Hydro-Quebec on track to become co-owner of its first wind farms

A Hydro Quebec logo is seen on their head office building in Montreal, Thursday, Feb. 26, 2015. THE CANADIAN PRESS/Ryan Remiorz

Hydro-Québec is setting the table for co-ownership of its first wind farms. The Crown corporation announced that it has signed an agreement with Energir and Boralex to develop three projects in the Charlevoix region.

The partnership provides for equal participation of the three companies in a new wind power expansion on the territory of the Seigneurie de Beaupré, Hydro-Québec, Boralex and Energir jointly confirmed Tuesday morning.

Construction costs and profits will be shared equally.

The wind projects bearing the name Des Neiges are planned to be deployed in three distinct sectors in the RCMs of La Côte-de-Beaupré, Charlevoix and potentially La Jacques-Cartier. Each of the sectors would include approximately 60 to 80 wind turbines and a capacity of 400 megawatts (MW), for a total of approximately 1200 MW.

"Hydro-Québec would purchase the energy produced under three power purchase agreements in order to be integrated into the volume of energy available to supply its various markets," according to a press release.

Without specifying a figure, the purchase price of electricity by the Crown corporation will be "competitive" and "more advantageous" than the Apuiat project, Hydro-Québec spokesperson Caroline Des Rosiers told The Canadian Press.

The Apuiat park on the North Shore provides that electricity will be purchased at a cost of about 6 cents per kWh, according to the contract between a company comprising the Innu communities, Boralex and Hydro-Québec Production.

Details of the schedule and costs of the Des Neiges projects in Charlevoix are not disclosed, but the three companies are talking about investments of up to $3 billion.

It is specified that the decision to go ahead with each of the projects will be made by Hydro-Québec according to its evolving needs. The demand for electricity is strong and the projects are fairly advanced in terms of regulations, so construction could begin quickly in the next few years, according to the state-owned company.

For Hydro-Québec, this partnership is part of its Strategic Plan to build a portfolio of 3,000 MW of wind power capacity with partners by 2026. The tendering process will continue in parallel.

"With the energy transition and the expected growth in Quebec's electricity needs, it is imperative that we have the required flexibility in terms of supply. Wind power is one of the tools we have at our disposal," said Sophie Brochu, president and CEO of Hydro-Québec, in a press release.

Boralex and Energir developed and operate the first three wind power phases on the Seigneurie de Beaupré. The projects were commissioned between 2013 and 2015, with a total of 164 turbines and a capacity of 364 MW.

Various studies are underway for the Des Neiges wind projects. New information sessions are also planned, notably with Indigenous communities.

However, the agreement has been criticized by the Fédération québécoise des municipalités (FQM), which wants the region's communities to have a stake in the announced projects. Michel Lagacé, president of the FQM's permanent energy commission, points out that this was the case for the RCMs of the Bas-St-Laurent and Gaspésie in previous projects.

"I cannot conceive that the 1/8th in 3/8th government would deprive those of La Capitale-Nationale; it would be a double standard," said the prefect of the Rivière-du-Loup RCM, in a press release. "I can't understand that companies are still doing this in 2022, after the success of the existing community parks."

Hydro-Quebec, for its part, assures that it has been discussing 'for several months' with local and Aboriginal communities about participating in the project. We are currently in discussions about participating in the project with the Huron-Wendat Nation, the Innu communities on the territory, the RCM of La Côte-de-Beaupré, the RCM of Charlevoix, the RCM of La Jacques-Cartier and the municipalities concerned," Des Rosiers said.

GOOD NEWS FOR BORALEX

Tuesday's announcement confirms that the Crown corporation is ready to partner with "experienced" wind power producers like Boralex, said Sean Steuart of TD Securities. "While these projects are still in their infancy, this partnership provides another transparent source of growth."

In total, the analyst believes that Boralex's stake in the three projects would be less than one third due to the addition of possible partnerships with municipalities and Indigenous communities. He estimates that the Kingsey Falls-based company's share will reach 300 MW, or 25 per cent of the total of about 1,200 MW. "This would represent a 13 per cent increase in its net capacity," he said.

Around noon, Boralex shares were up $1, or 2.59 per cent, at $39.56 on the Toronto Stock Exchange.

-- This article was produced with the financial support of the Meta and Canadian Press News Fellowships.

--

-- This report by The Canadian Press was first published in French on April 19, 2022.