Hydro-Québec in a good position

Hydro-Québec has just announced that the State of New York has chosen it, with its American partner Transmission Developers, for the delivery, for 25 years from 2025, of 10.4 terawatt-hours (TWh) of electricity, equivalent to the electricity consumption of approximately one million American households. This project, called Champlain Hudson Power Express (CHPE), is in addition to the agreement signed with Massachusetts for the supply of 9.45 TWh for 20 years.

To give an idea of ​​the scope of these contracts, they together represent a little more than 60% of the volume of Hydro-Québec’s net exports in 2020, a short year, or 55% of the peak of the last five years, which reached 36.1 TWh in 2018. Last year, exports accounted for 15% of Hydro-Québec’s electricity sales and 23% of its profits.

Sales to the United States are mostly done through the short-term market, whose prices are not particularly attractive these days when compared to what they were in the mid-2000s. one of the reasons why these two long-term contracts present an excellent opportunity for Hydro-Québec. The two projects each include a new interconnector that will allow more electricity to be sold in the United States.

It is also a way of giving a distinct value to its green energy, which the short-term market, which puts the crown corporation in direct competition with operators of thermal power stations, does not allow it to do.

Pursuing the same general objectives as Massachusetts, namely the decarbonization of its energy supplies, the State of New York, of which 85% of its electricity comes from fossil fuels, plans to increase to 70% the share of renewable energies (hydroelectricity). , mainly wind and solar) by 2030.

At the time of the announcement, some swelling was in order. Hydro-Quebec spoke of a “huge climate gain” and the withdrawal of the equivalent of 44% of vehicles circulating in New York. It’s a possibility, but it’s a long-term perspective.

The crown corporation cannot increase its production capacity overnight. This means that, initially, Hydro-Québec will have to reduce its sales on the market in the short term, while the American operators of thermal power stations, now deprived of sales in Massachusetts and in the State of New York, will fill this gap. The effect on greenhouse gas emissions will therefore be limited. But in the longer term, since new inputs of renewable energies should materialize, thermal power plants will have no other choice but to cease their activities.

The CEO of Hydro-Quebec, Sophie Brochu, indicated that the construction of a new hydropower plant is not being considered to meet these new obligations and the future energy needs of Quebecers. How will we get there otherwise? The question is there. An artistic vagueness persists that the CEO and the Legault government have a duty to dispel.

According to its assessment, Hydro-Québec is currently able to serve four million households in export markets, which would bring its maximum capacity to some 40 TWh, or just over 10% of the peak volume. of exports reached three years ago. The state-owned company has issued new tenders for power from various renewable sources for 480 MW and 300 MW of wind power. There are also energy efficiency programs and the optimization of current equipment. But the mouthful of 20 TWh, or two million American households, is still big if Hydro-Quebec does not reduce its other sales in the United States.

In addition, the new interconnection lines (especially if the northeastern United States are building more) could offer Hydro-Québec the opportunity to play a role of “green battery” by storing electricity. intermittent energy produced by wind and solar south of our border, as a study by MIT’s Center for Energy and Environmental Policy Research suggests.

We are far from the project of “Baie-James du XXIe century “that Francois Legault dangled while in opposition, considering sharing ownership of new dams in Quebec with neighboring US provinces and states. The contracts signed recently are more orthodox, and that’s good. The Crown corporation will be able to participate in the decarbonisation of our neighbors, which is highly desirable, without sacrificing – and this is necessary – the interests of the entire population of Quebec.

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