Overview Of Hydro‑Québec’s Energy Resources
Overviewof Hydro‑Québec’sEnergy ResourcesSetting new sightswith our clean energyNovember 2019
HighlightsHydro‑Québec Distribution’s Electricity Supply Plan 2020–2029 sets out the anticipated electricityneeds of Québec customers for the next 10 years and the means by which they will be met.The division submits an electricity supply plan to the Régie de l’énergie [Québec energy board]every three years and updates it the two subsequent years.Québec’s electricity demand will continue to grow over the 2020–2029 period, driven by the vigorof the economy and the development of new markets such as the data center sector. As a result,unused heritage pool electricity, often referred to as a surplus, will gradually decrease.According to present forecasts, Hydro‑Québec Distribution’s current and planned electricitysupplies will be sufficient to meet energy needs until 2026 and capacity needs until 2025. No newsupplies will therefore be required in the short term. On a horizon of three to five years, however,calls for tenders could be launched if demand increases as expected.Cover pageReservoir and spillway ofthe Robert‑Bourassa development.Hydro-Québec Overall, the generating capacity of Hydro‑Québec’s generating stations and the company’sother sources of supply exceeds its requirements by more than 40 TWh of available energy eachyear. Since this situation is expected to continue for a number of years, Hydro‑Québec will haveenough energy to power Québec’s economic development while boosting its contribution to thedecarbonization of neighboring markets by signing new long-term export contracts.Overview of Hydro‑Québec’s Energy ResourcesHydro‑Québec Distribution plans to implement an energy transition in all of its off-grid systems(those not connected to the main grid) by integrating clean, renewable energy sources into thesesystems. The division plans to launch its energy-transition initiatives in all of these systems bythe end of 2020.2
Hydro‑Québec: One Company,Four DivisionsIn 1997, the North American wholesale electricity market opened to competition. Hydro‑Québeccreated the TransÉnergie division (which later became “Hydro‑Québec TransÉnergie”) given thiscontext. The division’s mission is to provide non-discriminatory access to Québec’s transmissionsystem so that all stakeholders can benefit from reliable, high-quality power transmission. Therestructuring was necessary so that regulatory authorities could allow Hydro‑Québec to buy andsell electricity on neighboring cDistributionDesigns, builds andrefurbishes generatingand transmissionfacilities, mainly forHydro‑QuébecProduction andHydro‑QuébecTransÉnergie.Generates electricityto meet most of theneeds of the Québecmarket and to sell onexport markets. Almost100% of the electricityit generates uses theforce of water.Operates a highvoltage powertransmission systemso that large amountsof electricity output byour generating stationscan be transmitted toQuébec’s distributionsystems and exportmarkets.Supplies electricity tothe Québec market anddelivers reliable powerand quality service toall Quebecers. becInnovation, équipementet services partagésOverview of Hydro‑Québec’s Energy ResourcesIn 2000, Hydro‑Québec confirmed the functional separation of its generation, transmission anddistribution activities by creating two other divisions: Hydro‑Québec Production, which is now partof Exploitation et Hydro‑Québec Production, and Hydro‑Québec Distribution. A fourth division,Hydro‑Québec Équipement (which became Hydro‑Québec Innovation, équipement et servicespartagés), was added in 2002.3
Overview of Hydro‑Québec’sAvailable Energy*Sustainability Report 2018 * Source: Hydro‑Québec,Electricity that Hydro‑Québec Distributiondoes not use is often referred to as “surplus”as well. More specifically, this is the heritagepool electricity the division has access tobut does not require to meet the needs ofQuebecers, primarily during the summermonths. However, we anticipate that all ofthis surplus will be needed in the comingyears to meet Québec’s growing demand,arising specifically from the strength ofthe economy and the development of newmarkets such as data centers.Hydro-QuébecIn the last several years, the capacity of itsgenerating stations and other sources ofsupply has surpassed needs by more than40 TWh per year. This surplus is the “availableenergy.” Given the expected increases inprecipitation, the company will continue tohave substantial amounts of available energyto supply Québec’s economic developmentand to boost its