The Hydro-Énergir agreement less advantageous than electricity, concludes a study

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The Hydro-Énergir agreement less advantageous than electricity, concludes a study

Under the offer, customers can use electricity for 70% of their heating needs and natural gas as a backup source.

Is the dual-energy offer proposed by Hydro-Québec and Énergir advantageous for consumers? A study concludes that it could cost more for natural gas customers who would like to adopt it rather than heating entirely with electricity.

The agreement between the Crown corporation and its competitor was approved by the Régie de l'énergie last May. It aims to convert gas heating systems to dual energy in order to reduce greenhouse gases.

Under the offer, customers can use electricity for 70% of their heating needs and natural gas as a backup source, especially when it's cold and that the Crown corporation wants to conserve its energy to overcome winter peaks when demand is higher.

An Écohabitation study commissioned by several groups that denounce the Hydro-Énergir partnership, including Équiterre, Greenpeace and Nature Québec, sheds new light on the savings promised by the state-owned company.

It concludes that dual energy costs 20 to 32% more than electricity at Hydro's Flex D rate (dynamic pricing system), using central heating with storage heat and a heat pump.

Based on 2022 rates, it would cost $1,196 annually for an electrical system and $1,470 for dual-energy in existing buildings. The gap is greater for new homes, $892 for an electric system, $1,176 for dual energy. According to their calculations, it is also twice as expensive to heat with natural gas.

With the war in Ukraine and the rise in gas prices, the competitive advantage of electricity could even increase in the future, the study also suggests.

The heat accumulator, still little known to consumers, allows heating without fuel and has the particularity of storing heat. A way to decarbonize buildings while effectively managing peak winter electricity demand, an issue for Hydro-Quebec, say the groups.

In the United States, you see a lot of this type of system with dynamic pricing. In Ontario, as in Europe, there are heat accumulators. This market can also develop here, assures Jean-Pierre Finet, analyst at the Grouping of environmental organizations in energy (ROEE).

The costs of acquiring and installing this equipment are not taken into account in the study, but the groups point out that customers can benefit from subsidies from Hydro- Quebec (up to $10,000 for an accumulator, $5,000 for a heat pump).

Contacted by Radio-Canada, Hydro-Québec said it could react more fully after an analysis, but refuses the conclusion of the study.

A flag with the Hydro-Québec logo

One thing is certain, we cannot establish that one option is systematically more advantageous than the other, because there are too many factors to consider, said spokesperson Maxence Huard-Lefebvre by email.

According to the latter, all options must be used to ensure an energy transition. We will need a well-stocked toolbox […] Dynamic pricing, heat accumulators, heat pumps and dual energy are some of them.

However, according to the state company, only 40 heat storage systems have been installed despite an advertising campaign and a subsidy.

The Hydro-Énergir agreement has been denounced several times by consumer and environmental groups. Under the partnership, Hydro will pay its competitor 400 million in compensation, which will increase electricity prices by 1.43% by 2030.

The total bill could even reach 2.4 billion, according to the ROEE, when Hydro-Québec has finished compensating Énergir customers.

It's nonsense to push dual energy, it's much more economical to convert to electricity. Dual-energy natural gas is a poisoned gift to current and future Énergir customers, and to Hydro-Québec customers who will see their bills increase, says Mr. Finet.

Opponents also see this partnership as a way to sustain natural gas for years to come. They point out that the majority of GHG emissions related to the use of new constructions result from heating with natural gas.

Energir vehicles

There are several things that hang in this agreement. One doubts the motives behind this. We are not decarbonizing, we are 70% decarbonizing. There are other solutions that decarbonize 100%, says Emmanuel Patola, president of the environment committee of the Canadian Union of Public Employees (CUPE-Québec), which represents several Hydro employees.

The people who will embark on this offer will be taken for the long term. We collectively locked ourselves in the use of gas for several years. Hydro says this is the only solution. But no, the study shows us that there is another more effective and less expensive solution, he continues.

Énergir, formerly Gaz Métro, is 100% Quebec owned. It is 80.9% owned by the Caisse de dépôt et placement du Québec and 19.1% by the Fonds de solidarité FTQ. The group believes that the partnership with Hydro aims above all to help the natural gas distributor during the energy transition.

Everyone was surprised when the Caisse bought it from Enbridge […] We have the impression that we want to save Énergir at all costs because of this bad investment by the Caisse, believes Mr. Finet.

Hydro says that this partnership with Énergir will, on the contrary, allow Quebec society to save $1.7 billion compared to the complete electrification of natural gas customers.

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