Churchill Falls Hydroelectric Generating Station | Collaborate, against the flow

The agreement between Quebec and Newfoundland and Labrador regarding Churchill Falls and Gull Island will mark a before and an after.

The word “historic” is not an exaggeration. And this agreement should also inspire other neighboring provinces and states. Because it shows the way forward: collaborating, finally, for real, in order to decarbonize the economy.

America’s Northeast needs to play as a team to grow its power grid for the benefit of consumers and ecosystems.

François Legault already has this vision. He still has to convince his neighbors to think like him in the long term.

When dwelling on the past, we always find grounds for resentment.

As has been said, Newfoundland and Labrador never digested the agreement signed in 1969, which allowed Quebec to buy electricity from the Churchill Falls power station at the absurd price of 0.2¢/kWh .

This bitterness, however, came at a high cost.

To bypass Quebec, the province has persisted in the ruinous Muskrat Falls power station. The federal government has sunk billions with inequitable aid for the other provinces.

Quebec has also often suffered unfair treatment.

In 1927, London ceded part of Labrador to Newfoundland in a unilateral decision. Even if Quebec deplores it, it has lost all legal hope of invalidating it. And there is the Meech Lake agreement, partly sabotaged by Newfoundland in 1990. The memory of Churchill Falls must not have helped.

But there are limits to mixing grievances in different files.

In the negotiation with St. John’s, Mr. Legault put these grievances aside. He did not try to crush his counterpart. Nor did he aim for electoral gain. He thought about the future.

His counterpart Andrew Furey had a more partisan and triumphant tone during the announcement. In addition to theatrically tearing up the old agreement, he insisted on the fact that the Labrador route would never be the subject of the slightest discussion. This shows the challenge for bold reconciliation solutions, such as creating a huge protected area there – the idea comes from the environmental group SNAP. Obviously, it would be easier for Quebec to accept than for St. John’s…

For more than a decade, Professor Pierre-Olivier Pineau has maintained that the electricity network in the northeast of the continent is not sufficiently integrated. “If we go from Quebec to the United States, the price of electricity can quadruple depending on the state. I don’t know of any other good for which we accept that the price varies so much,” marvels the holder of the Chair of Energy Sector Management at HEC Montréal.

He pleaded this in 2010. With the energy transition, he believes in it even more^⁠1.

States are increasingly turning to renewable energies such as wind and solar. However, they depend on the weather.

Quebec is banking on hydroelectricity. It is a stable and storable source of energy. An ideal complement to solar and wind power. But for that, we need to find a way to exchange electricity.

Under the Couillard government, Hydro-Québec advanced negotiations with New York and Massachusetts to export its surpluses. Mr. Legault made it happen. The project is, however, controversial, because Quebec now lacks energy.

This does not change the importance of further integrating the regional network, maintains Mr. Pineau. After all, electricity can flow in both directions.

In theory, this makes common sense. But in defense of elected officials, it is politically difficult. Building transmission lines is a tough sell – no one wants a tower in their backyard. There are also numerous lobbies. In New England, the fossil fuel sector financed protests against Hydro-Québec.

The agreement on Churchill Falls is atypical. A power station already existed, and geography almost forced the two provinces to come to an agreement. These conditions are rare.

However, generally speaking, the more time progresses, the more the collaboration will pay off. New York would like to build 9,000 MW of offshore wind projects by 2035. If it sells, there will be surpluses. And otherwise, the State will need a backup source.

Nuclear power can also play this role. It accounts for half of Ontario’s production.

The fact remains that the integration of networks is an idea that appeals especially on paper.

In 2011, the provinces developed a draft Canadian energy strategy. Little has changed since then. During their annual meeting, the prime ministers and governors of the provinces and states of the North-East reiterated their desire to work in this direction. But we are left with our wishes, deplores Mr. Pineau.

This would be particularly in the interest of the smaller provinces. In 2009, New Brunswick wanted to sell its NB Power company to Hydro-Québec. The transaction, unpopular with our neighbor, ultimately aborted. In 2020, the usefulness of a rapprochement had not disappeared. The province used the services of Hydro-Québec to import electricity and renovate its main power station.

This is the kind of initiative that could be replicated with a vision that goes beyond short-term political calculation.

With his tariff threats, Donald Trump shows the risk of codependence between neighbors. But the agreement negotiated between Quebec and Newfoundland and Labrador serves as an important counterexample. Between the two models, the choice is easy.

1. Read a study by Aïssatou Ba, Justin Caron and Pierre-Olivier Pineau on the integration of regional electricity networks (in English)