Hydro-Québec is facing a “death spiral”

News 9 January, 2018
  • Photo Pierre-Paul Poulin
    Éric Martel, president and ceo of Hydro-Québec, recognizes that HQ and other energy companies “have never been challenged” before, and that the Crown corporation is now facing a ” major upheaval “.

    Charles Lecavalier

    Tuesday, 9 January 2018 00:00

    Tuesday, 9 January 2018 00:00

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    Hydro-Québec is facing a “death spiral” that could cause an explosion of the rates, and alienation of Quebecers for electricity from large dams, from the admission even of its president and CEO.

    “The Americans call it the spiral of death, the death spiral. If people start to autoproduire with the solar, they consume less. But there are so many transformers, electrical wires to buy. Therefore, the rates will go up. This will make the self-production even more profitable. That is, the spiral is deadly “, says Éric Martel, president and CEO of Hydro-Québec, in an interview with The Newspaper.

    It is not just a hypothesis : Hydro-Quebec (HQ) has in hand a study showing that the smart home producing a part of its energy could be cost-effective in Quebec, beginning in 2025.

    The owners could produce up to 15 % of their energy consumption. The electricity consumption of Quebec has plateaued since 2007. It would now decrease.

    Mr. Martel, in office since June 2015, acknowledges that HQ and other energy companies “have never been challenged” before, and that the Crown corporation is now facing a ” major upheaval “.


    The manager believes, however, that Hydro-Québec has the aces in its sleeve to overcome this challenge. First, it does not launch itself in the business of houses autoproductrices.

    Will there be a day to call HQ to make installing solar panels and a battery ? “It is an idea, absolutely. It has already built houses with all the apparatus possible to have a maximum of energy efficiency. It is in the process of testing it “, reveals the latter.

    If Quebecers consume less, Hydro-Québec must necessarily turn to other customers to sell its production and to prevent the disaster.

    The CEO Martel wants to do everything to attract to Québec businesses energy-intensive. In his line of sight, the web giants like Facebook and Microsoft. Quebec sells for the moment 450 MWh to companies ‘ computer servers. In four years, the goal is to sell 6 TWh, the equivalent of nearly a million american homes.

    HQ has several selling points : a reliable, clean energy, large areas of land to offer as well as the cold. “I say to the winter, you do not have to open the garage door and windows for air-conditioning “, he said with a chuckle. With the arrival of the miners cryptomonnaie, Mr. Martel estimates that a further 5 TWh could be added.

    New lines of transport

    It is also banking heavily on new transmission lines to the United States to sell surplus Hydro-Québec. “It takes me to the transport lines to bring to market. It is the number one priority of Hydro-Québec “, he launched.

    Mr. Martel is now eagerly awaiting the decision of the State of Massachusetts, which will make it public on the 25th of January, on a call for tenders 8.3 TWh that Hydro-Québec hopes to win.

    What he thinks

    Finished the opacity

    “Prior to my arrival, there were reflexes here : people have asked us in our surveys about customer service. I remember, that team came to see me a few days after : “what is there not to publish ?” I said : “Why we don’t want to publish them ? Is it that one has what to hide ? Put them on the sites, I want full transparency.”

    It was all the time on the first page of the newspaper, always controversial. There was a distrust that was installed upside down Hydro-Quebec, like what we said not always, that nothing was said in fact. Now, I tell them : “Go ahead, you have nothing to hide and if one is deceived, one is deceived.” “

    About the construction of new dams, as proposed by François Legault

    “There is still a huge potential : it could double our production of hydroelectric power, but today I can’t, as president and CEO of Hydro-Québec, to justify the construction of a new dam.

    It comes to make-up of spills to Manic-5 for the first time since the dam exists. It was water as we had never had. It is necessary to be responsible, we would have been able to say : “We will continue to build dams and we are going to open the floodgates.” Nobody wins there.

    For the past 15 years, just in hydroelectricity, were added 25 TWh [the equivalent of a power to more than 4 million homes in the United States, according to HQ], and Quebecers do not consume more than before. Demand is flat since 2007. My job is to sell this production. If we built power plants, and that the only thing you do is open the valves to drain the water, it gets nothing. “

    The more expensive electricity at peak-time

    “There has been a notice from the minister that request to the Régie de l’énergie to look at it with us. We look at it.

    Before, it was always pushed of electricity to our customers. In an environment where they start to produce, it becomes two-way. We can exchange energy.

    It can be interesting : instead of building the production, I will buy them [of electricity] between 17 h and 19 h. And I will pay even more expensive at this time. But, but, if you eat at this time, it will be more expensive.

    In the whole of our reflection of energy transformation, the tariffs and regulation must be part of it. “