Natural Resources Committee on April 16th, 2026

[Serge Abergel]

The two transmission lines to the United States discussed here—the Champlain Hudson Power Express project and the New England Clean Energy Connect project—have not received financial support from the federal government.

Generally speaking, Hydro-Québec finances its own facilities through the issuance of bonds, among other means, and the revenue it generates. There are therefore no government investments.

I’ll go into a bit more detail. Both links involve converter stations. It’s important to note that we deliver energy via direct-current lines. Since Quebec’s transmission grid operates on alternating current, this requires a converter station. This is highly complex and very expensive equipment installed near the border. There is then a transmission line that crosses the border and runs down to another converter station, on the opposite side, in the United States.

Let’s take the example of the line that goes to New York. The Hertel converter station sits on Montreal's south shore. The line then runs along Highway 15, under Lake Champlain, and arrives, via the Hudson River, in Astoria, in New York City's Queens borough, where there is another converter station.

On the Quebec side, the bulk of the expenses are related to the converter station. We’re talking about expenditures in the range of over $1 billion for converter stations of this nature. If we factor in the transmission line that follows, we’re perhaps looking at $1.5 billion in investments.

What’s important to consider regarding these investments is that this equipment has a long lifespan. We’re perhaps looking at 80 years for this type of transmission line. These are therefore assets that will generate revenue and wealth for a very, very long time.

Beyond the contracts—and this is the most interesting point about these lines—it takes us into markets that are increasingly deploying intermittent resources. When I talk about intermittent resources, I’m referring mainly to wind power in the New York region, offshore wind power—yes, it’s slowed down, although construction is still happening and will continue once the administration changes—and solar power.

Obviously, these resources drive prices down significantly at certain times. There will even be surpluses, according to projections. By 2040, there will be surpluses of intermittent resources and near-zero prices in the markets. This will allow us to bring energy back to Quebec at a very low cost and to feed that energy back into those markets at times when demand is very high and intermittent energy isn’t available.

It’s a real asset for Quebec to have this access to markets and to be able not only to reduce emissions but also to generate revenue.

[Mario Simard, Bloc, Jonquière, QC]

So, it also helps manage peak periods.

I love your answer. It shows us that there are energy export models that don’t need federal government support and that are profitable over several years. I invite some gas industry developers to take notes, perhaps.

My friend Claude Guay briefly mentioned the availability of energy blocks, and you spoke about energy efficiency. I know that Hydro-Québec is making a lot of efforts in this regard.

Currently, people with low demand receive immediate approval from Hydro-Québec. I think that’s when it’s under five megawatts. If it’s above that, it’s a bit more complex. There are systems that allow people to be, let’s say, creative, which lets them get below five megawatts. They can thus manage to secure an energy block and perhaps redistribute it later into the grid.

I don’t know if Hydro-Québec funds this—that is, companies trying to implement energy coupling to reduce their consumption. Does Hydro-Québec have such a program?

[Serge Abergel]

In general, Hydro‑Québec encourages good energy consumption. This aligns with the implementation of the action plan. It ties in with the 22 terawatt‑hour target that I mentioned earlier.

Hydro‑Québec spends roughly $1 billion a year on various programs designed to improve energy efficiency in Quebec. These are the cheapest electrons available.

We could probably provide a number of examples. There are indeed a number of initiatives under way that provide broad support to residential clients and certain companies to help them optimize their consumption.

[Mario Simard, Bloc, Jonquière, QC]

We'll come back to this.

Thank you.

[The Chair, Liberal, Terry Duguid]

Thank you.

Colleagues, we're going on to our second round. We were to have the committee business portion of the meeting. My sense is that it won't be necessary today. We're going to be coming back with some suggestions for further studies. My suggestion is that we use that for witnesses so that we can complete a second round. Do we agree?

[Some hon. members]

Agreed.

[The Chair, Liberal, Terry Duguid]

I'll give the floor to Mr. Martel for five minutes.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Thank you, Mr. Chair.

Mr. Abergel, we can see that upgrading Rio Tinto's dams is costly, but necessary. That's also where you come in.

Will our local companies be asked to carry out this work? Can they meet Hydro‑Québec's needs?

[Serge Abergel]

The beauty of a hydroelectric facility is its long lifespan. When properly maintained, a hydroelectric plant can last a long time. At Hydro‑Québec, we operate facilities that have been in service for over 100 years and that continue to generate affordable energy for clients, since these facilities can pay for themselves.

Good maintenance is indeed necessary. In Quebec, we have an extremely well‑established ecosystem of companies that provide excellent services for all the maintenance and repair work that we carry out at our plants. This ecosystem is firmly in place.

Moreover, this ecosystem has helped us to increase our initial figure of 2,000 megawatts to 2,400 megawatts in the course of upgrading our power plants. This ecosystem has made that possible. This industry in Quebec has been able to further optimize its equipment. We just increased the number of megawatts from our current facilities. We owe it to this industry and its firmly established presence.

