|
Vision of cheap power is trumping environment: "Hydro-Quebec aims to divert majestic Rupert River." |
|
|
|
|
Wednesday, 31 January 2007 |
|
Montreal Gazette By Peter Hadekel.
If the world wasn't in the grip of high energy prices and panic over global warming, there would probably be a lot more debate over Hydro-Quebec's new project to expand the Eastmain 1 powerhouse and divert the Rupert River.
After all, the course of one of Quebec's most majestic rivers will be altered over hundreds of kilometres, with potentially far-reaching consequences on the environment and on Cree communities in northern Quebec.
But after eight years of planning, environmental review and negotiation with Cree leaders, it all came down to one eye-catching number.
Five cents a kilowatt-hour.
That's the estimated production cost of the power that will come from the new dam. It's bargain-basement stuff at a time when everybody else is paying luxury prices for scarce energy.
And it will give Hydro a nice profit margin at a time when market prices for electricity start around 7 cents a kilowatt-hour and move up.
"When I talk to colleagues outside of Quebec, they are really envious that we are able to meet our energy demand with renewable resources," Hydro-Quebec president and chief executive Thierry Vandal said in a recent interview.
"Five cents a kilowatt-hour is very competitive in today's market."
Indeed, Vandal calls the $5-billion project the most important of the decade, as it will add more than 900 megawatts of generating capacity to Hydro-Quebec's network and supply 8.5 billion kilowatt-hours annually, enough to power 425,000 homes.
This is a project Hydro has long insisted is essential to meet growing demand in the province.
That argument, however, has since been muddied by the utility's stated desire to export the power to neighbouring provinces and states.
It sounds like a mixed message: We really need that power, but we're going to sell it when we get it.
When I asked Vandal about the apparent contradiction, he had a quick response.
"All large projects, when they come in (to service), do so with significant increments of production. Obviously, not all that production can be absorbed by the Quebec market in the first few years.
"It's normal, if water conditions are normal and rainfall conditions are normal, that most of that electricity would be exported. Then, as growth (in demand) continues in Quebec, all that electricity gets reabsorbed.
"We've always said that we've developed this for the Quebec market."
Vandal pointed out that the first two phases of the James Bay hydro project initially supplied export markets but were fully absorbed by domestic consumption by 2000.
Hydro will be walking on both sides of the line when it sells power to out-of-province customers while pushing energy efficiency to consumers and companies at home
.
Just as it plans to splurge on the new dam, the utility is in the midst of a campaign to persuade consumers - especially large-scale users in the corporate sector - to cut back on their use of power.
Vandal said: "Energy savings are very valuable. But energy savings can not (account for) all growth in demand. So there is continued need for new supplies."
Hydro is hoping to generate annual savings of 8 billion kilowatt hours by 2015 - the size of the new Eastmain project - with a range of programs and financial incentives.
Indeed, he said a growing number of Quebec companies have been able to cut consumption by five per cent or more by investing in new technology.
With subsidies available to help them design energy-saving projects, many corporate clients have submitted proposals to Hydro, he said.
And Vandal noted they are proposing such projects even though they already pay the most advantageous rates in the province as large-scale users.
Hydro is investing more than $1 billion to help push conservation measures. Another, more effective way to reduce demand might be to simply charge higher prices for the product, but you won't get Vandal to go down that road.
"We work within a legislated (price) framework that has a lot of advantages," he said. "It works, and it's well adapted to market realities."
|
