Quebec companies could face energy shortages for next 10 years: Fitzgibbon

Energy availability has emerged as a major issue as Quebec tightens approval criteria amid soaring industrial demand.

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Quebec doesn’t have enough electricity to satisfy all the companies wanting to carry out industrial projects in the province, Energy Minister Pierre Fitzgibbon says — and the situation could drag on for a decade.

Fitzgibbon is scheduled to announce on March 31 which large industrial projects the government has selected. Key criteria include economic and regional development benefits, environmental and social impacts and the effects on the provincial power grid.

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Energy availability has emerged as a major issue for companies in recent months after Quebec tightened approval criteria for new projects in 2023 amid soaring industrial demand. Under the new rules, any project requiring at least five megawatts of power must be approved by the provincial government. Until last year, the threshold was 50 megawatts.

“When I look at small businesses and large companies, people realize that there will be an energy shortage for probably about a decade. As a result, we need to be parsimonious in the way we consume energy,” Fitzgibbon said Friday during an event hosted by the Chamber of Commerce of Metropolitan Montreal.

“The bad news is that right now, I have on my desk interesting projects for 10,000 megawatts of power,” the minister added. “In the short term, unfortunately, we don’t have these megawatts so we’re going to have to make choices. We’re going to be parsimonious. The contribution of a project to the fight against climate change will be one of the criteria. So that’s the bad news: we’re going to run out of electrons.”

The projected shortfall isn’t enough to deter industrial users, Fitzgibbon insists.

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“The good news is that a lot of companies I’m talking to, both foreign and local, are saying they’re ready to wait,” he said. “They want green energy at a reasonable price. They’re ready to wait and to be more efficient.”

Demand for power in Quebec has set new highs in recent years, hitting 43,000 megawatts in March 2023, the minister said. That’s higher than Hydro-Québec’s installed capacity, which totalled about 38,000 megawatts at the end of 2023.

“If we can reduce this peak, there will be more power available,” Fitzgibbon said. “Companies are saying maybe they’ll self-produce a little bit of energy, maybe they’ll change their manufacturing processes or maybe they’ll remove themselves from the network in January. In the past, these discussions did not exist.”

Companies “are prepared to wait four or five years,” the minister added. “It’s not the end of the world because we’re going to have a fertile environment for projects in Quebec.”

Hydro-Québec is months into a 12-year, $185-billion plan to boost capacity by up to 9,000 megawatts and significantly reduce power outages. About 99 per cent of the energy that the utility produces is classified as clean.

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Fitzgibbon also said he’s weeks away from unveiling a bill on the framework and development of clean energies. The new law comes as Quebec works to develop an electric battery industry following the announcement last fall that Sweden’s Northvolt AB would build a multi-billion-dollar plant on Montreal’s South Shore.

“To realize these projects in record time, we’re going to need to review all our processes. We need to modernize the sector’s legal and regulatory framework,” Fitzgibbon said. With the new law, “we clearly want to give Hydro-Québec more flexibility to develop its production. Companies must also have more flexibility when it comes to deploying infrastructure.”

Hydro-Québec’s 2035 action plan “is adding about 10,000 megawatts of power,” Fitzgibbon said. “We’re going to need to change our practices, otherwise it won’t happen. We’re going to need to find ways of going faster while remaining rigorous.”

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