Could this be the beginning of the end of cheap electricity in Quebec?

5 août 2013

Ce billet est disponible en anglais seulement.

Last month, Quebec launched a public consultation process on energy issues and struck a commission co-chaired by a university physics professor and a retired Hydro-Quebec planning vice-president to consider new energy policy. The commission will hold public hearings across Quebec from September 4 to October 9, and is expected to deliver a report in late 2013 or early 2014.

Clues as to the commission’s goals and priorities are contained in the consultation paper that was published as an aid to the process (available in both French and English). The document is engaging and informative, and describes in plain language the current energy situation.

Not a Culture of Conservation

Quebec, like Canada, is one of the world’s big per capita consumers of energy, more so than the U.S. While harsh winters and low population density are often invoked as justification, the fact is that Scandinavian countries with comparable standards of living, climate and geography use far less energy. Quebec regularly benchmarks against the Nordic social-democracies and wants to emulate them.

Quebec’s energy mix is roughly 53 percent fossil fuels and 47 percent renewables. In relative terms, this compares favorably with much of the world. In absolute terms the comparison is less flattering.

Due of its high per capita energy consumption, Quebec emits large quantities of GHGs. The province wants to change this and in doing so ground its energy policy on the twin principles of energy efficiency and clean energy.

At a time of large hydro-electrical electricity surpluses, Quebec wants its population and industry to invest in energy efficiency and reduce consumption. This is easier said than done.

Quebec does not have a culture of energy conservation or of sacrifice when it comes to energy. In fact, per capita oil consumption in Quebec is currently growing at a faster pace than the population, notwithstanding continuous improvements in automobile fuel efficiency.

Quebec’s task is made all the more difficult because Hydro-Quebec, the state-owned electricity company with a virtual monopoly, cannot send price signals to consumers. Electricity prices in Quebec are low and the electorate views this state of affairs as an entitlement. Beware the politician who proposes steep increases!

Big Changes Coming?

Ultimately, the government is trying to get public buy-in for the following: (i) GHG reductions; (ii) the use of electricity surpluses to electrify public and private transportation; (iii) energy efficiency in industry and commerce; (iv) the development of new renewable energy production methods; (v) the development of Quebec’s oil resources; (vi) greater development of knowledge industries; and (vii) the adoption of an holistic approach to urban development.

This is a very ambitious agenda and one that, if adopted and implemented, will mean big changes for Quebec, including:

  • The end of “Big-Hydro” construction as an economic development tool. This may explain in part why the government is keen to resurrect Hydro-Quebec International so as to assist Quebec’s engineers and builders secure replacement markets.
     
  • The end of cheap electricity as an inducement for foreign investors. Quebec has nine of Canada’s ten aluminum smelters and is the world’s fourth largest producer. Most of Quebec’s aluminum capacity was built in the ‘70s and ‘80s, during another period of large electricity surpluses.
     
  • The end of unbridled urban sprawl around Montreal and Quebec City. Interestingly, it was the Parti Quebecois in 1978 that adopted Quebec’s first law to protect agricultural lands and slow urban sprawl.
     
  • The end of oil imports, including from the rest of Canada. This objective will not be reached for decades and is thus unlikely to affect current efforts to connect by pipeline Alberta with Quebec and New-Brunswick refineries.

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