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Canadian Energy Perspectives

Quebec Releases Energy Policy’s 2017-2020 Action Plan

Posted in Energy – Renewable, Alternative and Clean, Hydro-Québec, Québec
Mathieu LeBlancMartin Thiboutot

On June 26, 2017, Québec’s Energy and Natural Resources Minister, Mr. Pierre Arcand, unveiled the 2017-2020 Action Plan (the “Plan”), a first step towards implementing the 2030 Energy Policy (the “Policy”). The Policy, made public in April 2016 by the Québec Government, sets forth ambitious targets aimed at reducing both Quebec’s consumption of fossil fuels and its dependency on foreign energy, thereby achieving “energetic transition”.

A year later, the Action Plan sets out 42 measures (in French only), backed by $1.5 billion public investments, providing for concrete actions which are divided in four axes: (1) integrating the energetic transition’s governance; (2) fostering energetic transition towards a low-carbon-footprint economy; (3) offering consumers a diversified and renewed energy supply; and (4) defining a new approach with respect to fossil fuels. The implementation can be followed directly on the Action Plan website (in French only). Two of the measures are already in place, while 17 are underway. While much remains to be put into place, the Plan as presented should appeal to the energy industry by creating investment opportunities in Québec, without neglecting environmental targets.

The Plan puts great emphasis on Hydro-Québec’s (“HQ”) role as Quebec’s leading electricity producer. Under the Plan, HQ is instructed to develop, as a pilot project, a solar energy park as soon as 2017. Furthermore, an additional 1,140 MW of hydro power will be obtained by updating the older power plants. HQ’s “Rate L” will also be revised to encourage more private investment from large industries. To increase HQ’s profits, new long-term export agreements are expected to be signed, while the legal framework for privately exporting wind power will be revised. A new regulation in that respect should be published in the spring of 2018.

Moreover, several industry sectors will be impacted by the Plan. Trucking companies will receive grants if they reduce the fuel consumption of their fleet, while transportation and mining companies will be eligible for funding to convert vehicles to electricity, natural gas or propane. By 2020, gasoline sold in Québec will have to comprise at least 5% of biofuel (2% for diesel), while the natural gas which is distributed will have to include 5% of “renewable” gas. The Plan will support the achievement of the latter by investing in biogas (biomethanization) plants. Also on the investment side, Investissement Québec’s “Capital Mines Énergie” fund (formerly “Capital Mines Hydrocarbures”) will continue to support green energy projects.

Finally, further to the adoption of the Petroleum Resources Act in December 2016, the Plan announces that both the regulatory framework and the related government orientations are to be released before the end of 2017, allowing for the inception of an oil & gas industry in Québec.