This industry, with its wealth of experience, also means that we can look forward to a steady stream of power plant upgrade projects over the next 15 to 20 years, one after the other, with a high level of predictability. That's an asset for us.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Can you name some of these companies?

[Serge Abergel]

We have Voith Hydro, for example. General Electric, one of many examples, also has a strong presence. There are a number of companies in Quebec.

The subcontractors that help us with work on our power plants include Kiewit, which has a strong presence in Quebec. We have Hitachi. We also have SNC‑Lavalin, which has now become AtkinsRéalis. I apologize for saying a word that shouldn't be said here. I heard myself say it, and I had a strong feeling that I shouldn't say it.

In short, we have a firmly established ecosystem in Quebec. This makes Hydro‑Québec even stronger.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

Let's talk about wind turbines. First, why was wind power chosen as the main source of electricity generation to increase your capacity?

[Serge Abergel]

On that note, I should point out that the action plan includes a wide variety of resources. Wind power is indeed abundant, but so is hydroelectricity.

It's worth noting that wind power projects are generally deployed much more quickly than hydroelectric projects. It isn't the same type of energy. The products are quite different. That's the key point. Wind power has a load factor, or capacity factor, of 35% to 40%. It isn't flexible. It isn't available on demand. It's available when the wind blows. Obviously, this creates certain variations. When we combine wind power with Quebec's hydroelectricity and our reservoirs, it makes for a great asset. It makes for a highly effective energy mix.

When we talk about wind power, we're adding it to diversify the energy sources and to quickly deploy what we have.

When we talk about hydroelectricity, we have a long‑term vision. It takes us a considerable amount of time to build infrastructure, but the infrastructure has a long lifespan.

When we talk about hydroelectricity with reservoirs, the product is flexible, available on demand and highly complementary to the other sources that I just described, but that provide this security and reliability. The deployment timelines are completely different.

However, the benefit, as I said, lies in the fact that the 62 hydroelectric plants account for 37,000 megawatts. Some of them are over 100 years old. I can tell you that they'll still be around in 100 years as a result of our maintenance work.

[Richard Martel, Conservative, Chicoutimi—Le Fjord, QC]

I would like to know how much of your wind turbines are currently purchased locally. I know that you also import. I've already discussed this, but could you elaborate on this topic, Mr. Laureti?

[David Laureti]

Hydro‑Québec is proud to encourage domestic consumption. It matters a great deal to us. Mr. Abergel spoke about the whole ecosystem built up over the years around the maintenance of our hydroelectric plants.

Wind farms are a more recent development in Quebec's history. However, Hydro‑Québec is keenly aware of them. A number of groups have been formed over the past 20 or 25 years. The Quebec government, for example, wanted to promote the construction of wind turbines. It also wanted to support certain regions. Think of the Gaspésie region, which at one point rallied behind the construction of wind turbines.

We're now, of course, talking about the construction of large‑scale wind farms, meaning 10,000 megawatts—

[The Chair, Liberal, Terry Duguid]

Thank you.

The time is up.

Mr. Clark, you have five minutes.

[Braedon Clark, Liberal, Sackville—Bedford—Preston, NS]

Thank you very much, Mr. Chair.

Mr. Billedeau, I want to ask you a couple of questions. I too am in rainy, beautiful Halifax, so I want to get your take on hydrogen in general. I really appreciate your being here.

Hydrogen is one subject that over the course of this study, we haven't been able to talk about as much as we should or need to. As you know, it's a hot topic in Nova Scotia, with products in various states of play. EverWind is in the news the most.

For the benefit of the committee, could you give us your take on where you see hydrogen having the most value and utility for Canada, going forward, from an export perspective?

[David Billedeau]

You're correct. There is a lot of ongoing activity in Atlantic Canada's hydrogen sector. Much of that activity is export-focused. In fact, the vast majority of investment in hydrogen infrastructure on the east coast is focused on exporting green hydrogen and green ammonia to Europe, particularly to Germany. That is largely driven, as I mentioned in my opening remarks, by the H2Global double-blind, contracts-for-difference auctioning program.

For the committee's reference, that program brings together buyers in Germany with producers of hydrogen and green ammonia in Canada. Both sides, in a blind format, set their price to sell and their price to buy. Then a contract for difference enters into play to offset cost deltas there. That is the main driver to really kick-start the export dynamic between Canada and Europe, when it comes to hydrogen and its derivatives. We're seeing continued investments in this space.

You mentioned organizations like EverWind being the flag-bearers for green hydrogen production. That is 100% accurate. I think one of the challenges the sector is facing is twofold.