contribution to thedecarbonization of neighboring markets.Hydro‑Québec’s surplus, or “availableenergy,” is the electricity it is able togenerate over and above the volumeHydro‑Québec Production requires inorder to supply heritage pool electricityand fulfill its contractual commitmentswith Hydro‑Québec Distribution andneighboring markets. With a few rareexceptions, this surplus can be storedin our 28 large reservoirs, which canaccumulate up to 176 TWh (almost 1.5 timesthe annual consumption of the six NewEngland states), or exported to neighboringmarkets. Hydro‑Québec is in an enviableposition as the “battery” of northeasternNorth America. Over the coming years,we expect to sell 9.45 TWh of this energyto Massachusetts under contracts withdistributors from this state. We expectto negotiate other long-term exportcontracts. We will also be in a position tomeet Québec’s needs if economic growthcontinues.Hydro‑Québec requires substantial means tomeet its commitments to its Québec customersand sell electricity on export markets tobenefit the entire population. To achievethis, Hydro‑Québec operates a vast fleetof generating stations having an installedcapacity of 37,310 megawatts (MW). In 2021,245 MW of capacity will be added whenRomaine-4 generating station is commissioned.Hydro‑Québec has other sources of supply aswell, with a total capacity of 10,314 MW undercontracts with other power producers.Overview of Hydro‑Québec’s Energy ResourcesHydro‑Québec’s “surplus” energy4
Meeting the Needs of QuébecHydro‑Québec Distribution is responsible for providing an adequate and reliable supply ofelectricity—an essential service—to the Québec market. To achieve this, it must:Z forecast the electricity needs of its Québec customers,Z determine whether its current and planned supplies are sufficient, andZ develop strategies to add to its supplies as needed, while complying with the requirementsof regulatory bodies in the energy sector.The results of this exercise are presented every three years in an electricity supply plan that coversthe following 10 years. This document is deposited with the Régie de l’énergie and updated thenext two years.Forecast of demand in QuébecAssessment of current and plannedsuppliesWhich strategies havebeen authorized?Are any anticipated needsnot covered?Implement selectedsolutionsElaboration of strategies tomeet additional needsDo our strategies comply with regulatory requirements?Presentation to regional regulatorybodies North American Electric ReliabilityCorporation (NERC) Northeast Power CoordinatingCouncil (NPCC)Approval by the Régie de l’énergie Filing Public hearings Decision What means are available to us?Hydro-QuébecWhat will our needs be in the future?Overview of Hydro‑Québec’s Energy ResourcesHydro‑Québec Distribution’ssupply process5
Forecast of Electricity Demandin QuébecThe first step in the supply process involves forecasting electricity consumption in Québec duringthe period in question.GROWTH DURING THE 2019–2029 PERIOD 12.5 TWh** 1 TWh consumption of 54,000 ic solarEMERGING TECHNOLOGIESElectric vehicles 7.8 TWh 3.7 TWh 1.3 TWh 2.3 TWh* 1 TWh consumption of 54,000 householdsZ the decarbonization and electrificationof the economy and energy-efficiencymeasuresZ the impact of climate change ontemperature and on heating needs Z development of markets such as datacenters, cryptocurrency and greenhousefarmingZ emerging technologies adopted bycustomers, such as electric vehicles, homeautomation, photovoltaic solar panels andenergy storage systemsHydro-QuébecZ natural growth related to economic anddemographic development (for example,level of economic activity, new residentialconstruction and the needs of largeindustrial companies)Overview of Hydro‑Québec’s Energy ResourcesThis forecast must take into consideration multiple factors that will increase or decrease demandfor electricity:6
Forecast of Electricity Demand in Québec11% 5.6 TWhPercentage of electric and plug-in hybridImpact of energy-efficiency measures applied by businessvehicles anticipated in Québec’s fleet by 2029and residential customers from 2019 to 2029(635,000 vehicles)(equivalent to the consumption of about 300,000 households)Graph:Peak periodsPeak periodsThis graph shows electricity demand on January 22, 2019, the day on which demandwas at its highest in Québec during the winter of 2018-2019. Demand fluctuatedbetween a minimum of 30 979 and a maximum of 38,159 megawatts. The maximumwas reached at 8 a.m. Two peak periods were observed: from 6 to 9 a.m. and from 4to 8 periodPeakperiod26,00024,00022,0002345678910 11 12 13 14 15 16 17 18 19 20 21 22 23 24Time of dayDemand on January 22, 2019 1Overview of Hydro‑Québec’s Energy Resources20,000Hydro-QuébecDemand (MW)We must also consider thatmore than 80% of Québechouseholds use electricheating. Therefore, duringwinter cold spells, thereis a very high demand forelectricity during daily peakperiods, which occur in themorning and in the evening.This is a determining factorin demand forecasts.7
