On July 14, 2021, Order-in-Council 906-2021 respecting the economic, social and environmental concerns submitted to the Régie de l'énergie with respect to Hydro-Québec's 2020-2029 Electricity Supply Plan (the "Order-in-Council"), draft Regulation respecting a 300-megawatt block of wind energy ("Regulation 300") and draft Regulation respecting a 480-megawatt block of renewable energy ("Regulation 480", together with Regulation 300, the "Regulations") were published in the Gazette officielle du Québec by the government of Québec.
The Regulations are a first step towards the launch by Hydro-Québec of calls for tenders for new energy supplies to meet long-term energy and power needs as early as 2026. Hydro-Québec's 2020-2029 Electricity Supply Plan anticipates significant additional energy and power needs over the next few years. To this effect, the Government of Québec issued the Regulations which create an obligation for Hydro-Québec to issue two calls of tenders for (i) a 300-megawatt block of wind energy; and (ii) a 480-megawatt of renewable energy.
300-megawatt block of wind energy
The Order-in-Council, which only applies with respect to the 300-megawatt block under Regulation 300, sets forth objectives determined by the government of Québec to maximize the social and financial benefits in the local communities and in Québec. Accordingly, it is expected that projects submitted in the context of the call for tenders for the 300-megawatt block reserved for wind energy will need to respect the following requirements:
- a participation of the local environment in the project at a level of approximately 50%1;
- maximization of the Québec content, which shall account for 60% of the overall project expenses;
- maximization of the regional content, whereby 35% of the overall expenses shall be incurred in the RCM where the project will be located, in the RCM of Matanie or in the administrative region of Gaspésie-Îles-de-la-Madeleine; and
- long-term supply with thirty-year contracts.
A project submitted in the context of the call for tenders for the 300-megawatt block covered by Regulation 300 should also result in an annual payment of $5,700 per megawatt (indexed annually) for the local community administering the territory where the project is located.
Neither the Order-in-Council nor the Regulation 300 currently stipulate a maximum cost for the supply of electric power.
480-megawatt block of renewable energy
Regulation 480 provides that Hydro-Québec shall issue a call of tenders for a 480-megawatt block of renewable energy. As opposed to Regulation 300 which reserves the 300-megawatt block for wind energy only, Regulation 480 applies to all types of renewable energy. Projects tendering wind energy as well as solar, biomass or biogas or other forms of renewable energy will therefore be able to participate in the call for tenders under Regulation 480, subject to the final terms of the call for tenders.
As for Regulation 300, Regulation 480 does not currently stipulate a maximum cost for the supply of electric power.
Any interested person may submit comments on the Regulations to the Ministry of Energy and Natural Resources until August 28, 2021, at which time the Government of Québec may proceed with adopting the Regulations.
Tender for solicitations for the 300-megawatt block of wind energy and the 480-megawatt block of renewable energy must be issued by Hydro-Québec not later than December 31, 2021.
1. Local environment is defined in the Order-in-Council as an environment that consists of one or more of the following organizations: a regional county municipality, a local municipality, a band council, a Cree or Northern village municipality or the Naskapi village municipality or the Kativik Regional Government.
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