Hydro-Québec should sell its kilowatt at today’s production cost to companies that want to establish themselves in Quebec to benefit from a reliable and green source of energy, believes the author of The state of energy in Quebec.
This is certainly an avenue to consider, according to Pierre-Olivier Pineau, holder of the Energy Chair at HEC Montréal, who is publishing his annual report for the tenth time this Thursday.
Hydro-Québec’s announcement to invest 150 to 180 billion to double its electricity production is one of the significant events of the year in the world of energy, according to him.
Quebec is already a world champion in electricity consumption and it risks retaining this title for a long time by wanting to attract companies that want to decarbonize with its low electricity rates. “We have always carried out economic development with electricity in Quebec and we can certainly become the world’s suppliers for certain products, but I would prefer that we also work to improve energy performance,” says the professor, which goes without saying. in particular by an increase in the price of electricity which would encourage better use of it.
Most companies that want to invest in Quebec are attracted by Hydro-Québec’s industrial rate (5.3 cents per kilowatt hour), much lower than the new production planned by Hydro-Québec to supply them (around 11 cents per kilowatt hour). ), which is possible due to the very low production cost of the oldest hydroelectric installations.
According to the professor, Hydro-Québec should ideally bill electricity at today’s production cost, i.e. its marginal cost, to all its customers to ensure efficient use of the resource.
Given that companies are scrambling to set up in Quebec, this would certainly be a possibility in the industrial sector, according to him. Companies that want to produce their own electricity, like TES Canada, are already ready to pay today’s production cost, which is double Hydro-Québec’s industrial rate, he says.
The latest version of The state of energy in Quebec notes once again that everything can be done to improve the use of energy in Canada and Quebec, says Pierre-Olivier Pineau.
“Not only do we have the lowest energy productivity (i.e. the wealth created per unit of energy consumed) among the countries in the world to which we like to compare ourselves, such as Germany or Norway, but we are the one which has progressed the least “, he laments.
The state of energy in Quebec, which paints a portrait of the energy produced and consumed in Quebec, is in its tenth edition. Even if the energy sector evolves slowly, Pierre-Olivier Pineau is disappointed by the lack of progress. Energy consumption per capita remains one of the highest in the world, he notes. The share of petroleum products in the total energy consumed has remained the same and natural gas has maintained its share and the automobile fleet continues to increase. “I would have liked to see greenhouse gas emissions decrease, as we planned in the 2015 energy policy, but clearly, we are not there,” says the professor.
Make way for SUVs
The car continues to decline compared to sport utility vehicles (SUVs) and light trucks, notes again The state of energy. “The decline in car sales began in 2008 and, if the trend continues, the last combustion car is expected to be sold in 2028.” “The same phenomenon affects electric vehicles: sales of electric trucks now exceed those of cars electrical. This decline of the car in favor of larger and heavier vehicles is problematic in several respects: consumers are buying vehicles that cost more and use more energy than available alternatives. »
Rain of hydrogen projects
If the energy sector has changed little in Quebec over the past ten years, public discourse has evolved. The HEC Montréal Energy Chair notes that there is no longer any question of pipelines or hydrocarbon exploitation. Green hydrogen projects, on the other hand, are emerging almost everywhere in the country. The document lists a dozen, most of them waiting to obtain electricity from Hydro-Québec to be realized. In addition to requiring a huge amount of electricity, the production of green hydrogen costs three times more than traditional hydrogen which is already produced in Quebec from methane reforming.
Energy: 17% of the household budget
Quebec households devote 17% of their budget to energy in all its forms. Direct spending on electricity, natural gas and gasoline totals $14.4 billion annually. More than half of this amount is spent on the purchase of gasoline, and the rest on electricity. Household energy consumption increases with income. The average bill for a household whose income does not exceed $40,000 is $1,085. Households with incomes of $150,000 pay more than double, or $2,114 per year.