Hydro‑Québec Distribution’sSupplyPEAK CAPACITY(MW)ANNUAL OUTPUT(TWH)37,442165.0Contracts Biomass and biogas3462.5Small, privatelyowned hydroelectricgenerating stations1440.6{Empty Cell}Heritage poolelectricityTo integrate these generating options intothe grid, they must be combined with astable and readily dispatchable energysource. Hydroelectricity currently playsthis role in Québec, a solution that is bothefficient and ecological.Hydro‑Québec Production:our main supplier of clean energyHydro‑Québec Production has a fleet of 63 generating stations, 62 of which are hydro electric, making it one of the world’s largest hydropower producers. Almost 100% of theelectricity is generated using the force of water, a renewable energy source with very lowgreenhouse gas (GHG) emissions and no toxic waste. This clean energy is generated forthe population of Québec and for export markets.Overview of Hydro‑Québec’s Energy ResourcesMAXIMUM CONTRIBUTION{Empty Cell}Wind power and photovoltaic solar powerare intermittent and variable sourcesof energy. In other words, the wind andthe sun are not always available to meetthe demand for electricity, and theirintensity fluctuates. Conversely, demandis not always there when wind power orphotovoltaic generation is at its peak. Hydro‑Québec Distribution’s sourcesof supplyComplementarity ofhydroelectricity and intermittentor variable sources of energyHydro-QuébecHydro‑Québec Distribution relies on a longterm supply portfolio consisting of heritagepool electricity (essentially hydroelectricity)and contracts with Hydro‑Québec Productionand independent producers of renewableenergy. It also uses various energyefficiency initiatives to reduce its customers’consumption.8
In 2000, the Québec government passedthe Act to amend the Act respecting theRégie de l’énergie, which provides for theestablishment of heritage pool electricity,intended to guarantee affordable electricityrates to Québec customers. Heritage poolelectricity, which consists of a maximumannual reference volume of 165 TWh andwhich Hydro‑Québec Production is required tosupply to Hydro‑Québec Distribution, is roughlyequal to the amount of electricity generatedby “heritage” facilities, that is, those in theLa Grande complex and generating stationson the Rivière Manicouagan, the Rivière desOutaouais (Ottawa River) and the Fleuve SaintLaurent (Saint-Lawrence River). It is the mainsource of supply for Hydro‑Québec Distributionand meets approximately 90% of Québec’sneeds. The initial price for heritage poolelectricity was 2.79 per kilowatthour (kWh).It has been indexed annually with inflationsince 2014. On April 1, 2019, the rate was setat 2.96 /kWh.To meet the needs of the Québec marketthat cannot be met by the heritage pool,Hydro‑Québec Distribution has concludedsupply contracts with various electricitysuppliers through calls for tenders and purchaseprograms. To date, it has signed 78 contractswith independent power producers andHydro‑Québec Production. Long-termsupplycontractsHydro-QuébecHeritage pool electricitysupplied by Hydro‑QuébecProductionOverview of Hydro‑Québec’s Energy ResourcesHydro‑Québec Distribution’s Supply9
Hydro‑Québec Distribution’s SupplyEnergy efficiencyA reduction in electricity consumption by our customers directly impacts our supply needs,especially during peak periods. Hydro‑Québec will therefore continue to focus on raisingawareness of best practices in energy efficiency and on financial support and helping customersmanage their energy use in the coming years.Beginning in December 2019, we will be offering dynamic pricing in the form of a rate or credit.Residential and business customers who take advantage of dynamic pricing will save when theyreduce their electricity consumption at our request during peak periods in the winter months.Residential customersBusiness customersZ The Customer Space offers various tools socustomers can better understand how theirhabits impact their electricity bill, evaluatethe consumption of certain appliances andreceive a personalized diagnostic.Z Various programs offer energy efficiencymeasures adapted to the needs of