July 11, 2014

Increased electricity exports could help provincial bottom lines in both Quebec and Ontario

Toronto/Montreal, Friday July 11th – Increased electricity exports by Quebec could save Ontario $12 billion over 20 years while providing Quebec with $12 billion in additional revenue from hydro export sales over the same period, says a new report from Equiterre and the Ontario Clean Air Alliance (OCAA).
 
“By importing lower-cost water and wind power from Quebec instead of embarking on the costly re-building of the Darlington Nuclear Station, Ontario can save hundreds of millions of dollars a year on electricity costs and avoid the need to guarantee massive new borrowing by Ontario Power Generation (OPG),” says Jack Gibbons, Chair of the OCAA.
 
“A long term contract between Quebec and Ontario would allow Quebec to get a better price for its electricity given the low prices of energy on American markets, and immediately boost the profitability of its export sales,” says Steven Guilbeault, Senior Director of Equiterre.
 
The report, Exporting Electricity: To Promote Greater Collaboration Between Québec and Ontario, notes that by using existing transmission lines between the two provinces, Quebec is currently capable of exporting power equivalent to 97% of the annual output of the Darlington Nuclear Station. 
 
An equitable sharing of the benefits of increased electricity trade could be achieved by an export price of 5.7 cents per kWh, which would be almost double the rate that Hydro Quebec is currently receiving for the bulk of its electricity exports.  For Ontario this price would be 30% less than OPG’s estimated cost of power from a re-built Darlington station (8.3 cents per kWh).
 
“According to Quebec’s Public Consultation on Energy Issues, whose results have been made public at the end of 2013, Quebec is selling most of its power at an average of around 3 cents a kWh under short term contracts to U.S. customers,” points out Guilbeault.  “Without expensive – and controversial – new transmission lines to U.S. markets, this is not going to change anytime soon.  Meanwhile, it is close to completing work on the large new Romaine hydroelectric project.”
 
“For Quebec, exporting to Ontario means a chance to earn higher revenue — through higher prices and increased export volumes — that can be used to reduce the provincial debt or support investments in schools and hospitals.  For Ontario, the savings compared to the cost of the Darlington re-build can similarly free up funds for higher priority investments like transit while avoiding adding to the province’s credit rating woes by preventing the creation of another mountain of nuclear debt,” explains Gibbons.
 
“Our systems are in many ways ideal for closer integration,” Guilbeault notes. “Quebec power demand peaks in winter and Ontario demand peaks in summer.  Ontario wind power peaks in winter, when Quebec can store power by keeping water in reservoirs for release in summer when Ontario needs power to feed air conditioners. It’s a very good fit. “
 
For more information:
Steven Guilbeault, Equiterre 514-522-2000

Jack Gibbons, Ontario Clean Air Alliance 416-260-2080 ext. 2