Quebec’s efforts in the energy sector are guided by its
energy policy. The current policy covers 2006 to
2015. Quebec is putting its final touches on the next
reiteration to be released fall 2013. A consultative process will
Quebec’s electricity sector represents more than 5% of its
GDP and is anchored by Hydro-Québec, a large vertically
integrated stated-owned utility. During the 1980s and 1990s HQI was
active on the world stage, first as a complement to the
international activities of Quebec’s engineering sector, and
then as a full-fledged developer, owner and operator of production
and transmission facilities, primarily in emerging markets.
In the late 1990s and early 2000s Quebec, bowing to ratepayer
pressure concerned about HQI’s impact on domestic electricity
prices, ordered Hydro-Québec to concentrate its activities
in Quebec. As a result HQI (profitably) sold its overseas
investments and curtailed its foreign activities, with the
exception of course of those activities directly linked to U.S.
There are four reasons why Hydro-Québec should resurrect
HQI, both as a technical adviser and an investor and operator:
Brand: Hydro-Québec has a very good
brand at home and abroad. By world standards it is well run and
large. It is profitable and a recognized leader in a number of
areas, including transmission and hydro-electricity (98% of
HQ’s production is from hydro). Also, the fact that it is
state-owned is an important plus in many markets. Local authorities
often prefer to deal with a public-sector entity rather than one
from the private sector.
Talent: Quebec, in large part thanks to
Hydro-Québec, has the requisite technical, managerial,
financial and legal skills and experience to design, finance,
build, operate and maintain electricity assets abroad.
Opportunity: The population ofCanada and other
first world economies is rapidly aging and growing more slowly. The
demographic and economic growth over the next 25 years will be
substantially higher in middle income and emerging markets. HQI is
a way for Quebec to participate and benefit from such growth. For
example, there are 1.2 billion people on earth who do not have
access to electricity, and middle income and emerging markets are
expected to add 2 billion people by 2050.
Exports: Quebec is expected to continue to
have substantial electricity surpluses well into the next decade.
As a result the need for new builds in Quebec will dramatically
shrink in the medium term. Projects abroad may be part of the
solution to maintain HQ’s supply chain.
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Canada is a constitutional monarchy, a parliamentary democracy and a federation comprised of ten provinces and three territories. Canada's judiciary is independent of the legislative and executive branches of Government.
The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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