Hydro-Québec plans to massively ramp up investment over the next 12 years to boost production capacity, improve energy efficiency and significantly reduce power outages as individual and industrial demand in the province skyrockets.
Canada’s biggest electricity producer will need to spend $155 billion to $185 billion by 2035 to carry out its action plan, new chief executive officer Michael Sabia said Thursday. At around $16 billion, the annual investment budget represents up to four times the current average, Hydro-Québec said.
Hydro-Québec now projects electricity demand in Quebec will double by 2050, which means that up to 200 terawatt-hours of extra capacity will be required by that point to satisfy customer appetite. To get there, Hydro-Québec estimates it will need to expand annual generating capacity by 8,000 and 9,000 megawatts in the next 12 years.
Despite the additional expense, Hydro-Québec insists electricity rates will remain “affordable.” Residential rates will be limited to inflation, up to a ceiling of three per cent, the utility said, while commercial and industrial rates will “remain competitive.”
The projected $185-billion budget allocated to new investments includes up to $110 billion to meet demand growth, up to $50 billion to ensure service reliability and quality, and up to $25 billion in additional operating expenses. Hydro-Québec will need to hire an average of 35,000 people each year to help it carry out the plan.
Service reliability will be a key area of focus. As one of the worst years for blackouts since 2008 draws to a close, Hydro-Québec said it plans cut power outages by 35 per cent over the next seven to 10 years. The projected annual spend of $4 billion to $5 billion is double the investment made in network sustainability in the last three years.
About 5,000 kilometres of transmission lines will be built by 2035.
Up to 4,200 megawatts of new hydropower capacity will be added by 2035 by increasing the capacity of existing generating stations and building new dams, Hydro-Québec said, without providing specifics. The company also plans to triple wind-power generation by integrating more than 10,000 megawatts of wind capacity into the grid.
Hydro-Québec will also explore the potential of other energy options, “taking all tested and emerging solutions into consideration.”
Increased energy savings for customers are expected to free up 3,500 megawatts of additional capacity by 2035, Hydro-Québec also said.
Three-quarters of new electricity generation will be dedicated to decarbonizing the environment, according to the company. By 2034, 40 per cent of the additional electricity will be used to electrify transportation and to decarbonize the heating of buildings.
Sabia, a former CEO of the Caisse de dépôt et placement du Québec and BCE Inc. who most recently served as federal deputy minister of finance in Ottawa, officially took over in August. He succeeded Sophie Brochu, who left the state-owned company April 11 after less than three years at the helm.
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