Canada Special: Quebec - In search of a better shade of green

There are plans for 3.5 GW of new wind plants to be installed in Quebec in the near future, but with the wind resources at its disposal and the space to build, the province could do much better. Under its current energy plan, however, wind development will come to a virtual standstill in just six years and Quebec risks missing out on some lucrative opportunities.

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The quality and abundance of Quebec's inland wind resource is literally mind-boggling. Its annual electricity generation potential exceeds 14,000 TWh - nearly a thousand times more than could be produced by harnessing the power of the few remaining, unexploited, large rivers in Northern Quebec today. Of the 175 TWh of electricity consumed in 2008, some 97% was supplied by hydro plants owned by Hydro-Quebec (HQ), the provincial utility wholly owned by the government; wind power supplied 0.66%. And the government's energy strategy, released in 2006, backs hydro as the mainstay for the province's electricity supply long into the future.

Hydro-Quebec Production (HQP), the utility's generation arm, owns 35 GW of power capacity (including 1.5-2 GW of gas, nuclear and fossil fuel). A greater part of its hydro portfolio is located more than 1000 kilometres north of all the province's major electrical load centers. Quebec's installed wind capacity, all owned by independant power producers (IPPs), amounts to just 531.8 MW in comparison. That is expected to reach 4 GW by 2015, according to the Quebec government's energy strategy for 2006-2015. All the electricity generated by wind will be bought by HQ. Its electricity distribution division, Hydro-Quebec Distribution (HQD), will buy 85% of it under the system of quotas and call-for-bids adopted by the government; the remaining 15% being sold to HQP under power purchase agreements signed before November 2005.

Around 60% of the targeted 4 GW of wind for the province is expected to be operating within the HQ Matapedia zone. This zone includes the regions of Gaspesie and Bas-St-Laurent. Matapedia has traditionally relied on imports from neighbouring areas to meet 99% of its electricity demand. Under the government's strategy, Matapedia will not only meet all of its own electricity needs from wind alone but will become a net exporter of electricity, supplying its regional neighbours too.

Limited vision

But while an additional 3.5 GW of wind is planned between now and 2015, the Quebec wind sector seems to be heading towards dire straits thereafter. Given the annual wind energy penetration levels documented in the electricity supplies of countries such as Denmark or, even more strikingly, Spain in 2009, Quebec's energy strategy looks exceedingly shy. It is also somewhat inconsistent, too, with the status of net clean energy exporter that Matapedia is expected to have established for itself by 2015. The government's energy strategy stipulates that after 2015, the building of new wind capacity will be limited to 10% of the new hydro capacity commissioned. On the basis of yearly energy production, that means for plants built after 2015, the actual generation in megawatt hours from new wind capacity will be limited to 5% of the total energy generated by new hydro capacity. This prescription has raised legitimate concern about the validity of the alleged technical constraints on developing more wind. The cap is the result of perceived transmission limitations in northern Quebec.

The best wind resources in Quebec, though, are known to exist in the vicinity of major hydro electricity complexes such as La-Grande and Manic. These immense territories have vast amounts of transmission capacity, but not a single wind project in sight. Big wind projects similar in capacity to the hydro projects presently being developed by HQP could very well make an altogether better economic proposition than the average project arising from the call for bids. Social and community acceptance might be an easier sell as well. Moreover, direct involvement by HQP as a developer/owner of large wind projects - complementing development by IPPs - would perhaps strengthen the government's ability to achieve its aims. It says it wants to develop a wind market for the long term, in the most efficient, coordinated, least-cost way, but expressed in its energy strategy that it "wishes Hydro-Quebec Production does not participate in the bidding process."

Load management

Meanwhile, one area where Quebec has a strong reputation is in dealing with the load management optimisation problem of a hydro-wind based system. There is no better best practice case study so far. That said, there is room for improvement even in this context. Around 80% of households in Quebec depend on electricity for their space heating needs, which typically constitute 50% of their annual electricity bils. This unique load characteristic has historically driven the development and operation of the huge reservoirs where the water inflows and stocks need to be exploited (from snow melt until late fall) in anticipation of the harsh winter to come. Naturally, the wind-induced thermal loads associated with space heating have always required the attention of planners and operators of Quebec's electricity grid, particularly in their daily balancing operations. Quebec's system operators (the transmission and generation divisions of HQ) have learned over the years to develop the skills needed to exploit the flexibility of their hydro-based generation portfolio while accounting for the meteorological reality of wind variability.

