Quebec government unprepared for end of electricity surplus, says MEI

• With its current facilities, Hydro-Québec will have exhausted its surpluses in both energy and capacity by 2027.
• The intermittency of wind turbines limits their power contribution.
• Commissioning a new dam would take about 15 years.

Montreal, May 11, 2023 – The end of Quebec’s electricity surplus is fast approaching, but the solutions proposed by the government are either too little or too late, concludes a study published by the Montreal Economic Institute this morning.

“When we talk about electricity, we’re really talking about two things—energy—what we can produce over the course of a year—and power—the maximum we can produce at any given time,” says Gabriel Giguère, public policy analyst at the MEI and author of the study. “Hydro-Québec is heading towards a shortage of both as early as 2027, which complicates the problem.”

After 2027, Hydro-Québec’s existing facilities will be insufficient to meet the anticipated demands for both energy and power. Though a number of wind projects have been proposed, the study indicates that they are unlikely to be commissioned in time to offset the end of the surplus.

The government is promoting three approaches to handling the problem: building or upgrading dams, erecting wind turbines, and reducing consumption by improving energy efficiency.

As far as dams are concerned, the estimated timeframe for any upgrading exercise runs from 2028 to 2035, multiple years after the expected end of the energy surplus. The author also notes that it would take about 15 years for any new dam to be commissioned.

With regard to wind power, the study explains that the intermittency of wind generation means that the power supplied attains only 35 per cent of the installed capacity. Also noted is that the Régie de l’énergie’s environmental approval of these projects is far from guaranteed.

With respect to improving energy efficiency, the study identifies real limitations, particularly concerning the power issue, since consumption at peak times is requiring more and more power.

“Everything Quebec is proposing to deal with the end of the energy surplus is either too little, too late, or a bit of both,” says Giguère. “If nothing changes, rather than Hydro-Québec being a tool for economic development, as the government has historically seen it, the Crown corporation will become a limiting factor instead.”

The author points out that natural gas has the potential to play a key role in preventing the end of electricity surpluses from turning into shortages of energy. He cites the example of the Bécancour natural gas-fired power plant, which can meet peak demand by adding 550 megawatts to the grid.

He also highlights the contribution that natural gas can make to the supply of energy for industry, or for heating—two areas that are major consumers of power from our electrical grid.

“Given the certainty with which we know that Quebec is heading towards a shortage of electricity, it would be irresponsible to shut the door on any other type of energy,” explains Giguère. “Natural gas represents an effective back-up solution that is available in Quebec, and that allows us to fulfil the needs that Hydro-Québec cannot.”

You can consult the MEI publication here.

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The MEI is an independent public policy think tank with offices in Montreal and Calgary. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship. 

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