The export of electricity will have to be collaborative or will not be

Photo courtesy

Bertrand Schepper

Saturday, February 3, 2018 11:38

UPDATE
Saturday, February 3, 2018 11:42

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The last few days have been hectic at Hydro-Québec. After she announced that she won the biggest contract in its history in Massachusetts with the construction of the line Northern Pass Transmission (NPT), here we learn that the committee for selection of sites of New Hampshire declines the project.

Of course, Eversource, the american sponsor and partner of Hydro-Québec in this folder will have other recourses, and it can be assumed that the project is not cancelled. However, this rejection unanimous of the commissioners of the New Hampshire raises important questions about the future of the energy transition in north america. Hydro-Québec may be called upon to play an important role in this transition, just as it could lose feathers.

To understand the situation, I will do the portrait of the three actors involved in this dossier in order to check who is benefited by the proposed NPT.

We know that Quebec expects to sell a significant portion of its surplus by exporting to the Massachusetts. If all goes well, the State-owned company will sell about 9 terawatt-hours, which would represent an annual income of about $ 500 million for 20 years. So far, the project had gained in social acceptability, especially because Hydro had decided to bury part of the line on its territory. In short, the Quebec would rather win.

On the side of Massachusetts, the project would bring the rate of energy called own that he uses to almost 50 %. In 2015, 66 % of the State electricity came from natural gas and nearly 6 % of the coal. The NPT would therefore be less polluting and have bundles more energy economic. In sum, the project seems rather interesting.

From the point of view of New Hampshire, it is rather the reverse, because the territory will be crossed by a gigantic high-voltage power line and the State will have a limited access to energy from Hydro-Quebec. It is important to understand that the population of New Hampshire is scattered between several small towns, and that there is therefore little or not cost effective to build new lines to reach these municipalities. Economically, in addition to a few jobs created in the short term to the establishment of the network, there are few economic advantages to such a project. In addition, it is possible to suppose that this State, which has a production increasing renewable energy, hopes to eventually provide it also in energy to its neighbours. Finally, the New Hampshire finds himself somewhat in the same situation as Quebec with the pipeline project Energy East, which would make the switch from oil oil from western Canada and New Brunswick through Quebec. In such situations, the territory the transit takes most of the risks without the benefit of real benefits.

We can therefore understand the New Hampshire to refuse the project. However, if we look at the in the overall project, by agreeing to the NPT, the United States would reduce their consumption of natural gas and of coal significantly. In terms of ecological transition – and even an economic point of view – this is good news.

But here is the issue : it is certainly noble to want to reduce greenhouse gas (GHG) emissions in the United States, but that this should be done at the expense of the population of New Hampshire, and for the sole benefit of the Quebec and Massachusetts, which will take advantage of the financial benefits of this project?

While it becomes increasingly easy for individuals and businesses to get rid of the distributors of the energy through the batteries and the falling prices of solar panels, one can assume that Hydro-Québec would have the advantage to modify its business model in order to integrate these technologies, and thus avoid the famous death spiral. It would also have a vested interest in understanding that if it wants to compete with energy suppliers in the u.s. (green or pollutant), it may be necessary to ensure that the players in place. Otherwise, Hydro-Québec is a high risk of staying taken with its surplus.

In the example that occupies us, to promote the ecological transition and replace electricity from coal and natural gas by hydro-electricity, it would also be necessary to find the means of satisfying the New Hampshire. To do this, Hydro-Quebec/Eversource may have to accept to reduce his profit margin. It is a lesser evil if, in doing so, it enables him to dispose of its surplus while helping to reduce GHG emissions in North America. This is why the project of the transition energy exceeds the boundaries of States and should be considered at the international level.