Can Quebec find a happy medium?22 June 2012
To date, Quebec’s hydroelectric production has mostly been associated with large scale projects like the James Bay and Manicouagan dams. At the other extreme, the Quebec government has left the operation of small installations (50MW or less) to the private sector. However, an important portion of Quebec’s hydroelectric potential remains unexploited: that of medium scale projects. F. Pierre Gingras from the Montreal Economic Institute in Canada explains how the development of such schemes could be entrusted to local communities.
The potential of Quebec’s medium scale hydro projects, with 50-125MW of installed capacity, is a far cry from the Manic-5 generating station’s 1596MW. None the less, there are some 50 potential sites that would add 3-5000MW to Quebec’s hydroelectric production and give rise to several billions of dollars of private investment. However, due to certain considerations, the development of these promising multifunctional sites is constantly being postponed.
One of the biggest electric utilities in North America, Hydro-Québec concentrated on mastering the development of large projects as they are more economical per kilowatt-hour of power produced. Thanks to these projects the government corporation continued to build upon its expertise and reputation within the hydropower industry.
Even though medium scale projects can be all the more profitable for a community, given that it leads to important real estate and tourist and recreational development, they failed to receive the same kind of attention. Hydro-Québec’s mission is focused on the production, transportation and distribution of electricity and since these other potential medium-scale benefits do not fall under this remit, they have not been considered in economic impact analyses.
However, it should be noted that Hydro-Québec’s own size does not make it the ideal instrument for running medium scale projects. Such projects cannot support the weight of the study and approval process applied to large projects. Neither do they require the same management method, the same business culture or the same technical requirements justified by larger projects of strategic importance to the network. Carrying out technical studies, consultations and managing hydroelectric power plant projects does requires in-depth knowledge, but it is important to note that Hydro-Québec is not the only organisation with this expertise. Several engineering firms in Quebec offer these kinds of skills and experience here and elsewhere on the international market.
From an economic point of view, medium scale hydroelectric production could be used to meet domestic needs, could be exported, or could serve as an extra source of power while reservoirs are being filled. It would also generate direct local activity thanks to the creation of new jobs, especially during construction.
The slightly higher unit cost of these developments, from C$0.10 to C$0.12 per kWh, could be competitive in Ontario’s market, among others, where much higher purchasing prices were still recently guaranteed, namely C$0.135 per kWh for wind energy, C$0.195 for biogas and even C$0.802 for solar energy.
Medium scale hydro production can offer more than just power benefits. It can also accommodate the development of tourist and recreational activities. Creating artificial lakes may displace existing ecosystems along riverbanks, but it also creates a new environment ideal for aquatic life and can include the development of spawning grounds and fish ladders toward tributaries. The forced oxygenation of the water through the turbines as well as the regulation and management of water levels to avoid destructive flooding also contribute to the vitality of these ecosystems. Thus, with simple measures, it is possible to attenuate the environmental impacts of hydroelectric projects and to allow the regions concerned to benefit from a large new body of water, and therefore also from beaches, camping grounds, nature trails, major tourist infrastructure and so forth.
Quebec is endowed with some 4500 rivers, over 8000 lakes with surface areas of at least 3km2, and a far greater number of smaller lakes. The Gouin, Baskatong, Kipawa and Taureau reservoirs are among the most frequented and most famous Quebec sites for leisure, fishing and outdoor activities - all three of which resulted directly from hydroelectric projects. Entire sub-regions survive on these reservoirs. Their existence contributed to the establishment of numerous outfitters and opened vast regions to hundreds of thousands of people, especially due to the quality of fishing to be found in reservoirs.
Access to calm bodies of water, rare and highly valued in the secondary homes market, also creates immense real estate potential on the banks of reservoirs. This could contribute to the profitability of hydroelectric projects that are well situated near urban centres in southern Quebec.
Here again, concrete examples allow us to evaluate the extent to which this is a major instrument for social and economic development. In the Laurentians, for example, one of the most important tourist regions in Quebec, a major portion of development took place around nine small reservoirs created at the beginning of the 20th century on the Rivière du Nord. Lake Masson (Sainte-Marguerite-Estérel), Lake Manitou and Lac des Sables (Sainte-Agathe-des-Monts) as well as Lake Théodore (Saint-Adolphe) are good examples. These reservoirs were part of the successful recipes for communities where a significant share of jobs was provided directly or indirectly by tourism.
Provincial law already recognises that it is up to regional county municipalities (RCM) and native communities to develop regional land use plans in order to evaluate the entire set of economic and environmental impacts of proposed projects. It is these communities that should therefore decide to develop their own hydroelectric potential for projects up to 125MW by incorporating this development into their land use plans. It should also be up to them to choose their partners through calls for proposals.
By entrusting control of the development of these medium scale hydroelectric projects to RCMs and communities, they could finally take into account all facets of projects, such flood control, environmental, tourist and recreational, and real estate aspects. Politically, it would surely be more appropriate and efficient for these projects to be promoted and defended regionally by representatives in the field and in the name of the populations most affected.
Hydro-Québec’s main role would thus be to establish a contract for the purchase of the energy produced and maybe to become a nominal partner in the projects. Hydro-Québec could even then have the right to buy the property titles of the best projects according to a cost-plus formula. Moreover, these projects would offer excellent, relatively low-risk and profitable investment opportunities for our financial institutions.
Hydroelectric development has played an essential role in the modernisation of Quebec for a century. A favourable political climate is all that is needed now for this neglected potential to enrich and improve those communities that want to harness it.
F Pierre Gingras is a specialist in industrial engineering and an associate researcher at the Montreal Economic Institute. He worked for 31 years in the construction of hydroelectric projects for Hydro-Québec.
Such medium scale projects could be developed in various regions, like these few examples located in southern Quebec (see their exact locations on the map).