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Fitzgibbon on self-generating electricity: “This is only the beginning! »

Natasha Kumar By Natasha Kumar Nov20,2023

This declaration comes at a time when the CAQ government must choose the industrial projects that will be carried out in Quebec. “It’s at odds with Hydro-Québec’s monopoly,” however, believe the experts.

Fitzgibbon on self-production of electricity: “It’s just the  start!&nbsp ;»

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Minister Pierre Fitzgibbon at a press briefing.

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    Among the many industrial projects on Pierre Fitzgibbon's desk, how many large companies will find themselves producing their own electricity like the green hydrogen plant in Shawinigan? If we are to believe the Minister of the Economy, “this is only the beginning,” according to an email obtained by Radio-Canada, comments that raise fears of a breach in Hydro-Québec’s monopoly.

    A few days ago, the CAQ government announced the green hydrogen megaproject in Mauricie from the company TES. Hydro-Québec will allocate it a block of 150 MW of electricity, but TES will also produce 800 MW with a wind farm and 200 MW with solar for its energy needs, what we call self-production.

    However, according to experts and environmental groups, the TES project does not respect the legislation that protects the monopoly of the state company, in particular because x27;it will be carried out in a territory where Hydro-Québec has exclusive distribution rights.

    We are no longer talking about self-production: it is the independent production of electricity which takes place kilometers from the factory. It is at odds with the Hydro-Québec monopoly. The ownership of this park could also change hands and it would become an electricity production contract, worries Jean-Pierre Finet, analyst at the Regroupement des organisms Environnemental en Énergie (ROEÉ), in an interview with Radio-Canada.

    Minister Fitzgibbon affirms on the contrary that the law allows self-production for companies like TES and that the wind turbines of the project will be connected directly to the factory.

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    Presentation of the TES Canada project, in Mauricie, last November.

    But whatever the community's concerns: Quebec has an interest in other self-production projects by manufacturers, noted Radio-Canada.

    In an email sent to several stakeholders, notably environmental groups, Minister Fitzgibbon suggested that the plant in Mauricie is only the tip of the iceberg.

    800,000 tonnes of GHG avoided with 1000 MW of self-production permitted by law, wait and see what is coming. This is just the beginning! he wrote.

    Contacted by Radio-Canada, the minister's office confirmed the growing appetite for self-production while projects industrial companies are struggling with the drop in surplus electricity.

    We hope that other similar projects will take shape. The project is being carried out within the current legislative framework and the nationalization of Hydro-Québec is in no way in danger, underlines the minister's spokesperson, Mathieu St-Amand.

    This intention from Mr. Fitzgibbon comes at a time when industrial projects are piling up on his desk, for total requests of 30,000 MW. How many companies will produce their own electricity?

    Questioned by Radio-Canada, the Ministry of Economy, Innovation and Energy (MEIE) indicated that this is confidential information.

    The experts consulted also wonder about the form that must be completed by companies that have a project of more than 5 MW and want to establish themselves in Quebec. In this one, Hydro-Québec is testing their interest in unregulated rates.

    Is the possibility of a higher, unregulated rate an option for you? asks the state company.

    In the same section, it is also written that the government can apply, by means of a particular contract, a rate which is not regulated by the Régie de l’énergie.

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    Hydro-Québec's form for industrial customers who want to establish themselves in Quebec.

    We have the impression that Hydro has gone fishing for the government. This is all quite nebulous. What do we mean with unregulated rates? Are we opening the door even wider to private production?

    A quote from Jean-Pierre Finet, analyst at the Regroupement des organisms Environnemental en Énergie (ROEÉ)

    Same observation for Jean-François Blain, independent energy sector analyst.

    The government and Hydro-Québec openly promote commercial relationships and territorial use that contravene the law and undermine the distribution monopoly resulting from nationalization. The only objective of the CAQ is to accelerate the privatization of the electricity sector, he stressed.

    Questioned by Radio- Canada, Hydro-Québec and the MEIE provided us with exactly the same response.

    The question has been in the form since spring 2022. This was initially asked to promoters to find out the flexibility of customers in relation to the different rates. Hydro-Québec cannot grant rates other than those determined by the Régie de l'énergie, we were told.

    Called to To clarify, the MEIE admitted that this is an exploratory question. Hydro-Québec will withdraw it soon, the ministry wrote to us.

    One ​​thing is certain: during consultations on the supervision and development of clean energies in Quebec, the question of private production was raised several times.

    In the final report, it was added that in the context of strong growth in electricity demand, it would be good to open the possibility to other models such as self-production, private electricity purchase contracts (Corporate Power Purchase Agreement).

    Minister Fitzgibbon must regulate the development of green energies in a bill which will be tabled next February.

    However, this possibility of seeing more private electricity generation coming from outside a company's land (up to 30 kilometers from the factory site in the case of TES) is denounced by environmental groups.

    While Hydro-Québec customers will see their rates increase in the coming years due to costs increasing supply, TES and other self-producers will escape the contribution and cost of decarbonization of the Quebec economy, believes Mr. Finet.

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    Patrick Bonin, responsible for the Climate campaign -Energy for Greenpeace Canada. (File photo)

    Everything we feared about greater openness to the private sector is coming true. We have no demonstration that the private sector would be better. The government has never held public debates on energy and, without consultation, it is giving our wind and our sun to the private sector, without planning.

    A quote from Patrick Bonin, responsible for the campaign Climate-Energy for Greenpeace Canada

    Another expert, Pierre-Olivier Pineau, professor in the decision sciences department at HEC Montréal and holder of the Chair of Energy Sector Management, is in favor of the end of the electricity monopoly.

    It is no longer up to Hydro-Québec to produce, to take responsibility for production planning. If people want to produce electricity, I believe they should do it. there are technologies that exist. I'm not saying it's the Wild West: it will take authorizations, he believes.

    I would go even further: if a self-producer wants to sell me electricity, I don't see why I shouldn't buy some! There is no question of selling Hydro-Québec. But if I put solar panels on my roof and my neighbor wants to buy them [electricity], why shouldn't I have the right to sell them to him? he asks himself.

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Natasha Kumar

By Natasha Kumar

Natasha Kumar has been a reporter on the news desk since 2018. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining The Times Hub, Natasha Kumar worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my 1-800-268-7116

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