Our low-cost electricity brings business to our neighbors

Our low-cost electricity brings business to our neighbors

While Hydro-Quebec delays corporate investment projects here, US companies like Micron and IBM stand to benefit from Crown Corporation’s low-cost “green” electricity for years to come.

• Read also: $2 billion for 13 power plants: high price paid by Hydro-Québec

“Are we helping competitors? The question is valid. We should help Quebec before New York State, right? asks Jocelyn B. Allard, president of the Quebec Association of Industrial Electricity Consumers (AQCIE).

In early October, tech giant Micron said it would invest $20 billion in a new semiconductor plant in Clay, upstate New York.


New York State Governor Kathy Hochul with Micron CEO Sanjay Mehrotra.

Screenshot taken from the web

New York State Governor Kathy Hochul with Micron CEO Sanjay Mehrotra.

In an interview in Washington PostNew York Senator Charles E. Schumer said Micron chose the site in part because it is near a hydroelectric plant in Niagara Falls, which produces cheap electricity.

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Another US giant, IBM, also announced earlier this month a US$20 billion investment in the Hudson Valley over the next 10 years.

On its website, IBM specifies that its energy strategy aims to purchase electricity generated by power plants located in the same region where IBM consumes its electricity.

Hypothesis

“If Quebec didn’t sell its electricity to New York state, would the state’s green electricity have been available to Micron? I’m not sure as decarbonizing New York City is a priority for them. So Micron might have been attracted to our green electricity here in Quebec? These are hypotheses, but this type of questioning does not seem to be present in the not always transparent elections carried out by Hydro-Québec”, adds Mr. Allard.

It should be noted that in December 2021, Hydro-Québec reached an agreement with the State of New York to supply the region, when the site is fully operational, with 1,250 megawatts, the equivalent of the consumption of more than one million homes. The contract is for a period of 25 years.

In addition to low-cost electricity, President Joe Biden’s CHIPS and Science Act, a subsidy program for semiconductor and computer chip makers, has contributed to investment announcements by the two US giants.

Brakes in Quebec

The situation is unsettling for many Quebec companies, which have had their ambitions hampered by Hydro-Québec for several months.

In addition, according to a document obtained from the Régie de l’énergie, subscriptions to Tariff L and special contracts of Hydro-Québec, which represents industrial clients such as aluminum smelters and other large consumers, have been stagnant for almost 10 years. .

Many companies have decarbonization or industrial expansion projects. And the new players would like to settle in Quebec. But those projects have to wait, because hydropower is now in high demand. To achieve carbon neutrality by 2050, Quebec needs an additional 100 terawatt hours (TWh), or 50% of Hydro-Quebec’s current capacity, according to Hydro’s strategic plan.

“Over the last year, Hydro-Québec has been telling people: we can’t tell you if we can help you with the project you intend to do. We do not know if we have electricity for your requests. We don’t want to commit. At the same time, Hydro boasts of having export contracts that will be very profitable. It’s a bit disappointing,” says Jocelyn B. Allard.

“We want to do both, export and develop Quebec. These two fronts are by no means incompatible. We have received many requests for projects, and these projects will be carried out, it is a matter of time and choosing the most promising projects”, specifies Maxence Huard-Lefebvre, spokesperson for Hydro-Québec.

Hydro-Québec yesterday welcomed the creation of an interdepartmental committee, to be chaired by Prime Minister François Legault, responsible for defining a “prioritization grid” for industrial projects related to the energy transition.

  • 1,250 megawatts of electricity supplied by Hydro-Québec to the state of New York.
  • A 25-year deal.
  • Potential revenue for Hydro-Québec of almost US$30 billion during this period.
  • A buried power line 545 kilometers away in the United States, much of it under Lake Champlain.

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