On April 7, 2016, the Government of Quebec released its much-anticipated Energy Policy 2030 before 500 guests at Montreal’s Place des Arts.
Since its election on April 7, 2014, Premier Philippe Couillard’s Liberal government has issued a steady stream of economic and industrial policies that would put dirigiste France to shame. In the last 18 months, it has issued policies, strategies, guides and papers on a broad range of subjects. To name only a few, these include the Maritime Strategy, the Quebec Aluminium Development Strategy 2015-2025, the Strategic Vision for Mining Development in Quebec, the 2013-2020 Action Plan on Climate Change, the Plan Nord toward 2035, 2015-2020 Action Plan, and the Green Paper on Social Acceptability.
But the Energy Policy is first among equals. It is Quebec’s keystone policy and, while it has been the subject of considerable debate within government, it is likely to be the foundation of Mr. Couillard’s political legacy. At the express request of the Premier, it was delayed and re-written to take into account the conclusions of COP 21, held in Paris from November 30 to December 12, 2015.
The Significance of Government Policies in Quebec
Why are such expressions of government thinking important, if not crucial, in Quebec? There are two reasons. The first and most obvious is that the documents serve to enlighten as to how government will legislate and regulate a sector. The second is that, in Quebec, the three levels of government (federal, provincial and municipal) account for nearly half of all investment and control nearly 50% of the provincial economy. The Quebec government is in effect the private sector’s joint venture partner and these documents are akin to joint venture business plans.
In neighboring Ontario and in the western provinces, the role of the state is more discreet, standing at most at 40% in Ontario and decreasing as one moves westward. Thus, the question of how government plans to spend its money (and which economic sectors it favours) has a greater impact in Quebec.
In addition, much of Quebec’s venture and expansion capital is governmental or quasi-governmental and such capital will perforce favour projects that conform to government policies and guidelines.
While it can be frustrating to wait for the issuance of a policy and to experience the administrative silence and sectorial stagnation that precedes it, one can take satisfaction in the fact that Quebec has a very positive track record when it comes to implementation. All one has to do is look at how Quebec, despite sometimes strident opposition, rolled out 4,000MW of wind power, as announced in its 2006-2015 Energy Policy.
What is in the Energy Policy 2030?
The new Energy Policy represents a departure from previous ones. It is at the same time far more complex and less detailed than former policies. Previous policies covered shorter periods and focused on additional electricity production and transmission.
The new policy has four primary objectives:
- To decarbonize Quebec;
- To reduce energy consumption and improve energy efficiency;
- To make full use of Quebec’s natural resources; and
- To innovate and develop its green economy.
Decarbonization
Quebec has set a very ambitious greenhouse gas (GHG) reduction goal. Quebec wants 2030 GHG levels to be 37.5% less than in 1990. To date Quebec has achieved a 8-9% reduction from 1990 levels. This was done with little sacrifice on the back of technology breakthroughs and energy choices made 50 years ago (e.g, 730kv transmission lines that allowed remote Big Hydro to be cost effective) and lower demographic and economic growth than in the rest of Canada during the last 25 years. Now comes the hard part. To meet its reduction objective, Quebec must – in half the time – reduce GHGs at a rate three times greater than in the last 25 years.
The Quebec Government wants renewable energy to meet 61% of Quebec’s needs by 2030 (it currently stands at a little more than 47%). Quebec wants to reduce fossil fuel usage, particularly in transportation. Measures will include the electrification of transportation (Quebec has half of Canada’s electric cars), the use of natural gas in trucking and the expansion and increased use of public transit (e.g., Montreal’s subway is the third busiest in North America after New York and Mexico City).
Reduction and Efficiency
The Quebec Government wants to eliminate the use of thermal coal and reduce by 40% the quantity of oil products used in the province. Quebec wants to improve by 15% the efficiency with which energy is used. To achieve this Quebec will assist households and industry to reduce energy consumption and expects to spend $4 billion doing so over the next 15 years. Among other things building codes will be modified and energy efficient renovations encouraged.
Natural Resources
The Quebec Government will encourage the use of Quebec-sourced energy, including hydro, wind, biomass and geothermal. Households may produce solar and wind electricity and obtain credits against their consumption. Future Hydro-Québec rate increases will be limited to inflation. Quebec wants 25% more renewable energy, including 50% more biomass energy. A new hydrocarbon law is planned and revenues generated from natural gas and oil production will be used to support further decarbonization. Finally, Quebec is willing to allow wind power projects to supply export markets. This is quite a departure from current practice.
Innovation
Quebec will establish research priorities and fund research and development, including in the electrification of transportation.
Conclusion
Energy Policy 2030 is more than an energy policy. It is also a climate change policy, a regional development policy and an industrial policy. Quebec hopes that “green energy” will boost innovation, entrepreneurship and foreign investment. In order for it to work, Quebec must ensure that it remains competitive whilst implementing its ambitious plan.