Why isn’t Hydro-Québec developing the wind industry? Wouldn’t it be more profitable to nationalize the operation of wind farms?
As you noted, in Quebec, wind energy is operated by private producers who sell the electricity they produce to Hydro-Québec Distribution through power purchase agreements awarded primarily through calls for tender. This has been the preferred model since the very beginnings of the Quebec wind industry under the Bernard Landry government in the early 2000s.
There are many benefits to this model. By working with private companies both within the province and abroad, Quebec can leverage their wind energy project development and operation expertise, which has often been tested internationally. The competition created by calls for tender means that this model also puts pressure on prices. In addition, Hydro-Québec and electricity consumers in Quebec do not have to take on any risk—Hydro-Québec only pays for the electrons it receives, no more, no less.
This model has allowed nearly $2 billion to be invested into Quebec’s economy between the early days of the industry and 2015. It is also worth noting that on May 10, 2013, the premier of Quebec announced that Hydro-Québec Production was given the responsibility of developing and operating 200 megawatts (MW) of wind energy. This first project developed and operated by the public corporation should be up and running in 2018.
The WindFacts Team
(Question originally answered March 2014)