While China’s electricity sector is booming with coal-fired power, Quebec, Canada, the province that produces North America’s cheapest power, faces an energy shortfall after years of marketing its hydroelectric power to U.S. states and providing industry with low electricity rates. Hydroelectric power from Canada has been imported to the U.S. Northeast to help supply power there. Quebec is now realizing that it will not be able to produce enough electricity by harnessing the flow of moving water from existing facilities. The province would either need to build more dams or temper its economic policies that depend on the resource. Building more dams would help address Hydro-Quebec’s anticipated shortfall, but such a move would draw criticism from environmentalists and Indigenous groups. Dam projects typically require flooding vast areas, which create methane emissions from decomposing trees and other organic material and some allege has drowned thousands of caribou.
Fast Facts:
- While China’s electricity sector is booming with coal-fired power, Quebec, Canada, the province that produces North America’s cheapest power, faces an energy shortfall after years of marketing its hydroelectric power to U.S. states and providing industry with low electricity rates.
- Quebec’s cheap hydroelectric power has also lured miners and manufacturers to the province to build a domestic supply chain for electric vehicles.
- Hydro-Quebec, the government-owned utility, estimates it needs more than 100 terawatt-hours of additional electricity — more than half its annual generating capacity — to reach the province’s goal of being carbon neutral by 2050.
Quebec’s cheap hydroelectric power has also lured miners and manufacturers to the province to build a domestic supply chain for electric vehicles. Only a few years ago, the electricity needed to build a mine was guaranteed, but today, there is not enough power for all the projects that invested in the province. According to Sayona Mining Ltd., which just restarted a lithium mine in Quebec, there is not enough electricity in the Canadian province to power the region’s mining projects. The Australian company restarted its Quebec lithium mine in March after jointly investing $100 million into the project with Piedmont Lithium Inc. The project plans to ramp up lithium production over the coming year and ship the lithium to South Korean battery maker LG Chem Ltd. and automaker Tesla Inc.
Hydro-Quebec, the government-owned utility, estimates it needs more than 100 terawatt-hours of additional electricity — more than half its annual generating capacity — to reach the province’s goal of being carbon neutral by 2050. Premier Francois Legault pitched Quebec as the “green battery” of the northeastern region of North America, building on its reputation of supplying electricity to New England and New York for decades while wooing industry with cut-rate power. As it turns out, its future availability may be in doubt.
Hydro-Quebec sells cheap, reliable and renewable energy. But, as many want access to it, the utility does not have the ability to infinitely replicate its hydroelectric generation assets. To meet demand, Hydro-Quebec needs to refurbish power plants and add wind farms in the next decade, while also considering building new dams and transmission lines. The utility recently identified its first potential dam site for Petit Mecatina River in a remote region of eastern Quebec.
Hydro-Quebec accounted for about five percent of government-generated revenues last year, contributing $6 billion to provincial coffers. Hydro-Quebec’s future power commitments include long-term contracts to deliver an additional 20 terawatt-hours each year to the U.S. northeast when the Champlain Hudson Power Express and another project, the New England Clean Energy Connect, get built. The export contracts and a lack of added capacity could cause Hydro-Quebec to struggle to meet future demand, deterring new customers.
Quebec also attracted large-scale power users including General Motors Co. and Amazon.com Inc. Energy requests from such industrial and commercial consumers now represent as much as half of Hydro-Quebec’s generating capacity, boosting tensions with residential users who are already being encouraged to conserve energy.
Hydropower is the top global source of renewable energy and supplies one-sixth of the world’s electricity, according to the International Energy Agency. Dams on rivers are often used to create hydroelectricity, with flowing water turning turbines to generate energy in power plants. Hydroelectric capacity is expected to grow this decade, though environmental requirements and lack of investment funds are slowing project developments in China, Latin America and Europe.
Conclusion
Quebec province in Canada used to be awash with hydroelectric generation. But, between exporting it to the U.S. Northeast and luring companies to its province with cheap power, it now finds itself short on carbon-free electricity to meet future demands. Either it needs to build more dams and infuriate environmentalists or switch to other politically correct sources such as wind, which are inherently intermittent. The province has lured critical mineral mining companies, such as those that mine for lithium needed for electric vehicle batteries, because of its cheap hydroelectric power. However, now those companies are being skeptical of the province being able to deliver. To be competitive with China’s cheap and growing coal-powered generation, countries will need inexpensive power, which is not the case with intermittent and politically correct wind and solar power that require expensive batteries for back-up.
New England and New York State have chosen to import electricity from Quebec rather than building their own sources. But that may need to change as businesses are starting to take note.
