Non-renewal of the Ontario-Hydro-Québec agreement: a mistake according to the opposition

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Non-renewal of the Ontario-Hydro-Québec agreement: an error according to the opposition

The agreement concluded in 2015 under Kathleen Wynne and Philippe Couillard expires next year.

The contract provides for the annual purchase of 2.3TWh, or approximately 7% of Hydro-Québec's average annual exports.

Ontario opposition parties deplore the Ford government's decision not to renew the power purchase and sharing agreement with Quebec. The province has confirmed to Radio-Canada that it does not intend to renew this agreement, which surprises some experts.

This government seems to want to increase the share of the central to gas, which will mean higher bills for consumers and more pollution for Ontario, says Green Party Leader Mike Schreiner.

Interim New Democratic Party Leader Peter Tabuns accuses the Conservatives of creating a shortage by canceling green power generation projects and energy conservation programs.

“Part of the solution to the problem created by Doug Ford is to import even more green, renewable and inexpensive hydroelectric power from Quebec. We should negotiate a much stronger agreement with Quebec, instead of giving it up.

— Peter Tabuns, Interim Leader of the NDP

Ted Hsu, the Ontario Liberal Party's energy critic, also accuses the government of ignoring climate change by favoring gas-fired plants.

He believes that Ontario would need stable prices to finance and build energy projects. It's like needing a mortgage to buy a house, and Premier Ford decided to risk an adjustable rate mortgage instead of locking in a fixed rate and reducing our risk.

Quebec Premier François Legault (left) with his Ontario counterpart Doug Ford (at right).

The long-term contract, which expires next year, aims to reduce Ontario's GHG emissions by providing for the annual purchase of 2.3 TWh, or approximately 7% of Hydro-Québec's average annual exports. Quebec.

The agreement also guarantees a seasonal exchange of energy, since Quebec has surplus power during the summer period, while its needs increase in the winter. As such, Ontario intends to exercise its only and final option in the summer of 2026, for a 500 MW block.

The office of Ontario Energy Minister Todd Smith believes it will save money by relying on a competitive procurement process instead. He adds that Quebec will run out of electricity anyway in the middle or at the end of the decade.

Exchanges between the two provinces will continue on the electricity market and on the occasion of annual auctions. The decision is nonetheless a bit surprising, because we are still talking about a lot of energy, says researcher Éloïse Edom, from the Trottier Institute of Polytechnique Montréal.

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The deal was signed in 2015 under then Quebec Premier Philippe Couillard and Ontario Premier Kathleen Wynne .

What disappoint François Legault, who has tried many times to convince Doug Ford to buy more Quebec hydroelectricity. His office and the Quebec Ministry of Energy, however, did not respond to our requests for comment.

For its part, Hydro-Quebec will not comment on the intentions of the IESO regarding the agreement which expires next year, said its spokeswoman Lynn St-Laurent. The situation comes as the state-owned company continues its legal battle over its planned export to Massachusetts.

Yet Ontario is on the verge of running out of electricity, particularly because of the refurbishment of the Bruce and Darlington nuclear facilities.

Windsor has already lost a 2 $.5 billion, because the region lacks supply. And by 2025, Toronto will run out of power for the electrification of its transportation, according to the latest estimates from the Independent Electricity System Operator (IESO), the equivalent of Hydro-Québec in Ontario.

The Ford government recently announced that it hopes to extend the life of the Pickering plant. It is also evaluating the possibility of increasing the hydroelectric production capacity of its existing dams.

The Pickering, a suburb of Toronto

For now, the province is banking on its natural gas-fired power plants, which have won most recent IESO tenders, for contracts running through 2026. Last Friday, the province announced that it would procure an additional 1500 MW by 2027.

Perhaps the [Ontario Energy] Minister's expectations are that the increase in natural gas prices will be temporary and that it will fade, believes energy economist Jean-Thomas Bernard.

With this in mind, he probably does not want to sign a long-term contract [with Hydro-Québec] and prefers to buy electricity on a day-to-day and on-call basis. 'offers.

Ontario, which is already almost at the bottom of the class in this area in the country, will therefore be called upon to increase its GHG emissions for the sector, at least in the medium term. Last year, the IESO assessed that it would be very difficult to establish a moratorium on natural gas before 2030. It must produce a final report on the subject for the Minister of x27;Energy, Todd Smith, by the end of November.

When you factor in Canada's carbon neutral goal, it doesn't add up, says Ms. Edom, co-author of a strategic outlook report for Canada's electricity sector released in August.

Ontario, she continues, could buy more hydroelectricity by increasing its transmission capacity with Quebec. An expensive choice, but much less than for export projects like the one between Quebec and Massachusetts, because it would be enough to exploit the routes of the existing lines.

Éloïse Edom is a research associate at the Trottier Energy Institute of Polytechnique Montréal.

According to the researcher, studies show that the lowest cost solution to decarbonize electricity would be to interconnect all the networks of the provinces of central and eastern Canada and from the northeastern states of the United States.

The brake, she says, is political. Provinces and states tend to aim for autonomy. We produce at home and we consume at home, even if it is far from being the best scenario.

Last year, Hydro-Québec exported 35.6 TWh to neighboring markets, of which 20% (7.7 TWh) was purchased by Ontario, a higher volume than usual.

< p class="e-p">In recent years, Ontario has procured an average of 5.1 TWh. Nearly half of these volumes (2.3 TWh) came from the cartel. The rest came mainly from the wholesale electricity market.

The end of the agreement with Ontario should not have a major impact on finances. Hydro-Québec, believes Jean-Thomas Bernard. 2.3 TWh falls within the variations of recent annual export volumes.

In the end, he says, nothing prevents Ontario from x27;to buy more or less Quebec hydroelectricity in the future, but there will no longer be a firm commitment.

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