Québecbusinesses and provide financial support.Overview of Hydro‑Québec’s Energy ResourcesZ We also offer support services to helpbusinesses interested in developingenergy-efficient strategies. Z The interruptible electricity rate optionis designed for industrial customers.Customers who agree to curtail theiroperations during peak periods will receivea credit.Hydro-QuébecZ The Energy Wise site offers tips to helpour customers choose the most energyefficient products and apply measures toreduce their electricity consumption andthus lower their electricity bill.Z The Demand Response program forbusiness customers offers financial supportto eligible customers who reduce theirdemand during peak periods.10
Strategies for Balancing Supplyand DemandHydro‑Québec Distribution must ensureit has an adequate supply to meet itscustomers’ need, or demand, at all times.It must also maintain a margin to dealwith unforeseen circumstances, such asextreme weather events or higher-thanexpected economic growth. Customerdemand will vary over the next 10 yearsand require tailored supply strategies. 4,000 MW 5 TWhAdditional capacity needsPotential shortfall in the nextduring extreme winterfive years if the need for electricitytemperaturesis higher than expectedIn its Electricity Supply Plan, Hydro‑Québec Distribution sets out the balance between the projectedsupply and demand for two measures of electricity: power, or capacity, and energy.Energy is power multiplied by time,measured in watthours (Wh, MWh or TWhin this document). For example, using 1 Wover 3 hours corresponds to 3 Wh.Example: The power demand ofHydro‑Québec Distribution’s customersat the peak of winter 2018-2019reached 38,159 MW at 8 a.m. on January 22,2019.Example: For the day the highest demandwas recorded during winter 2018-2019,energy consumption reached 816,800 MWh. Power, or capacity, is the amount ofenergy required or generated at a specificpoint in time. It is calculated in watts(W or MW in this document).Overview of Hydro‑Québec’s Energy ResourcesWhat is energy?Hydro-QuébecWhat is power?11
Strategies for Balancing Supply and DemandEnergy balanceCapacity balanceThe energy balance demonstrates the status ofelectricity supply contracts. It indicates that thetotal electricity supply currently contracted byHydro‑Québec Distribution is sufficient to meetthe needs of Québec customers until 2026.The capacity balance indicates the supplystatus for the annual winter peak forecast,that is, when electricity consumption is likelyto be at its highest. The graph shows thatHydro‑Québec Distribution can ensure acapacity balance until winter 2024-2025 bymanaging power demand and making powerpurchases on short-term markets.Over the next three to five years, however, callsfor tenders could be issued if demand increasesas expected. Hydro‑Québec Production, whichhas surplus energy, and wind farm owners,whose contracts will expire during this period,could submit proposals.Graph: Energy balanceThis graph shows energy demand forecasts for 2020–2029and how Hydro-Québec Distribution plans to meet thedemand with the following sources of supply:heritage pool electricityelectricity supply contracts and management methods inplace to reduce demandpurchases on short-term marketsadditional supplies requiredEnergy205demand is expected to increase by 12.5 terawatthoursover the period.The amountof unused heritage pool electricity will decrease200as a result, to 0.6 terawatthours in 2029. Purchases on shortterm markets will increase, and additional supplies will be195beginning in 2027.requiredGraph: capacity balanceThis graph shows power demand forecasts for 2020–2029and Hydro-Québec Distribution’s means for meeting thedemand. These means are as follows:heritage pool electricityelectricity supply contracts and management methods toreduce demanddemand response measurespurchases on short-term marketsadditional supplies requiredPower demand will increase by approximately 3,200megawatts over the period.Demand response measures will help reduce demand duringpeak periods in the coming years, and purchases on shortterm markets will increase. Additional supplies will be requiredbeginning48,000 in winter 2025-2026.46,00044,000190185Power (MW)Energy 202020212022 2023 2024 2025 2026 2027 2028 20292019YearWinterHeritage pool electricityElectricity purchase contracts and management methodsDemand response measuresPurchases on short-term marketsPurchases on short-term marketsAdditional supplies required* Including transmission and distribution losses.RequirementsAdditional supplies requiredContracts and management methods Heritage pool 2026-20272027-20282028-202916020165Overview of Hydro‑Québec’s Energy Resources17012
