The Brochu plan | News

When Hydro-Québec approached her for the first time, Sophie Brochu, then CEO of Gaz Métro (now Énergir), passed her turn. It was 2015 and she wanted to finish what she had started, which was to broaden the horizon of the gas company to also make it a wind energy producer and an electricity distributor. And steer it towards the renewable natural gas sector produced in the new biomethanation plants that are springing up like mushrooms in Quebec.

Then, in 2020, she said yes. After 32 years in the field of fossil fuels, Sophie Brochu has become, in the midst of a pandemic, the first woman to lead the state corporation since its creation in 1944. She holds the reins when Quebec , like Ontario and the United States, wants to make a major transition to decarbonize its economy. According to the Plan for a Green Economy presented in November 2020, the Quebec government will invest $3.6 billion over five years to electrify automobile and public transportation. The keystone of this impressive project will be Hydro-Québec's ability to meet demand in the province and elsewhere, in particular with the increase in the number of electric vehicles on the road as well as the development of greenhouse and of data, so that exports start to rise again after almost 15 years of stagnation.

Sophie Brochu takes up the main lines of the strategic plan drawn up by her predecessor, Éric Martel, concerning the energy transition, but she abandons the ambitious project of acquiring electricity distribution networks abroad. Over the next few years, Hydro-Québec will focus on what Sophie Brochu calls the “bouquet” of options: energy efficiency, solar and wind energy, hydrogen, natural gas and, of course, hydroelectricity. She recognizes that there is currently no major hydroelectric project in the pipeline. “Our strategy, she says, will be to embrace all the tools at our disposal and to play on their complementarity. »

Known for her management style focused on proximity — when, in 2008, Énergir bought Green Mountain Power, a major electricity distributor in Vermont, it hired local managers rather than sending Quebecers there —, Sophie Brochu also undertook to bring the Crown corporation closer to Quebecers. She launched a vast online consultation to ask citizens how Hydro-Québec could help them achieve “their goals and their dreams”. “We want to act as a lever to support people who have ideas. Whether it's a small business or a community that needs a boost, we want to help, support, listen. »

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Where do you see Hydro-Québec in 10 years?

It depends on where Quebec society will be! Predicting for 2022 is a lot easier than for 2031. Will the energy transition accelerate? Will an unknown factor increase Quebecers' desire for electrification? And what will happen if the barrel of oil peaks at 20 dollars? I have high hopes that Quebecers will take the turn towards electrification, but the fact is that we do not know. So Hydro-Québec's first challenge is to anticipate our energy and power needs over 10 years or more. Once the various scenarios have been determined, the means of production are implemented to meet demand. First by managing consumption and then by considering other options, starting with solar and wind energy, which are attractive for their flexibility. They can be installed almost anywhere and quickly, and these technologies are getting cheaper and cheaper.

Is this the end of roadblocks?

In the short and medium term, we won't need to launch another major hydroelectric project, but I don't know where we will be in 15 or 20 years. In any case, we now reason in a “bouquet”. We have many options available to us for generating electricity. Not to mention that we do not know what the next technological advances will be. Hydroelectricity will play a big role in this. Solar and wind are good when it's sunny and windy, but they're intermittent power sources. Whenever we develop intermittent energy, it takes hydroelectricity to balance production. Our strategy will be to embrace all the tools at our disposal and play on their complementarity.

When it came to production, you first mentioned consumption management. Does energy efficiency really work?

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Hydro-Québec has doubled its energy efficiency objectives. Since 2003, Quebecers have saved more than 10 TWh of electricity thanks to our energy efficiency initiatives [Editor’s note: enough to power 590,000 homes]. This is the equivalent of the agreement we just signed with Massachusetts, the largest export contract in the history of Hydro-Québec. We are going to invest $800 million over 10 years to reduce Quebec consumption by an additional 10 TWh.

How do you plan to achieve this?

By deploying all the smart measures to consume better and less. Is your furnace coming to the end of its lifespan? We will offer an incentive program to replace it with a more efficient system. We will propose finer measures, such as the installation of even more intelligent thermostats, and the generalization of their use. The government will also be involved, for example by modernizing the building code.

But electricity is so cheap in Quebec, how are you going to prevent waste?

We are going to offer opportunities to Quebecers. Our new subsidiary, Hilo, will offer its customers, smart home owners, the means to support their use of electricity. Other customers prefer to manage their consumption themselves, so we offer them differentiated tariffs [Editor’s note: since 2019], which entitle them to bonuses or discounts when they prefer consumption outside peak hours. It bites pretty hard on young people. But there will always be a part of the population that will not adhere to the idea of ​​working to reduce consumption, neither to save money nor for the environment. We are doing research to find out how to encourage these people to consume differently.

How to strike the right balance between limiting consumption and encouraging electrification?

@TimObrien23Tim does not know how to defrost a burger, or even put a burger int he oven wow....

— Karma Cop Fri Mar 01 21:29:42 +0000 2013

I'll give you the example of greenhouses. Since the pandemic has disrupted the supply cycle, there has been more concern about food self-sufficiency. And since most greenhouses, especially the smaller ones, use fossil fuels, Hydro-Québec wondered how to electrify them. We have therefore offered them a significant reduction in the rate, from 10 cents per kilowatt hour [Editor’s note: the rate that applies to agricultural businesses and SMEs] to 5.9 cents. In return, we asked them to keep their gas or oil heating system as a back-up to help us manage the winter peak, when our system is used to the maximum — each megawatt of additional power is extremely expensive. So, if the greenhouses can offload the network during these few hours, that represents a very, very big saving in equipment for all Quebecers and it creates a more resilient electrical system.

