Merci. Thank you very much.
Thank you, Mr. Chairman, for inviting Hydro Québec to share with you and the members of your committee our position as well as comments on Bill C-30.
I will be speaking in French. You have been provided with my notes, and I will be commenting on each of the slides that you have before you.
Of course, when the question period comes, I'll be more than happy to take questions in French or English.
Hydro-Quebec is an electricity generation, transmission and distribution company. Its sole shareholder is the Government of Quebec.
In 2005 Hydro-Quebec did nearly 11 billion dollars' worth of business. It produces 35,315 megawatts, and 95% of the production is renewable energy. It is because of this renewable energy that Quebec has the best greenhouse gas emission record per capita in Canada.
Hydro-Quebec's net exports to neighbouring markets amounted to 6.7 TWh in 2005, for revenues of nearly $830 million. Hydro-Quebec can take advantage of 18 interconnections with markets in Ontario, New England, New Brunswick and Newfoundland and Labrador. A new interconnection with Ontario, with a capacity of 1,250 MW, is currently under construction here, just outside the National Capital.
Hydro-Quebec's exports to neighbouring markets in Canada and the United States helps reduce greenhouse gas emissions at the continental level and also helps reduce air pollution.
The energy strategy adopted by the Government of Quebec in 2006 emphasizes development of renewable energy. The strategy focuses on and gives priority to the ramping up of hydroelectric development, the development of wind energy, increased energy efficiency and more energy innovation.
As a result, Hydro-Quebec has adopted three main areas of focus.
The complementary development of hydroelectricity and wind power. Hydro-Quebec is moving ahead with a number of projects that together will account for approximately 4,000 MW of additional power. Wind energy will provide Hydro-Quebec with installed capacity of 3,500 MW following two calls for tenders involving 1,000 and 2,000 MW. The 1,000 MW call for tenders was the largest one ever issued in North America.
Energy efficiency measures have also been taken to a new level. Hydro-Quebec has adopted an Energy Efficiency Plan, which is expected to produce 4.7 TWh in annual energy savings by 2010 and 8 TWh by 2015.
We are also undertaking technological innovation to make our company even more efficient. In order to deal with the problem of climate change, it is essential to focus on land transportation. Hydro-Quebec has played an active role in this area with Cleanova II, a fully electric vehicle with an engine developed by our subsidiary TM4.
In the electricity sector, an effective federal strategy to fight greenhouse gas emissions should be based on four major principles: first, consider hydroelectric potential to be part of the solution; second, ensure fair treatment for hydroelectricity; third, apply the principle of polluter-pays, or emitter-pays, if you like, fairly; and fourth, promote—and I mean by that recognize—the contribution of all types of renewable energy projects.
Those principles will maximize the contribution of renewable energy as part of an effective policy to deal with greenhouse gas emissions and pollutants in Canada.
The environmental approval process is much shorter in Canada for coal-fired power projects than for hydroelectric projects. In fact, thermal power plants often do not even require federal authorization. A hydroelectric project takes an average of 8 to 12 years of preparation and preliminary steps before it is up and running, whereas a thermal plant of the same capacity can be operational in less than five years.
The regulatory process must be quick and effective. I would point out that the federal government has made a special effort over the past few years to speed up the project approval process. That has a direct impact on the ability of producers to respond to changing energy needs.
The recent approval of our Eastmain-I-A-Sarcelle-Rupert project at the federal level will enable us to begin providing megawatts of clean energy to Ontario as scheduled, that is, by the end of the decade. Ontario will thus be able to reduce its dependence on fossil fuels. That is an example of a concrete positive effect of developing renewable energy.
In our opinion, the main thing that Canada can do is to create an effective emissions trading market. How can we ensure that it is effective? To begin with, like my colleagues, I would say that we need to set out clear, straightforward rules—we will come back to this further on; ensure that the laws of supply and demand can operate by not having an artificial minimum or maximum; indicate clearly that emitters must assume the cost of their emissions and that non-emitters must receive clear recognition; enable companies to make good long-term investment decisions and adapt to regulatory constraints as profitably as possible.
I have just said that the rules need to be clear and straightforward. We would like to suggest a few such rules that are already being discussed in the industry and are very realistic.
All electricity projects that have become operational since 2000 should comply with a national standard based on emissions of a combined cycle gas turbine, a standard that takes into account Canada's energy budget. To go beyond that would create too heavy a burden on a number of large emitters. Under that scenario, a new plant emitting less than a combined cycle gas turbine would receive extra credits and permits up to 350 t/GWh, and would have to pay for its extra emissions, for example, by buying permits and credits on the market.
More specifically, in the context of the bill that is before you, the timetable for targets and emission caps should not create any uncertainty. As I have said, the rules regarding long-term constraints need to be specific. Maximum emissions should decline incrementally in accordance with the timetable set out in advance. The timetable might include, for example, adequate notice for companies to be able to make the necessary investments. This is particularly important in the electricity generation sector. Investment decisions are made a long way ahead and cover long, even very long, periods.
I would also like to say a word about certain ideas circulating to the effect that standards and rules might be set for various generation streams. That is not a good idea and would only result in promoting higher emissions, which goes against the objective. Comparing coal with coal, or wind with wind, would not move Canada ahead in any way.
In closing, although we recognize that there is no magic solution, Hydro-Quebec would like to emphasize once again how important the issue of climate change is. Canada must control and reduce its emissions. The clearer the rules are and the sooner they are set, the better our performance will be. All companies planning major investments are waiting. Moreover, if Canada wants to achieve the dual objective of reducing its emissions and remaining internationally competitive, it must develop its renewable energy resources.
Thank you for your attention.