Strategies for Balancing Supply and DemandStrategy 1Optimize available supply.Some supplies can be adapted accordingto needs. This is the case for heritage poolelectricity, which provides great flexibility toHydro‑Québec Distribution. Heritage poolelectricity is divided into 8,760 different hourlyvalues; the smallest amounts are deliveredin the summer, when the province’s needsare lowest, and the highest are delivered inthe winter. Heritage pool electricity helps tobalance supply and demand in this way.and other periods, especially during thewinter months, where additional purchasesare required. In such cases, Hydro‑QuébecDistribution buys electricity on short-termmarkets.Unused heritage pool electricityTWhGraph: Unused heritage pool electricityThis graph indicates that the amount of unused heritage7pool electricitywill decrease over the next 10 years.The expectedsurpluses are as follows: 6 terawatthours6in 2020, 4 terawatthours in 2021, 2.5 terawatthours in2022, 25 terawatthours in 2023, 1 terawatthour in 2024,2 terawatthoursin 2025, 3 terawatthours in 2026, 1.54terawatthours in 2027, 0.4 terawatthours in 2028 and 0.63terawatthoursin 2029.During the course of a year, because of theseasonal variations in supply and demand,there are periods when some of the heritagepool electricity is not used (often referred toas Hydro‑Québec Distribution’s 0282029Graph: Seasonal characteristics of supply and demandSeasonalcharacteristicsof supplydemandThis graph showsthat demand is muchhigher inandthe winterthan in the summer and that supply is adapted in consequence.Additional purchases are required to meet the demand from November to March, but throughout the rest of the year, and during24,000the summerin particular, Hydro-Québec Distribution does not use all of the heritage pool electricity it has access to.22,000Unused heritage poolelectricity14,000Needs of the Québec marketUnused heritage pool leJunMSeHeritage pool electricity and supply contractsNeeds to be metayrilApcharMuaFebrnuaryry12,000Overview of Hydro‑Québec’s Energy Resources16,000 18,000JaMWhNeeds to be metHydro-QuébecNeeds to be met20,00013
Strategies for Balancing Supply and DemandStrategy 2Offer new energy-efficiency measures.To compensate for the expected increase inpower demand, Hydro‑Québec Distributionintends to prioritize the development ofenergy-efficiency measures, and in particulardemand response measures for all customercategories.To do this, it will rely on Hilo, a new range ofproducts and services available beginning in2020. Load shaving during peak periods willbe achieved through technological tools thatallow customers to easily manage energy userelated to certain loads, in particular heating.Hydro‑Québec Distribution estimates that areduction in power demand of 600 MW couldbe reached by 2028 as a result.In addition, the division plans to modify theDemand Response program for businesses andthe interruptible electricity rate option offeredto industrial customers to maximize the impactof these measures on the capacity balance.Energy is getting smarter with HiloHydro‑Québec is moving toward newmarkets and focusing on its expertisein power system management and itsleadership in renewable energy andtechnological innovation.The Hilo model is a winner on all fronts:Z for the environment – reduction of GHGemissions and electricity needsZ for customers – money and energysavings Z for the Québec economy – developmentof new markets and contribution tocollective wealthHydro-QuébecHydro‑Québec’s brand-new subsidiary, Hilo,will begin offering smart home productsand services. It will then expand to provideenergy services for businesses as well as inthe areas of electric mobility, smart storageand solar self-generation.Overview of Hydro‑Québec’s Energy ResourcesZ for Hydro‑Québec – diversification andincrease in sales14
