The utility should improve getting old infrastructure amid elevated demand whereas enjoying its strategic function within the province’s decarbonization efforts.
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Hydro-Québec has lengthy been the crown jewel of the sociétés d’état created in the course of the Quiet Revolution.
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It has performed a important function in making Quebecers “maîtres chez nous.” Most people typically views it with pleasure.
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The utility can be a money cow that contributed a whopping $3.4-billion dividend to public coffers final yr, whereas charging Quebecers the bottom electrical energy charges in North America. Because the world seeks to wean itself off fossil fuels and transition to wash vitality to sort out the specter of local weather change, Hydro-Québec has grow to be a strategic asset.
However the state energy monopoly can be at a crossroads. Its subsequent chief, by all accounts Michael Sabia, can have his work reduce out for him.
Hydro-Québec is, after all, the centrepiece of the federal government’s plans to decarbonize the province by 2050. The electrification of transport, together with the phasing out of heating oil, are essential for assembly these goals. However greater than that, the Quebec authorities additionally sees a possibility on this international inexperienced shift to draw funding and promote financial progress — utilizing low-cost, clear hydro energy as a draw.
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The one hitch: Quebec’s vitality surplus is projected to fizzle out by 2026, and it’ll want an estimated 50 per cent extra capability on the best way to carbon neutrality to fulfill rising home demand whereas additionally honouring not too long ago inked worldwide contracts to provide electrical energy to New York Metropolis and Massachusetts.
The federal government of Premier François Legault has raised the spectre of constructing new hydro dams. However the environmental and social acceptability of diverting rivers and flooding habitat may be extra elusive right this moment than in previous a long time, amid rising consciousness of ecology and Indigenous rights.
In the meantime, the Churchill Falls power-sharing deal signed with Newfoundland and Labrador expires in 2041 and have to be renegotiated. Quebec depends on Churchill Falls for 15 per cent of its electrical energy. This course of will take some delicacy, as Newfoundlanders really feel cheated by the extraordinarily advantageous phrases Quebec solid in 1969. Legault has already made overtures to ink a brand new settlement sooner, if Quebec can safe beneficial charges.
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A violent microburst in Might 2022, together with April’s harmful ice storm, led to vital energy outages that highlighted each the fragility of Hydro-Québec’s getting old community and the vulnerability to excessive climate occasions, which may grow to be extra frequent because of the local weather emergency.
Quebecers additionally have to withstand the very fact they’re the greatest per capita shoppers of electrical energy in Canada, sucking up 60 per cent greater than the nationwide common. That’s due partly to industrial operations like aluminum smelters and since a better proportion of Quebecers warmth their properties with electrical energy. However low charges have nonetheless made individuals wasteful. Hydro-Québec and the Legault authorities have began elevating the problem of “vitality sobriety,” however getting Quebecers to just accept they might should pay extra and/or use much less of this treasured useful resource might be a tricky promote.
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Sabia ran the Caisse de dépôt et placement du Québec for 10 years, rescuing the pension fund from the monetary disaster, tripling its portfolio and broadening its worldwide investments. Earlier than that he helmed CN and Bell; since then, he has been deputy minister of finance in Ottawa.
Sabia has a confirmed observe file strengthening and solidifying one other pillar of contemporary Quebec. However it is going to take all of his formidable expertise, acumen and expertise to information Hydro-Québec into an period the place its mission is extra essential than ever.
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