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Hydro-Québec poised to profit from U.S. thirst for green energy

“The contract with New York is far from being signed,” Pineau said. “The mayor of New York City has said he wants to start negotiating, so that’s a very good sign. If he goes public it means he’s committed. … But it’s never easy. In principle everyone loves renewable energy, but when it comes to the invoice and the price tag, sometimes people have second thoughts.” In the case of New York City, that price tag includes $2.9 billion for U.S. developers to run the line through the state of New York, plus hundreds of millions more for Hydro-Québec to bring the line from the border to the Hertel converter station on Montreal’s South Shore.

For the first time in 30 years, the power utility is on the verge of opening two major transmission lines to the northeastern United States.
François Legault is headed to Washington, D.C., and New York this month to drum up trade and flog Quebec’s surplus hydro electricity.
The hydropower sales pitch is nothing new for Quebec’s premier. Increasing energy exports was a central plank of his election campaign, and since being elected, he has repeatedly promoted the offer to Canadian premiers and state leaders in New York, Vermont and Massachusetts.
This time around, however, Legault will be buoyed by a growing and very public interest in Quebec’s green power, particularly in the northeastern U.S., where the quest to reduce greenhouse gas emissions and reduce some of the highest energy costs in North America has become politically popular.
For the first time in 30 years, Quebec is getting closer to signing agreements to create two major transmission lines into the northeastern United States that could increase its export sales by nearly 50 per cent and bring in tens of billions of dollars in revenue in the coming decades.
Due to the higher rates Hydro-Québec... more [truncated due to possible copyright]  
For the first time in 30 years, the power utility is on the verge of opening two major transmission lines to the northeastern United States.
 
François Legault is headed to Washington, D.C., and New York this month to drum up trade and flog Quebec’s surplus hydro electricity.
 
The hydropower sales pitch is nothing new for Quebec’s premier. Increasing energy exports was a central plank of his election campaign, and since being elected, he has repeatedly promoted the offer to Canadian premiers and state leaders in New York, Vermont and Massachusetts.
 
This time around, however, Legault will be buoyed by a growing and very public interest in Quebec’s green power, particularly in the northeastern U.S., where the quest to reduce greenhouse gas emissions and reduce some of the highest energy costs in North America has become politically popular.
 
For the first time in 30 years, Quebec is getting closer to signing agreements to create two major transmission lines into the northeastern United States that could increase its export sales by nearly 50 per cent and bring in tens of billions of dollars in revenue in the coming decades.
 
Due to the higher rates Hydro-Québec can charge on the unregulated market outside the province, export sales accounted for nearly 30 per cent of the power utility’s net profits of $3.2 billion last year.
 
The contracts would fulfill Legault’s pledge to make Quebec the green-energy supplier of northeast America. But running high-wattage transmission lines through hundreds of kilometres of state land is a prospect freighted with political hurdles and financial considerations, warns HEC Montréal professor Pierre-Olivier Pineau, who holds the chair in energy sector management with the university.
 
“The contract with New York is far from being signed,” Pineau said. “The mayor of New York City has said he wants to start negotiating, so that’s a very good sign. If he goes public it means he’s committed. … But it’s never easy. In principle everyone loves renewable energy, but when it comes to the invoice and the price tag, sometimes people have second thoughts.”
 
In the case of New York City, that price tag includes $2.9 billion for U.S. developers to run the line through the state of New York, plus hundreds of millions more for Hydro-Québec to bring the line from the border to the Hertel converter station on Montreal’s South Shore.
 
New York City Mayor Bill de Blasio announced in late April he wants all public infrastructure in his city fed by “zero-emission Canadian hydroelectricity” as part of his climate action plan that would reduce greenhouse gas emissions by 40 per cent of 2005 levels by 2030. He wants a deal signed by 2020 and the juice to start flowing by 2025.
 
“WOW!” Legault tweeted. “Hydro-Québec could become the green battery of northeastern America.”
 
De Blasio was referring to a project that has been batted around since 2008. The Champlain Hudson Power Express project would run transmission lines buried under ground and under water for 530 kilometres and supply 8.3 terawatt hours of power, described as being enough to power the entire state of Vermont, population 620,000, with green energy.
 
It’s also equivalent to a quarter of all the power Quebec exported in 2017.
 
In December, Maine’s Public Utilities Commission approved the $950-million New England Clean Energy Connect project, another transmission line that would transport 9.45 TWh of electricity to six New England states, extending all the way to Massachusetts, in a 20-year deal starting in 2022.
 
In both cases, the lines still have to pass various state and federal approvals, including a presidential permit, but the public signals are strong, Pineau said.
 
“I’m confident it will go through because New York and New England is committed to decarbonization. And they already pay very high prices for their energy.”
 
Quebec’s hydro rates are competitive with wind power rates in the south, and are approaching natural gas prices, which are rising. Pineau warned, however, that Hydro-Québec must sign agreements with New York State, whose policy has been to get more of its electricity from off-shore U.S. wind farms and through greater energy efficiency.
 
The lines come at a good time for Hydro-Québec, which has surplus power it can’t use and a Quebec market that’s flat and is projected to remain so, said spokesman Gary Sutherland, director of external relations for the power utility.
 
“There is extra water in our reservoirs that is not being turbined, that’s being spilled out, unused.”
 
At the same time, when electricity demands are at their peak in New England for summer air conditioning and winter heating, the existing transmission lines are at full capacity.
 
The New York line would bypass that congestion “and allow us to sell directly into the Manhattan load pocket, which generates more interesting prices,” as well as to other clients, Sutherland said. At the same time, it will allow Manhattan to replace other natural gas products, he noted.
 
A study commissioned by the U.S. developer found the line would allow the state of New York to reduce CO2 emission by more than 100 million metric tonnes.
 
While increased sales won’t mean reduced rates for Quebec customers, who pay the lowest electricity bills in North America, it will mean more cash in provincial coffers to fund needs like health care and education and infrastructure, Sutherland said.
 
The market for Quebec’s surplus energy could also lead to provincial backing of the the $600-million Apuiat wind-farm project on Quebec’s North Shore that Legault had initially ordered shelved.
 
For Legault, whose government has been criticized for a lack of global warming consciousness, the potential Hydro-Québec deals represent large green wins in terms of cash and the environment.

Source: https://montrealgazette.com...

MAY 9 2019
http://www.windaction.org/posts/49809-hydro-quebec-poised-to-profit-from-u-s-thirst-for-green-energy
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