November 6, 2023
Hydro-Québec has presented its Action Plan 2035 – Towards a Decarbonized and Prosperous Québec. This plan will make it possible to reduce greenhouse gases, meet expected growth in electricity demand and offer customers a reliable, simple and affordable service.
“Climate change is intensifying and we must take action. Québec’s clean electricity will be the driving force of the energy transition, which will require a collective effort. In the coming years, our Action Plan 2035 will guide us towards the attainment of our goals: to replace fossil fuels by clean electricity, create sustainable prosperity and place customers at the heart of our decisions,” said Michael Sabia, Hydro-Québec’s President and Chief Executive Officer.
Reliable, simple and affordable service
To ensure the reliability of the electricity grid, Hydro-Québec will significantly increase investments, which will total from $45 to $50 billion by 2035. We will first work to stabilize the situation regarding power outages and then go on to reduce their frequency by 35% over the next 7 to 10 years. To this end, we will step up vegetation control work, adopt innovative practices like the direct, or “light,” burial of power lines, and roll out new equipment, such as composite poles.
In addition, we will offer our customers a simplified experience when they interact with Hydro-Québec by deploying a portal providing a single point of access and simplifying our various online tools.
Electricity rates will remain affordable. Residential rates will be limited to inflation, up to a ceiling of 3%, while commercial and industrial rates will remain competitive.
Energy efficiency will play a key role in helping reduce customers’ electricity bills. Hydro-Québec aims to double energy savings to 21 TWh, or 3,500 MW, by 2035. To achieve this, we will enhance financial incentives to cover up to 50% of the cost of high-efficiency equipment. We will also provide assistance to encourage energy-efficient renovations.
Twice as much electricity required by 2050
Based on a long-term forecast of energy requirements, we currently estimate that we will need an additional 150 to 200 TWh to meet electricity demand in Québec by 2050. That’s double the electricity consumed today. To handle this growth, we will need an additional 60 TWh by 2035, which means adding between 8,000 and 9,000 MW of capacity. Of this increase, 75% will be used to decarbonize Quebecers’ current consumption, while 25% will be used to support economic growth, particularly in industrial sectors involved in the energy transition.
In concrete terms, Hydro-Québec plans to triple wind power generation by integrating more than 10,000 MW of wind capacity into the grid by 2035. In addition, from 3,800 to 4,200 MW of new hydropower generation will be added by increasing the capacity of existing generating stations and developing new hydropower facilities, including a pumped-storage facility. The energy mix will also include solar energy and battery storage, and we will consider other technologies currently under development around the world.
The investments required to increase our generating capacity and boost the capacity of our transmission grid will range from $90 to $110 billion. Additional investments will be needed to ensure service quality and reliability.
Partnering with Indigenous communities
Hydro-Québec will work in collaboration with the Québec government towards economic reconciliation with First Nations and the Inuit. The dialogue will be based on three fundamental principles: establish partnerships with Indigenous communities, simplify their access to financing, and jointly define the terms of the projects we will carry out with them. Ensuring Indigenous representation in our workforce and decision-making bodies will also be a priority.
Hydro-Québec’s Action Plan 2035 revolves around five priorities.
- Increase our investments in the power grid to offer our customers reliable, high-quality service at an affordable price.
- Innovate to encourage our customers to treat electricity as a valuable resource that should be used wisely.
- Identify and launch the best projects that will enable us to generate more electricity to support Québec’s ambitions and remain open to all options available to us.
- Work towards economic reconciliation with First Nations and the Inuit, in collaboration with the Québec government.
- Transform our ways of doing things to better meet our customers’ needs and support Québec’s decarbonization and economic prosperity.
After a period of stability, we are entering a major phase of growth that will require significant investments. We estimate that these investments and the operating expenses that will be necessary to carry out the Action Plan 2035 will total from $155 to $185 billion. This translates into an annual average that is three to four times higher than those of the past five years.
Initiating dialogue around this society-wide endeavor
Given the magnitude of the challenge we face and the important role that so many people will have to play in the implementation of this plan, we will initiate focused dialogue with our stakeholders and the population in the coming months. We would like to hear from Indigenous communities, municipalities, energy experts and representatives from the business community, the labor movement, environmental and consumer groups, the construction industry and our employees. We will also use digital channels to allow the Québec population to join in the conversation. These discussions will help us fine-tune our proposed solutions and the ways to implement them. At the conclusion of this dialogue, we will present the results in spring 2024.