On May 10, 2013, the Government of Québec announced plans to procure 800 MW of wind energy capacity. This procurement will be in the form of:
- A 150 MW block reserved through a dedicated purchase program for the three Mi’gmaq First Nations of Québec who have partnered with Innergex;
- A 200 MW block allotted to Hydro-Québec Production, a division of Hydro-Québec, the province-owned power utility; and
- A 450 MW block to be awarded through a request for proposals (RFP) process, with 300 MW allocated to projects in the Gaspésie-Îles-de-la Madeleine and Lower St. Lawrence regions, and another 150 MW for projects throughout the province. These RFPs target projects developed by local communities and cooperatives in partnership with private developers.
Québec previously issued three wind energy RFPs totalling 3,500 MW of capacity. These include an RFP in 2009 for two 250 MW blocks: one reserved for community projects and the other for Aboriginal projects, both with private sector participation. As a condition of this RFP, projects were limited to 25 MW. The Aboriginal projects required majority control by the Aboriginal community or nation. Ultimately, only one of the Aboriginal projects (approximately 25 MW) was retained as a result of this RFP.
Specific details on the 800-MW procurement and the time frame for the RFPs have not yet been released. However, the announcement emphasizes that certain local and provincial content requirements will be imposed to maximize regional and provincial economic benefits. The terms and conditions of the RFPs remain to be determined by the Government of Québec and will have to be submitted to the provincial energy regulator, the Régie de l’énergie for approval.
In recent calls for wind energy, the “regional content” component required that at least 30% of turbine costs relate to expenses for the manufacture of the wind turbines in the Gaspésie and Matane regions of Québec. Québec’s most recent wind energy RFPs also required that 60% of overall costs be spent in the province, allowing for items such as: (i) development costs, including the cost of resource, site and environmental studies; (ii) the cost of the wind turbines; and (iii) total construction costs, including costs associated with transporting wind turbines to project sites, testing and commissioning.
This newly announced procurement has been well received by the wind industry as an affirmation of Québec’s commitment to the continued development of wind energy in the province beyond 2015. The wind industry had been awaiting this announcement in view of the 700 MW deficiency resulting from projects retained previously by Hydro-Québec, that did not proceed, and deficiencies resulting from the RFP for the 250 MW block of Aboriginal projects.
It is anticipated that this 800 MW procurement will provide $2 billion worth of regional and provincial economic benefits, including maintaining employment in the Gaspésie and Lower St. Lawrence regions. It will also support the manufacturing sector in the regions which includes nacelle assembly, as well as the production of nacelle components, power modules and converters, turbine blades and turbine towers.
Currently, Québec is Canada’s second largest producer of wind energy, with a total of more than 1,700 MW of installed wind energy capacity, representing 26% of all wind energy capacity in Canada.
The announcement emphasized that this 800 MW procurement is part of a broader, long-term vision for the energy industry in Québec, though its Energy Strategy for the period of 2016 to 2025. The details of this new Energy Strategy are expected to be unveiled in the near future.