Quebec needs to build new hydroelectric dams to strengthen its position in Churchill Falls talks, says Legault

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Quebec Prime Minister Francois Legault speaks during a news conference at the Quebec City legislature on January 18.Jacques Boissinot/The Canadian Press

Quebec needs to press ahead with plans to build new hydroelectric dams to strengthen its bargaining power in upcoming talks with Newfoundland and Labrador over the Churchill Falls power purchase agreement, says Prime Minister François Legault.

“If we want to be in a good bargaining position with Newfoundland, we need to have a Plan B for Churchill Falls. And it means new dams,” Legault said Wednesday in Quebec City. He said he doesn’t want to be “forced to accept whatever tariff” Newfoundland Premier Andrew Furey proposes.

The comments are among the clearest yet from Mr. Legault about how his government thinks about Quebec’s future energy development, a topic that is sparking intense debate in the province following the surprise resignation last week of the chief executive. from Hydro-Québec, Sophie Brochu. They suggest that Legault is determined to build new dams, no matter the cost. He has already ordered the provincial crown corporation to update its feasibility studies on potential dam locations.

Any new construction would require the consent of the First Nations communities whose land would be affected, and they are in a more powerful position than when Quebec and Newfoundland concluded their original Churchill Falls agreement in 1969. Environmental concerns are also much greater, and Quebec has to show that it can minimize the destruction of forest and wildlife habitat that often comes with hydroelectric development.

But Quebec also faces mounting pressure on its energy supply, most of which is generated by Hydro-Québec’s network of dams and hydroelectric stations in the north of the province that were built decades ago. About 15 percent of the power the utility sells also comes from the Churchill Falls hydroelectric site in Labrador, one of the largest in the world. Hydro-Québec is a minority owner of the site.

Hydro-Québec predicts an end to its electricity surpluses by 2026, saying the province will need more than 100 terawatt hours (TWh) of additional power, more than half its current annual generating capacity, if it wants to achieve carbon neutrality. by 2050. To address that situation, a priority solution laid out in the utility’s five-year strategic plan is to step up energy efficiency. He also wants to renovate existing hydroelectric plants to generate more power and develop more wind power projects.

It is now clear that Mr. Legault also sees the new dams as part of the solution, not only to meet projected demand but also to strengthen Quebec’s hand in negotiations with Newfoundland and cement its stature as a major producer of renewable energy. . The premier is interested in expanding the province’s hydropower resources to attract investment and boost growth, particularly to attract companies in downstream industries such as battery development for electric vehicles.

“It is important to understand that all of our needs cannot be well served by wind or solar power alone,” Legault said Wednesday, speaking in English. “The beauty of dams is that you have sort of a battery, which is water, that you can use… when you have your peak periods.”

Mr. Legault’s government is preparing for negotiations to renew Hydro-Québec’s 1969 contract to purchase power from Churchill Falls. Under the current contract, which expires in 2041, Quebec buys more than 5,000 megawatts of power from Churchill Falls at 0.2 cents per kilowatt-hour, a small fraction of the power’s resale value.

The pact has generated decades of resentment in Newfoundland and Labrador and successive Newfoundland governments have pushed for a better deal, to no avail. Now, however, the province’s position has been unexpectedly strengthened by Quebec’s own looming supply problems, something Mr. Legault seems determined to tackle.

Building new dams in Quebec could prove challenging. Such megaprojects are much more difficult to build now than in the past because construction costs are higher and First Nations and environmentalists are more active. The Labrador Innu have sued Hydro-Québec for $4 billion in damages when their traditional territories were flooded for dams decades ago. “This is unethical,” said Etienne Rich, High Chief of the Innu Nation.

Legacy Hydro-Québec dams generate power at 3 cents per kilowatt-hour, but new dams face costs at least four times higher. The utility’s most recent hydroelectric development is the Romaine River project, which was built in four phases starting in 2009 and completed late last year.

Hydro-Québec told The Canadian Press in December that it had no other dam projects on the horizon, citing long construction periods and high costs. Other sources of renewable energy, such as wind, have also become more viable, the utility said.

In Newfoundland, the government of Prime Minister Furey recently created the Churchill River Energy Analysis Team with a mandate to “strengthen Newfoundland and Labrador’s bargaining position by 2041” and explore opportunities for future hydropower development on the river.

The province’s experience in undertaking on its own the 824-megawatt Muskrat Falls hydroelectric development, which went billions of dollars over budget and led to a federal bailout, has underscored the need for the government to attract outside partners to proceed with any other development, including the much larger 2,250 MW Gull Island hydroelectric project downstream of Churchill Falls.

An obvious partner is Quebec, given that Hydro-Québec has a 34 percent stake in the Churchill Falls project and that selling the power from Gull Island likely means transmission lines through Quebec. But partnering on any new hydroelectric development would mean putting aside any lingering resentments.

That’s exactly what two provinces should be doing as they prepare for talks, according to Ed Hollett, a public policy commentator who served as an aide to then-Newfoundland Premier Clyde Wells.

“The expiration of the Churchill Falls contracts in 2041 is an opportunity for Quebec and Newfoundland and Labrador to fundamentally change their relationship and enter into a pact that will truly benefit both parties,” Hollett recently wrote in La Presse. “However, to achieve this, Quebec will clearly have to give up getting another ridiculous fee, on the one hand, and Newfoundlanders will have to put aside their vindictive animosity, on the other.”

With a report by Konrad Yakabuski

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