After Massachusetts, Hydro-Québec has won over the State of New York, which has chosen it as its clean energy supplier for the next 25 years, which will become the most important export contract concluded by the State corporation.
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The decision was announced Monday morning by State Governor Kathy Hochul during New York Climate Week. The governor, who took over from Andrew Cuomo just four weeks ago, said two deluges had hit New York City during that short period. There is an urgent need to act against climate change, she said.
Hydro-Québec will be part of the solution for the American metropolis. Hydro-Quebec will provide 10.5 terawatt-hours of electricity that will pass through a 545-kilometer link that will pass under Lake Champlain and the Hudson River to link Quebec and the Astoria substation in Queens. This link known as the Champlain Hudson Power Express is being piloted by Transmission Developpers, a company of the investment firm Blackstone, already has all the required permits, and its construction could begin as early as next year. The current is expected to reach New York in 2025.
The 25-year contract will bring billions of dollars to Hydro-Quebec. “I feel enormous pride,” Prime Minister François Legault commented on Monday, specifying that Hydro-Quebec will derive revenues of over $ 20 billion from it.
The crown corporation, for its part, does not provide any figures. “It is a contract that will be profitable for both parties,” said spokesperson Serge Abergel.
Quebec electricity will help New York meet its greenhouse gas reduction targets. It will replace the fossil fuel that supplies energy to more than 1 million homes.
The terms of the contract are still to be negotiated, but they should be comparable to those of the agreement reached with Massachusetts, which covers a slightly lower volume of electricity (9.45 terawatt-hours) and a shorter period, i.e. 20 years.
Hydro-Quebec predicts that negotiations with New York will be less complicated than those with Maine, which is blocking the line that is to reach Massachusetts. “We are not immune to competitors who could block our way,” however, said his spokesperson.
Enough electricity?
The Crown corporation ensures that it has enough electricity to meet its obligations to Massachusetts and New York and to meet the increased demand in Quebec and the increased needs related to the electrification of transportation.
Hydro-Québec, however, does not rule out the possibility of having to build new plants. “The question will eventually arise, we cannot exclude it,” points out Serge Abergel. We have to think about it. ”
If new installations prove to be necessary, Quebecers’ bills will increase. “Any new supply has a price impact, this is the case for wind power and it would be the case for a new plant,” said its spokesperson.
According to Jean-Thomas Bernard, the question of new supplies will not arise for five or eight years. The two contracts signed by Hydro-Quebec will transform exports on the spot market into firm sales, he explains. “It won’t change much, except that Hydro will get a better price. ”
He recalls that the contract with Massachusetts provides for a starting price of around 5 US cents per kilowatt hour.
The large industrial customers of Hydro-Québec intend to ask questions about the price offered by Hydro-Québec to the Americans. “Does it sell for less in the United States, to companies that are our competitors? We don’t know, ”laments Jocelyn Allard, president of the Quebec Association of Industrial Electricity Consumers.
Likewise, industrial customers believe that Quebec customers should not pay for the portion of the transmission lines that will be built in Quebec to join the American network.
A partnership with the Mohawks
In Quebec, a 60-kilometer section of line will have to be built to connect the Quebec network to that of New York State. For the first time in its history, Hydro-Québec is partnering with an Aboriginal community to build the line and share the benefits.
The Mohawk Council of Kahnawake and Hydro-Québec will be co-owners of the transmission line that will be built in part on Aboriginal territory to join Champlain Hudson Power Express on the other side of the border. The community will receive income from the transit of electricity for a period of 40 years.
There is no question for Hydro-Quebec to go back and enter into such agreements with other aboriginal communities for existing transmission lines, the state corporation said.
Two proposals, one choice
Hydro-Québec had submitted two proposals in response to New York’s call for tenders. The first was a 100% supply of hydroelectricity produced in Quebec, and the second, a mixture of Quebec hydroelectricity and solar energy produced in upstate New York.
The first proposal, made up of 100% electricity from Quebec, was accepted. The contract to be concluded between the two parties will be submitted to the New York Public Service Commission for analysis and approval.
For its part, the promoter of the project, Champlain Hudson Power Express, intends to devote 40 million US dollars to the training of workers for the jobs offered by the energy transition and to finance at the cost of 117 million US the improvement of the health of Lake Champlain, the Hudson River and the Harlem River.
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