When we've discussed hydrogen in public policy discourse, it's always been seen, in Canada and internationally, on a 10-year time horizon for projects to really take shape and for export markets to develop. One of the challenges is that we're seeing export markets develop much more rapidly than we thought. Germany is really pushing forward with executing that H2Global auction on an accelerated timeline. I wouldn't be surprised if, by the close of 2026, the first auction for Canadian-produced hydrogen to Germany takes place. That is moving forward quite quickly.

As I also mentioned, other markets, like Asia-Pacific, Japan particularly, are putting ships in the water to fill up with liquid hydrogen. Even on the west coast of the country, there are material opportunities to expand our energy exports through production and export of hydrogen.

Obviously, in both markets I mentioned—Asia-Pacific and Europe—they are not only looking for affordable and reliable producers of hydrogen, but also looking for low-carbon producers of hydrogen. That's one of the other challenges, or opportunities perhaps, Canada is facing. Right now, the majority of our 3.5 million to 4.5 million tonnes produced annually is grey hydrogen. It's more carbon-intensive and unabated. What we're seeing on the east coast is really the turning of the page of that chapter into Canada being a low-carbon hydrogen producer with exports in mind.

[Braedon Clark, Liberal, Sackville—Bedford—Preston, NS]

Excellent. Thank you very much, Mr. Billedeau.

I know this is a study about energy exports, but I'll also mention that green hydrogen can also be a real game-changer in terms of emissions from what have been difficult to green sectors like cement or steel or other things. That's a shameless plug there, I know.

I also wanted to ask a question of my friends from Hydro-Québec before I run out of time. I'm a bit of a broken record on this, but being an MP from Nova Scotia, I know the wind west project is a big deal for us and something that we're really interested in. I know that our two provinces have been in discussions on that.

Perhaps Mr. Abergel, you could give us your thoughts on wind west and how you can see that perhaps complementing what you do at Hydro-Québec?

[Serge Abergel]

I want to thank the member for his question.

Wind West is one of the various initiatives under consideration from a post‑2035 perspective. I spoke about the 2035 action plan. However, we're also looking at other options available post‑2035. Offshore wind power is indeed one avenue that we want to explore in order to gain a better understanding of this energy source. To this end, we recently launched a request for information to obtain as many details as possible on the topic.

To answer the question, we believe that this energy source provides an excellent complement to our hydroelectric resources, which we can store in our reservoirs. Offshore wind power has a high load factor of over 50% or even 60%. Of course, it's intermittent. That said, wind power and hydroelectricity complement each other perfectly. We're interested in this.

[The Chair, Liberal, Terry Duguid]

Thank you.

Mr. Simard, you have the floor for two and a half minutes.

[Mario Simard, Bloc, Jonquière, QC]

Thank you, Mr. Chair.

Perhaps I'll clarify what we talked about earlier.

I understand that some federal programs could benefit Hydro‑Québec. For example, we talked about the clean electricity tax credit. I clearly understand that Hydro‑Québec has no desire to have federal standards regulate its work. As a member of the Bloc Québécois, I don't believe that we should go down that road—far from it. However, the federal government may have a role to play in the near future. We want to study the clean electricity issue together.

Back home in the Saguenay—Lac‑Saint‑Jean region, I heard that companies were having trouble accessing energy blocks for their projects. Some people say that they can sometimes reduce demand by also using storage technologies.

Would you welcome federal participation to help companies develop in‑house storage capacity in order to reduce their demand for energy blocks?

That's why I asked you earlier whether Hydro‑Québec provided financial support to companies trying to take this step.

[Serge Abergel]

First, I just want to say that the Quebec government regulates the process for allocating blocks of electricity. We must provide the service for any demand of less than five megawatts. When the demand exceeds five megawatts, the government carries out an assessment to look at the economic benefits and other factors before making a decision.

I'll give the floor to Mr. Laureti, who can provide further details.

[David Laureti]

I want to thank the member for his question.

Mr. Abergel spoke earlier about the support that we provide and the need to develop energy efficiency because it's the cheapest form of energy.

Hydro‑Québec has completely dedicated teams. The action plan objectives in this area are also highly ambitious. The dedicated teams work with the companies to help them reduce their consumption. They also help us reduce consumption during peak energy periods, which remain challenging. This places tremendous pressure on the grid.

I don't know which company you're talking about. However, companies generally have business representatives at Hydro‑Québec who talk to them. We know that we can't always simply turn off the switch, which can affect an industrial process. So our business representatives have discussions with these companies. When a period of extreme cold is forecast, for example, we'll sometimes ask them two or three days in advance whether they can reduce their consumption at that time.

We know that some companies now specialize in managing these peak periods and that they help other companies. I think that it's a virtuous circle. I don't know whether the company in question is already working with us. We could check and get back to you later.

[The Chair, Liberal, Terry Duguid]

Thank you.

Mr. Martel, you have the floor for five minutes.