Strategies for Balancing Supply and DemandStrategy 3Plan for new supply in the long term.According to the 2020–2029 Plan,Hydro‑Québec Distribution’s current andplanned electricity supplies will be sufficientto meet energy needs until 2026, and capacityneeds until 2025. This outlook takes intoaccount several new energy-efficiencymeasures, and specifically demand responsemanagement for all customer categories.No new supplies will therefore be requiredin the short term. On a horizon of three tofive years, however, calls for tenders could belaunched if demand increases as expected.Acquiring new supplies through a tendering processTo enter into supply contracts, Hydro‑QuébecDistribution must launch a tendering processas set out in the Act respecting the Régie del’énergie. Calls for tenders must be issuedat least four years before the commissioningof the facilities concerned. Hydro‑QuébecProduction as well as independent powerproducers can submit bids, on conditionthat they meet the criteria approved by theRégie de l’énergie. These criteria are basedon three main principles:Z ensure reliable electricity serviceHydro‑Québec Production would be able toparticipate in upcoming calls for tenders byoffering its available energy. Wind farm ownerswhose contracts will expire in upcoming yearscould also submit new projects.The Act respecting the Régie de l’énergierequires that Hydro‑Québec Distribution dealwith all participants in a fair and impartialmanner.Diagram: Acquiring new supplies through a tenderingprocessZ favor renewable energy sources Beginning when? Energy or capacity? Winter or year-round? Baseload or variable energy?Establish criteria for thecall for tenders and theterms and conditions forsubmitting a proposalObtain the Régie del’énergie’s approval ofthe criteria and termsand conditions for thetender callAward contractsIssue the call for tendersto producersCommission newgenerating facilitiesObtain the Régie del’énergie’s approval ofcontracts How much?Hydro-QuébecNeeds analysisOverview of Hydro‑Québec’s Energy ResourcesZ obtain the best possible price15
Supplying Off-Grid SystemsHydro‑Québec Distribution delivers renewable electricity to more than 99% of customersconnected to its main grid. However, a minority of customers are not connected to the main gridbecause they live in a remote region. These customers are served by 22 off-grid systems, whichmust produce their own power, often using diesel generating sets. Hydro‑Québec has, however,undertaken to connect two of these regions to the main grid.To meet the needs of off-grid systems,Hydro‑Québec prioritizes energy-efficiencymeasures and the transition to renewableenergy.Decisions concerning transition projects arebased on four guiding principles:Z positive environmental impactZ reliable electricity serviceMaintaining service reliabilityIntegrating renewable energy into an off-gridsystem involves more than adding storagebatteries to ensure service reliability. A secondgeneration source is also required and mustbe available at all times. For this reason,diesel-powered supply must be maintained.As a result, we will be replacing certain dieselgenerating sets and adding new ones duringthe period covered by the Supply Plan.Z favorable reception by communities Hydro-QuébecBy the end of 2020, the division hopes tolaunch transition initiatives in all off-gridsystems.Overview of Hydro‑Québec’s Energy ResourcesZ lower operating costs16
Supplying Off-Grid SystemsEnergy transition on off-grid systemsQUAQTAQTASIUJAQWe have alreadyinstalled solar panelsand batteries to storeenergy.A hybrid generating stationintegrating renewableenergy will be commissionedin NTo prepare our other facilities for theintegration of renewable energy, we aremodernizing automatic controls in dieselgenerating stations and plan to add energystorage systems in six off-grid systems.Transition initiatives forthe other off-grid systemsare expected to belaunched in the comingyears. Approximately 13% ofelectricity will soon begenerated by a wind farm.In addition, the Îles will beconnected to the maingrid in 2025 via 225 km ofunderwater cables. This willreduce GHG emissions arisingfrom electricity generationby 94%.Overview of Hydro‑Québec’s Energy ResourcesÎLES-DE-LA- MADELEINEDiscussions areunderway with thecommunity concerningthe integration of abiomass generatingstation.Two off-grid systems(Schefferville and LacRobertson) are alreadysupplied by hydroelectricgenerating stations.The connection of thesecommunities to the main gridin 2021 will provide them withover 99% clean, renewableenergy.Hydro-QuébecA run-of-river generatingstation will be built andcommissioned at theend of 2022. This willreduce GHG emissionsby 700,000 tons over a40‑year period.VILLAGE OFLA ROMAINE ANDTHE COMMUNITY OFUNAMEN SHIPU17
2019G745Fwww.hydroquebec.com
Overview of Hydro‑Québec’s Available Energy* * Source: Hydro‑Québec, Sustainability Report 2018 Hydro‑Québec requires substantial means to meet its commitments to its Québec customers and sell electricity on export markets to benefit the entire population. To achieve this, Hydro‑Québec operates a
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