Quebec grants 307 megawatts to Hy2gen, unheard of since Northvolt

The German company Hy2gen has obtained a 307 megawatt (MW) electricity block for its green hydrogen and ammonia project, - has learned from several sources. This is the second largest block granted by the Legault government since the Northvolt battery mega-factory project.

It’s very importantreacts Johanne Whitmore, principal researcher of the Chair of Energy Sector Management at HEC Montréal.

The decision dates from May and was taken by the former Minister of the Economy, Innovation and Energy, Pierre Fitzgibbon. We knew that Hy2gen was one of the lucky ones, but the company and the public did not know how many megawatts.

According to our sources, Hy2gen recently received an official letter from Hydro-Québec guaranteeing the supply of all the megawatts it had requested. All he needs is an official letter from the Quebec government, which should be shortly.

The office of Minister of the Economy, Innovation and Energy Christine Fréchette did not want to “confirm or deny” our information.

A block twice as big as TES Canada

Northvolt’s gigabyte battery factory project received an allocation of 354 megawatts (MW) last year, the equivalent of the consumption of all the residences in Longueuil.

Because of our green and inexpensive hydroelectricity (the cheapest in North America), industrial projects have scrambled to obtain access to our megawatts. The government has received requests totaling 24,000 MW, much more than Hydro-Québec is able to supply surplus to its current customers.

Quebec granted 956 MW to 11 projects last year. In May, around 400 MW was allocated to 11 other projects, three-quarters of which went to Hy2gen.

Since the adoption of a new law in February 2023, it is the Minister of Economy, Innovation and Energy who chooses projects of more than five megawatts which will be powered by Hydro- Quebec. Five megawatts corresponds to the electrical power required by the Bell Center in Montreal.

For comparison, in the previous 20 years, only one project of more than 50 megawatts saw the light of day in Quebec, the Malartic gold mine, in Abitibi-Témiscamingue. Hy2gen requires six times more power.

According to the most recent government statements, there should not be many megawatts left to distribute for industrial projects until Hydro-Québec adds capacity to its network, starting in 2027-2028.

No need for private self-production

Several observers expected that Hy2gen would be forced to self-produce electricity to meet part of its needs, like TES Canada, in Mauricie. But she won’t have to, since she got everything she wanted.

According to our sources, Hydro-Québec was not very enchanted by the idea of ​​reproducing the hybrid model of TES Canada, which is contested. Experts see it as a “breach” in Hydro-Québec’s monopoly.

The state company has not confirmed this information, but we know that it recently announced that it itself wanted to become the prime contractor for giga-sized wind projects.

Request for more transparency on the allocation of megawatts

What will be important is to demonstrate that it is the best use of the blocks that we grant to have the greatest impact in terms of reducing greenhouse gases.this Johanne Whitmore. The demonstration is not always clear.

At the beginning of the month, the Quebec Liberal Party wrote to the Auditor General to invite her to investigate the granting of energy blocks to companies, fearing “arbitrariness”.

The opposition deplores the fact that projects from foreign companies have obtained megawatts while companies already established in Quebec have been refused.

A Chinese company, Tiandingfeng Canada, for example, obtained megawatts for a project in Sorel-Tracy, while the company Les Forges de Sorel did not obtain the 16 MW it requested to decarbonize its processes.

In a parliamentary committee, in September, the CEO of Hydro-Québec Michael Sabia was critical of Pierre Fitzgibbon’s choices, believing that the former minister had “perhaps” reserved too many power blocks for foreign companies, and this, to the detriment of local businesses.

In his speech, Mr. Sabia also noted that the allocated megawatts did not respect the targets established by the state-owned company of 75% for decarbonization and 25% for economic growth.

Green hydrogen – be careful when using it

German company Hy2gen plans to produce clean fuel for ships to replace the use of oil. The port of Baie-Comeau could serve as a recharging station for these ships.

Green hydrogen is obtained by the electrolysis of water, which requires a large consumption of electricity.

It’s very energy-intensive, so we don’t have the luxury of using green hydrogen in any waymentions Johanne Whitmore.

According to the researcher, it is important to first decarbonize the use of gray hydrogen [fabriqué à partir d’énergies fossiles]which is used in the steelworks and chemical sectors.

We must also ensure that this green hydrogen will be used for sectors that are the most difficult to decarbonize, for example heavy maritime transport. On the other hand, it is not a priority to create new synthetic natural gas fuels to inject it into the Énergir network.

Furthermore, she recalls that the government is committed to ensuring that the production of green hydrogen is primarily intended for use on the Quebec market.