And it also turns out that the outstanding wind resource of Quebec happens to be even better in the winter than in the summer, so that its harnessing provides a natural energy supply that perfectly matches the monthly load curve. Wind power therefore inherently brings three significant advantages to the province's electricity system. On an annual basis, the reduced statistical variability of combined wind-hydro inflows increases the reliability, the adequacy and the security of energy supply, providing a natural insurance against dry years in the hydro basins. Secondly, on a weekly or monthly basis, wind generation allows for a greater flexibility in the management of the hydro-electric generating assets and reservoirs providing new opportunities on the bulk electricity export market. So lastly, designing a better coordinated wind-hydro system would altogether bring long-term energy sustainability and reduced environmental impact and put Quebec in a strong strategic position to take advantage of the value-added revenues that will be generated by the upcoming North American CO2 emission credits exchanges (REC or compliance markets).

Strategic plan

Such synergies naturally call for an efficiently coordinated approach by planners and operators of the electrical system. It is not yet clear at all, however, if and when Quebec energy policy will ever allow an integrated planning framework to maximise the overall benefits of such complementary electric power system characteristics. Indeed, wind appears an oddball in HQ's strategic plan. Aside from HQP and HQD preparing to become the buyers of all the wind generated electricity in Quebec in 2015, the company's wind integration plan essentially focuses on developing forecasting tools for balancing wind generation variability in system operations. The utility's distribution division has alreadly agreed to pay HQP a fixed cost of C$0.05/kWh for balancing each unit of wind generated electricity in the province - the basis on which this balancing price was arrived at has not, however, been quantified.

Meanwhile, the greater part of HQ's overall investment focus is on the government's Plan Nord, its latest five-year plan (2009-2015) released on August 1. This calls for the development of at least 3 GW of new hydro capacity between 2015 and 2030. HQ P will develop on some of the last major rivers of Quebec's lower North Shore, including la Romaine (1.55 GW) and Petit-Mecatina (1.2 GW). And for the wind sector, under the rules of the province's energy strategy, the plan means a mere 300 MW of new wind capacity can be developed by IPPs in the 15-year period to the end of 2030. So the perspectives for a sound and dynamic industry after 2015 look somewhat disturbing in many regards.

For things to improve in the long haul, an update on the macro-economic competitiveness of wind versus hydro projects in Quebec is required. The decision to undertake such a comparative analysis lies in the hands of HQ's sole shareholder, the government of Quebec. The imperatives are there. All it needs now is the political will. In the past, hydro power has positioned Quebec as the North American champion of what was a reference for clean energy. Now that the North American electricity sector is heading towards a multi-dimensional environmental definition of clean energy sources - where wind is poised to take the lion's share - many jurisdictions are preparing for a heated battle to take a share of the market opportunities that their wind resource may provide them. Quebec, as one of the greenest players on the continental grid to date, remains in an unmatched position to become the greenest of the greens. In revisiting its strategic development plan to instead focus on taming its massive wind resource, Quebec could reap some economic benefits that few market players can even dream about.


Bernard Saulnier is a professional engineer and wind energy veteran. He is also co-author of a new book on wind energy in Quebec. Written with fellow wind veteran Real Reid, L'eolien au coeur de l'incontournable revolution energetique (Wind Power in the heart of the ongoing energy revolution), examines the technical and economic aspects of wind power integration in the electricity grid and demonstrates why wind energy has become the most competitive bulk electricity supply option today. Quebec's massive resource potential can, the authors suggest, translate into a huge business opportunity on the energy markets for the province. Saulnier and Reid's work at the Hydro-Quebec Research Institute, and their involvement with the Canadian Wind Energy Association, has earned them the R.J. Templin award (1994 and 1998) recognising an outstanding contribution to the development of wind technology in Canada. In 2002, they also won the Wind-Diesel Pioneer award from NREL's Wind Powering America Program (US Department of Energy) for their leadership and committment to wind-diesel technology development.

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