Canada: Quebec's Energy Policy: Ambitious Energy Goals For 2030

After extensive public consultations, the Government of Quebec announced Quebec's energy policy for 2016–2030 (Policy) on April 7, 2016. By focusing on energy efficiency, innovation and renewable energy, the Policy aims to transition towards a low-carbon economy that will help fight climate change. Environmental organizations, businesses and First Nations thus far seem to be in favour of the Policy.

The provincial government has set the following targets for 2030:

  • Improve energy efficiency by 15 per cent
  • Reduce the consumption of petroleum products by 40 per cent
  • Eliminate thermal coal usage
  • Increase renewable energy production by 25 per cent
  • Increase bioenergy production by 50 per cent

NEW AGENCY RESPONSIBLE FOR ENERGY TRANSITION

The Policy announced the creation of an agency to coordinate energy-saving efforts and energy transition efforts following a single window approach. Under the responsibility of the Ministre de l'Énergie et des Ressources naturelles, this agency will supervise and deliver services related to innovation, energy efficiency and substitution. Among other things, the agency will have authority to provide businesses with low interest rates financing services and loan guarantees.

APPROVAL OF ENERGY PROJECTS

The provincial government will streamline the process for the evaluation of energy projects to increase coherence. Provincial decision-makers that have to rule on the environmental, social and economic implications of a project, such as the Régie de l'énergie, the Bureau d'audiences publiques sur l'environnement and Quebec's Commission de protection du territoire agricole, will have to closely coordinate their respective processes.

RENEWABLE ENERGY OFFER

While no new electricity production projects were announced, Hydro-Québec is now responsible for the implementation of production projects to meet Quebec's power demand. However, the Policy contemplates supporting Quebec's wind power industry in order to increase the export of renewable energy to various North American markets.

SMALL HYDROELECTRIC POWER STATIONS

In order to promote the economic development of local and First Nations communities, the provincial government will support community partnerships to develop small hydroelectric power station projects.

BIOMASS AND BIO-METHANIZATION

True to its goal of reducing the use of fossil energy, the provincial government is encouraging the production of biofuels such as ethanol and biomass fuels like diesel, renewable natural gas and wood pellets. The Policy aims to support the development of the forest biomass supply chain for production companies and the implementation of production centres for wood fibre bioenergy.

The government considers these alternative sources of electricity production (including biomethane) as innovative solutions able to supply energy to communities and industrial sites that are not connected to the Hydro-Québec grid.

NATURAL GAS

The provincial government intends to use natural gas as a source of energy during the transition towards a low-carbon economy and as a tool for economic development in order to increase the competitiveness of Quebec companies. The government therefore expects to continue the expansion of the gas network, develop a supply network for liquefied natural gas and increase the production of renewable natural gas.

FOSSIL ENERGIES

Furthermore, the provincial government will introduce a legal framework for the development of hydrocarbons in Quebec. If a project is approved, companies will be required to pay royalties, which will be used to finance renewable energy and energy efficiency measures. In this context, the government plans to study the following issues:

  1. Safe transport of hydrocarbons
  2. Responsible usage of hydrocarbons in Quebec
  3. Social acceptability of projects within host communities
  4. Enforcement of the highest technical and environmental standards

HYDRO-QUÉBEC'S STRATEGIC PLAN

The provincial government confirmed the role of Hydro-Québec as a major player in the province's economic development and gives it the authority to review new opportunities for international growth.

The Policy also specifies that Hydro-Québec has the authority to conduct strategic planning regarding its contribution to the Plan Nord project and to the electrification of transportation, as well as the preparation of a report on the development of wind power energy in Quebec and Hydro-Québec's activities in terms of energy efficiency.

PLAN NORD

The Policy provides that the transition will have to ensure competitive energy supplies for the mining development in northern Quebec. The supply of liquefied natural gas to this region is identified as one way of achieving this, as is the development of off-grid projects to replace fossil fuels with renewable energy sources for electricity production; these objectives are, however, dependent on the implementation of an improved transmission system.

The government also announced that the Capital Mines Hydrocarbon fund (CMH) will be transferred into the Capital Mines Energy fund (CME). The CMH, which has a budget of C$1-billion, was established in 2015 for the Government of Quebec to acquire equity interests in mining and hydrocarbon projects in Quebec to stimulate the growth of these sectors north of the 49th parallel and support the revamped Plan Nord. In collaboration with Investissement Québec and the new agency responsible for the energy transition, the CME will back green energy projects that will contribute to Quebec's energy transition.

NEXT STAGES

The Policy will be implemented in various stages. The provincial government initially plans to adopt a number of legislative changes. Thereafter, the government will adopt three consecutive five-year action plans.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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