Natural gas is therefore part of the famous “package”. Is this what explains your merger with Énergir and also your hydrogen production plant in Varennes, whose commissioning is scheduled for the end of 2023?

It is part of this movement, yes. We electrify, we decarbonize, but in a very efficient way. If we are able to supply more electricity, but at the same time natural gas can support us during peak periods, everyone wins. Hydrogen is another idea, but if we manage to produce green hydrogen from the electrolysis of water, we can inject this hydrogen into the natural gas network and "green" the gas natural. It would be one more step in the energy transition and decarbonization.

Is Hydro-Québec in a surplus position? There is a lot of confusion on this point.

Yes, because the word "surplus" is ambiguous. For me, a surplus is worth nothing. It's like table scraps. I would tell you about surplus if the reservoirs of our dams overflowed and the water had to be discharged. This is not what happens in Quebec. What we have is "latent" or "available" energy, energy produced and stored. So, do we have any latent energy right now? The answer is yes. Once we have said that, what do we do with this available energy? Available for whom? To do what ? This leeway is essential, because Hydro-Québec's job is to meet demand in the province despite fluctuations in demand and depending on the equipment that can be mobilized. So we always need available energy. The Romaine complex [Editor’s note: near Natashquan, on the North Shore, the last major hydroelectric facilities in Quebec] is used for this: to provide us with large blocks of latent energy. Traditionally, the short-term electricity market, the “spot” market [Editor’s note: market where electricity is sold in real time in North America, where the price fluctuates], was a way of selling this available energy. But with the Massachusetts supply agreement, we are changing our approach: we are going to sell them 10 TWh per year for 20 years under a firm contract. In doing so, however, 10 TWh are no longer available. It is justified when the price is good, which is the case here. There are people who would like our electricity and who say: “Hydro has surpluses, it cannot be expensive. But we will not sell our electricity at a discount! Forecasting the energy available in the context where Quebecers and the government are betting on electrification is already a challenge. We are very careful in this regard.

So, yes to exports, but not at any price?

In New York State, Governor Andrew Cuomo has taken the same approach to renewable energy as Massachusetts. He launched a major call for tenders, and we are currently evaluating what Hydro-Québec's response will be: how much, when, how much electricity, with or without power? Maybe they will be offered a firm contract, but maybe not either if the price, the conditions and the context are not favorable.

Since Grande-Baleine — the project for three hydroelectric power stations in northern James Bay, canceled in 1994 due to strong opposition from the Crees — Hydro-Québec's American customers have been very sensitive to your relations with the First Nations. Quebecers are more and more so too. What are you going to do on this front?

We are going to adopt a mental posture that is much less "transactional" and much more "relational". Fifty years ago, Premier Robert Bourassa said: “We are launching James Bay. The Crees learned about the project on the radio and it turned into a mess. The James Bay and Northern Quebec Agreement [1975] then the peace of the brave [2002] were born in great pain. For almost 20 years, Hydro-Québec's relationship with the Crees has been healthy and constructive. But even today, we think “transactional”. We will tend to get involved with indigenous communities when we have a project, for example for a new power line.

Having a relational philosophy means asking yourself what you can do best with indigenous communities, even if you don't have a specific project. I want to create associations of heart and body that will last. How ? We could start by welcoming more Aboriginal people to Hydro-Québec. There's no reason why there shouldn't be more of them. Another action: in the field, since we have to maintain thousands of kilometers of lines, why not develop a model of mobile teaching in the communities to train technicians in vegetation control? We could then guarantee long-term contracts to graduates of these courses instead of offering them contracts of one or two years which are always to be renegotiated. Head office functions, such as information technology, could also be decentralized to certain regions. It would be young people from the Côte-Nord, Aboriginal or not, who would ensure our IT for all of Quebec. I am convinced that we are capable of doing more and better. These communities will come up with ideas that we don't even think of!

Does your decision to relaunch the Apuiat wind farm with the Innus follow this logic?

In 2019, the government said, “No, too expensive, no need for 200 megawatts. But in 2021, the planets align differently. Quebecers have clearly expressed their desire that the economic recovery after the pandemic be a green recovery. Americans too. It happens when we start to need new sources of energy. So, for Apuiat, we put ourselves in “must make it work” mode. We presented our idea to the government and we worked with our Innu partners to reduce the cost of the project. So what would have cost 10 cents per kilowatt-hour in 2018 is now 6 cents, thanks to falling technology and financing costs. And it won't pay off any less for the Innu. In addition, now we will have Aboriginal people who will supply the Hydro-Québec network. It strikes the imagination!

With a profit of $2.3 billion in 2020, Hydro-Québec had its worst performance since 2010. Is this the end of an era?

No. The year 2020 has been like a pinch. We expect a recovery in profit to 2.7 billion in 2021. But our profitability will be a little compromised, because we have to increase our investments in maintenance to the tune of 4.6 billion per year, or around 1.1 billion higher than the average for recent years. It's because our facilities, which are over 50 years old, need love! There are too many examples around us of underinvestment for 30 years. It is very easy to fall into this trap, because from one year to the next, the deterioration hardly appears. But when it becomes apparent, it is already too late. Hydro-Québec will not make that mistake.

This article was published in the June 2021 issue of L’actualité.

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