Electricity: Quebec needs independent producers’ help, says MEI

• The Legault government is working on a bill that would allow business-to-business sale of electricity in Quebec, according to Radio-Canada.

Montreal, January 19, 2024 – Allowing the business-to-business sale of electricity would help Quebec in the context of its lack of electricity for industrial development projects, according to a researcher from the Montreal Economic Institute.

“Hydro-Québec doesn’t have the electric supply needed to meet the demand from Quebec’s development,” explains Gabriel Giguère, a policy analyst at the MEI. “By allowing independent electricity producers to sell directly to businesses, Quebec would make sure Hydro’s lack of electricity doesn’t prevent the province’s development.

“We’re glad to see the Legault government seems to agree with our recommendation.”

The Legault government is working on a bill that would allow independent electricity producers to sell their energy directly to other businesses, according to information unveiled by Radio-Canada this morning.

Last July, the MEI recommended such a policy change in the submission it sent as part of the public consultations on Quebec’s energy future.

According to the government, Hydro-Québec would only have 500 megawatts of capacity available for industrial development by 2028. By contrast, the projects presented by companies interested in investing in Quebec would need more than 30,000 megawatts of capacity, the researcher notes.

Mr. Giguère also highlights that, despite an ambitious plan to increase electric capacity, Hydro-Québec would only add 8,000 to 9,000 megawatts of capacity by 2035, at a cost of $90 billion.

“Hydro-Québec’s action plan is both necessary and ambitious, but it won’t be nearly enough to meet the demand that stems from Quebec’s ongoing development,” says Giguère. “Every time an independent producer will sell electricity to a business, it will lower the pressure on Hydro-Québec, its infrastructure, and the taxpayers that are ultimately responsible for its financing.”

An MEI-Ipsos poll conducted last August found that 62 per cent of Quebecers were in favour of allowing independent producers to sell their electricity directly to businesses, given the context surrounding the end of Hydro-Québec’s surpluses.

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The MEI is an independent public policy think tank with offices in Montreal and Calgary. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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