing reservoirs, or harness new rivers nearby to compensate for power fluctuations from wind power.

Denationalization of Hydro-Québec

We're talking about the creation of mega-wind farms that extend over vast territories, with the potential to supply energy to neighboring industries. These multinationals would then have their own industrial distribution networks parallel to that of Hydro-Québec. Our state-owned company would be obliged to supply blocks of energy at very low cost to industry from existing reservoirs, while buying back surplus electricity from industrial wind farms at high prices during peak winter periods, when winds are strong. To add insult to injury, these companies could compete with Hydro-Québec. Not surprisingly, Hydro-Québec's employee unions are sounding the alarm, denouncing a move that could lead to the company's demise. denationalization of electricity in Québec.

That's what we're seeing with TES Canada's private hydrogen production project in the Mauricie region, whose business model is denounced by experts who believe that Hydro-Québec is the big loser in the equation.

30,000 MW of industrial demand

For 30,000 megawatts of industrial projects on Minister Pierre Fitzgibbon's desk, i.e. nearly 75% of the total current electricity consumption of 42,000 MW. Why is that? Because we offer some of the lowest electricity rates in the world, attractive government consumer financing programs and incentives for research and job creation.

In Quebec, this discounted energy is only for industry. For the industrial world, our electric power may be among the cheapest in the world, but our leaders are even prepared to cede territory for autonomous production. We even offer additional subsidies to industry to stimulate investment. Industrial consumption should be targeted as the sector with the greatest capacity to contribute to Hydro-Québec's revenues, but the bill continues to be passed on to consumers.

Obviously, it's impossible for Hydro-Québec to meet such unbridled demand, when it has to support the decarbonation of the economy. It's obvious that former Hydro-Québec CEO Sophie Brochu left at the same time as Fitzgibbon caused Hydro-Québec's industrial order book to explode. And naturally, since it's impossible for Hydro-Québec to keep up with demand, we have to turn to private production.

Don't kill the wind energy industry

The best wind farms located close to transmission lines and industrial production sites are offered to private enterprise. These sites are often located in populated and agricultural areas. The result will be a charred territory, farmland sacrificed and landscapes scarred by the anarchic development of private wind farms. To hell with wind power's true potential for decarbonization: we're left with a wind power industry that's burnt out for lack of social acceptability.

"The result will be a territory butchered, farmland sacrificed and landscapes scarred by the anarchic development of private wind farms. To hell with wind power's true potential for decarbonization: we're left with a wind power industry that's burnt out for lack of social acceptability. "

Are we not currently witnessing the implementation of a "accelerated death spiral for Hydro-Québec".? Industries turn to industrial self-generation and leave Hydro-Québec's order book. Hydro-Québec will have fewer industrial customers and will have to raise its prices. This will lead even more industries to jump ship and demand self-generation.