(Montreal) Hydro-Quebec is preparing to respond to a call for proposals in the hope of delivering a large volume of hydroelectricity to New York City under a regulatory change in that US state.
Posted on October 16, 2020 at 11:27 a.m.
The Utilities Department has decided to add an additional category to its clean energy standard, which the crown corporation believes makes the energy produced at its existing plants eligible for renewable energy credits – a form of financial incentive.
Within the next two months, the New York authorities will seek proposals for 1,500 megawatts (MW) of energy and Hydro-Quebec will be in the running. A contract would allow the creation of an interconnection between Quebec and New York. According to the 134-page document from the Utilities Department, eventually the volume could reach 3,000 MW.
“These credits will make our bid much more competitive,” Crown corporation spokesperson Gary Sutherland said in a telephone interview. Currently, in the New York market, we do not receive anything except the price of energy while the wind producers receive this credit. ”
When questioned, he did not go into the mechanics surrounding the application of these energy credits or their impact on Hydro-Quebec’s bid.
The changes announced in New York City by Governor Andrew Cuomo are part of an effort to bring renewable energy supplies to 70% of total consumption by 2030.
If the authorities rely on solar and wind power, they have decided to include hydropower in their criteria to speed things up.
Hydro-Quebec was already discussing directly with New York City about a possible supply contract. If it wins the call for proposals, the crown corporation could have the New York agency rather than the metropolis as its client.
For Pierre-Olivier Pineau, holder of the Chair in Energy Sector Management at HEC Montréal, Hydro-Québec has a much better chance of winning a contract through a call for proposals from a new agency. -Yorkese only by negotiating directly with the metropolis.
“That the mayor of New York is interested in electricity without greenhouse gas emissions is a very good thing, but energy policies emanate from the state, which sets the rules, he said. he explains. If state rules do not converge with (the City’s) supply desire, this poses challenges. ”
Given that the Crown corporation is able to offer a competitive price and offer continuous supply – unlike solar and wind – the risk is “very low” that the latter will be rammed by the pawn. another player in the call for proposals, said Pineau.
A proposal adopted by the State of New York would allow Hydro-Québec to build a new interconnection at the border. The Crown corporation has not named a project, but the Champlain Hudson Power Express (CHPE) line, built with Transmission Developers, has all the necessary authorizations. The work could begin with the signing of a contract.
This project can transport between 1000 and 1250 MW.
The transmission line would be added to the New England Clean Energy Connect (NECEC), which, on American soil, must pass through Maine in order to supply Massachusetts as part of a major supply contract. Massachusetts will pay 4.8 US cents per kilowatt hour – which does not include transportation costs.
Unlike CHPE, NECEC has not yet obtained all the necessary authorizations and faces a lot of opposition south of the border.
On Quebec soil, the interconnection project with New York provides for the construction of an underground line of 58 kilometers between the Hertel substation in La Prairie and the American border. On the American side, the cable would be partially buried under Lake Champlain and the Hudson River to New York.